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US regulation may mean investment managers that are operated and managed out of the US will have to constrict their trading to US counterparties, therefore introducing barriers to trading opportunities and hampering competition.

Calculating initial margin for uncleared over-the-counter derivatives is posing significant challenges for the industry and market participants need to look at adopting a standardised model to ensure consistency when calculating margin.

Swap documentation such as the International Swaps and Derivatives Association master agreements and credit support annexes — the contracts at the heart of so much wrangling between issuers and dealers in the supranational and agency bond market in recent years — are likely to be non-existent in the coming years for firms that only trade vanilla products. This is due to regulation that requires certain financial instruments to be cleared through central counterparty (CCP) clearing houses, writes Beth Shah.

The need for credit support annexes may be reduced due to regulation that requires some financial instruments to be cleared through clearinghouses and traded on swap execution facilities, according to market officials.

Investors have been buying short-dated options on the euro and US dollar against the Canadian dollar, as the Canadian unit has continued to strengthen over recent days following the announcement that Burger King will buy Canadian fast food chain Tim Hortons.

The US Commodity Futures Trading Commission has issued an order filing and settling charges against broker-dealer Merrill Lynch for allegedly failing to diligently supervise its officers', employees', and agents' processing of futures exchange and clearing fees charged to its customers. The Commission’s order requires the firm pays a $1.2mn civil monetary penalty.

Investors have increasingly been buying options on the euro against both the dollar and sterling, as market participants expect further volatility to occur in the single currency following comments from European Central Bank president Mario Draghi at last week’s annual symposium in Jackson Hole.

Some market participants have been unwinding long options positions on the dollar against the yen in a bid to take profit as the Japanese unit has steadily weakened against the greenback. At the end of last month, $/¥ was trading at 101.36. On Monday, spot on the pair was 104.28.

Investors have been selling puts on the euro against the dollar in a bid to take profit on any downside options they still hold, following a further decline in spot on the currency pair after somewhat hawkish Federal Open Market Committee meeting minutes were released on Wednesday.

Investors have been trading vanilla options on the euro against the dollar this week, following the recent spot decline in the currency pair.

First Trust has listed a new exchange-traded fund on the NASDAQ OMX which began trading last Thursday. The ETF, known as First Trust Strategic Income ETF, is the firm’s first multi-asset income fund that is actively managed, and provides a low-cost alternative to traditional fixed-income funds through diversification and the use of multiple asset classes.

BM&FBOVESPA, Brazil’s sole bourse, has unified its four clearinghouses for different asset classes into one single platform, which began live operations Monday for exchange-traded and over-the-counter derivatives. The firm will now look to launch equities in 2015.