Derivs - FX

Deutsche Bank has executed the first series of renminbi option trades for Mengniu Dairy, as well as other Chinese corporates based onshore, under new regulation from China’s State Administration of Foreign Exchange, which became effective today.

Undertakings for Collective Investment in Transferrable Securities, or UCITS, funds should consider the manner and degree of margin segregation of derivatives at a clearinghouse rather than the type of derivative cleared when calculating counterparty risk, according to lawyers.

CME Group will acquire Trayport and FENICS from GFI Group through a two-step equity transaction aimed at creating value for their stockholders as well as qualifying for tax-free exchanges of stock for both firms.

Market participants have continued to trade options on the euro against the US dollar, as the currency pair continues to move lower.

The Depository Trust and Clearing Corporation, together with six banks, has created a secure database of client data and documentation called Clarient Entity Hub. The aim is for the hub to allow banks and their clients to access standard data and documentation whenever they need it to comply with regulatory requirements, whether that be for clearing under the European Markets Infrastructure Regulation or Dodd Frank.

The average daily volume total for over-the-counter fx instruments in the US was down by 0.6% in April versus October 2013, however, volumes in the UK were up 7% for the same period.

When Scott O’Malia, commissioner at the Commodity Futures Trading Commission in Washington DC, takes up his new role as chief executive officer of the International Swaps and Derivatives Association, derivative trade data will be top of the agenda. Though swap data reporting has been running for two years in the US, there is still no automated way to crunch the data — a problem on both sides of the regulatory fence which O'Malia has been trying to solve for years at the CFTC.

Investors have been trading puts and risk-reversals on the euro against the dollar on recent days following the recent spot decline in the currency pair.

Long-dated vanilla options structures on the euro against the dollar that play a bullish $ view, are expected to gain traction as front-end yield differentials have moved in the $’s favour, with strategists expecting such a trend to widen further over the next 18 months.

The European Commission must renew its efforts to recognise US clearinghouses as equivalent under European Markets Infrastructure Regulation before the December 15 Capital Requirements Directive deadline, or risk fragmenting the market. That’s the view of Scott O’Malia, commissioner at the Commodity Futures Trading Commission, who used a keynote address to law associations in New York to call for greater harmonisation of cross-border rules surrounding CCPs.

Traiana’s CreditLink service has added kill switch capability for single dealer platforms in FX trading, allowing risks associated with algorithmic and high frequency to be managed in real-time.

Pension schemes established in the third countries must comply with clearing obligations set out in European Markets Infrastructure Regulation, according to an update from the European Securities and Markets Authority.