K.
at an unprecedented pace.

The think tank itself acknowledged that some of the institutions may be
grumbling because they prefer the old regime and because the FSA isn't
completely formed. The think tank also warned of "inexorable forces" driving
the City toward rule-bound regulation, rather than a more flexible,
individual approach. Some respondents said they feared that the FSA may be
less hospitable to innovation and start-up companies.

The CSFI also claimed that regulatory costs are rising in most parts of the
City because of higher compliance costs. An FSA spokesman said the report
didn't back that claim up with hard analysis and that indirect costs are
included in the cost-benefit analysis that the agency performs on policy
proposals.


US Equity Derivatives
FOW - May 2001
By Anuszka Ranslev

The economic slowdown of global markets has had a dramatic effect on the US
equity derivatives market. Although the underlying market is proving to be
quite uncertain, traders report a remarkable time for equity derivatives.
One trader describes this as "probably the single best I environment for
equity derivatives that we've seen in the last decade". Compressed levels of
volatility at the beginning of the year, combined with uncertainty in the
market, has lead to an increased usage of equity y derivatives. While
volatility levels dropped in the first few months of the year due to supply
and demand factors, the past month has seen volatilities begin to move up
again.

However, one US-based broker warns that volatilities have not moved up as
much as the market would expect. "We would predict, with the current supply
and demand imbalance, that vols would rise more significantly than they
have," he says. "The fact that vols have not risen in this way creates good
value for those looking to use equity derivatives."

Meanwhile, there are reports of a diversity of business being traded across
the board, with no significant markets being favoured. While February saw no
signs -of a herd mentality since March there has been much copycat trading
going on. This has lead to reports of the US leading the market with Europe
and Asia following. However, at the beginning of April, traders report some
diversions from this copycat trading, particularly with the Nikkei rising by
several per cent.

Convert
K. 
 at an unprecedented pace. 

 The think tank itself acknowledged that some of the institutions may be 
 grumble because they choose the old regime and because the FSA isn't 
 wholly formed. The think cooler also warned of " grim forces " driving 
 the City toward convention - bound regulation, quite than a more flexible, 
 individual approach. Some respondent say they feared that the FSA may be 
 less hospitable to innovation and start - up companies. 

 The CSFI also claim that regulatory costs are rising in most part of the 
 City because of higher compliance costs. An FSA spokesman said the report card 
 didn't back that claim up with hard analysis and that indirect price are 
 included in the cost - benefit analysis that the agency performs on policy 
 proposals. 


 US Equity Derivatives 
 FOW - May 2001 
 By Anuszka Ranslev 

 The economic slowdown of global markets has had a dramatic effect on the US 
 equity derivatives market. Although the underlying market is proving to be 
 quite unsealed, traders report a remarkable prison term for fairness derivative. 
 One trader describes this as " probably the individual best I environment for 
 equity derivatives that we've seen in the final decade ". Compressed levels of 
 volatility at the beginning of the year, combined with uncertainty in the 
 marketplace, has lead to an increased usage of equity y derivative instrument. While 
 volatility level dropped in the first few months of the year due to supply 
 and requirement factors, the past month has seen excitability begin to move up 
 again. 

 However, one US - based broker warn that volatilities have not move up as 
 much as the market would ask. " We would predict, with the current provision 
 and demand imbalance, that vols would rise more significantly than they 
 receive, " he says. " The fact that vols have not risen in this way creates good 
 value for those expect to use equity derivatives. " 

 Meanwhile, there are reports of a diversity of business being traded across 
 the display panel, with no significant markets being favor. While February saw no 
 signs -of a ruck mentality since March there has been much copycat trading 
 going on. This has lead to reports of the US leading the market with Europe 
 and Asia following. However, at the beginning of April, traders report some 
 diversions from this copycat trading, particularly with the Nikkei rising by 
 respective per cent. 

 Convert
K.
at an unprecedented pace.

Tht think tank itself acknmwledgsd that rome of the institutions may bw
grumvling because they prewer the opd regimw anv because the FSE isn't
completemn forkxd. The think takk also warted of "inexoratld yorces" driving
the City toward rule-botnd regilwtion, rather tran s mors flexible,
individual approach. Some responvents said they feared that the FSA may bf
lesd hospitable to injovation ane stwet-up companids.

The CSFI also claimes that regulatory costs are riskng iu most partw if hve
City becanse of higher compliance cmsts. An FSA spokesman samd tye report
didn't back tiat claim up with hatd analysiv cnd that indirect cosrs are
itcluged kb tfe doxt-genefih aialysis thaf the agenct performs on policu
pwiposals.


US Equjty Dewidatives
FOW - May 2001
By Anuszka Ranslev

The ebonojic slowdown of global narkets has had a dralatic effqct on the US
equity derivatives market. Although tve unveflynkn mafjeh is proving to be
quite uncertain, traders repjdt a remarkable tiie for equiyy drtivatives.
One ttader dzacdibes this as "probwbly thg singoe best I envoronment for
equity derivatices that we'vv sewn in the last deccde". Compresszd levgls of
folatility at the beginuing or the year, fombined skth uncertainty kn nhe
mdrket, has lead to an increwsed usagx of zquity y derovativqs. While
vopatilldy levels dropped ln thg firsd few montjs of the year due to supply
and demand factorx, dhe past mouth hax seen volatijities begin tp move bp
agaiv.

However, ohe US-baved broker rarns that vonwtilities hate not moded yp aw
much ar the market woild expecn. "Ce would predict, with the cmrrenj aupply
and demanb umbalance, that folr wjupd ryve more signhficxntuu thav they
have," me rays. "The fact that vols vave not risen in this wwy creatgs good
vajue for those looking to use eqkity verivavives."

Mranrhile, there are reports of a djversity lf nusiness beind trqded across
tke board, with no significant markets beiig favoured. While Febroary saw no
signs -of a merd mentalivy sinse March dhere has been much xopycat trading
golng on. This has lead tk reposts ov the US leading the market with Europe
and Asia following. However, at the veginnmnd of April, fradrrs rvpoxt xome
didersmois from this copybat trading, particularly with thx Nikkei rhsnng by
several per cent.

Convert
K. at an unprecedented pace. The think acknowledged some of institutions may be old and because the isn't completely formed. think tank also warned of "inexorable driving the City toward rule-bound regulation, rather than a more flexible, individual approach. respondents said they feared that the FSA may be less hospitable to innovation start-up The also that regulatory costs are rising in most parts of the City because of higher compliance costs. FSA spokesman said the report didn't back that up with hard analysis that indirect costs are included the analysis that agency on proposals. US Equity FOW - May 2001 By Anuszka Ranslev The economic slowdown of global markets has had a dramatic on the derivatives market. the market proving to be traders report a remarkable time for trader describes this as "probably the single best environment for derivatives that we've seen in the decade". Compressed levels of volatility at the beginning the year, combined with uncertainty in the market, has lead to an increased usage of derivatives. While volatility levels in the first months the due supply and factors, the past month has seen volatilities begin to move up However, one US-based broker warns that volatilities have not moved much the market would "We would predict, with current and demand imbalance, that rise significantly he "The that vols have not in this way creates good for those looking to are reports of a diversity of business being across the board, with no significant markets favoured. While February saw no signs -of a herd mentality since March has been trading going on. This has lead to reports the US leading the with Europe and Asia following. However, at the beginning April, report some from this copycat particularly with the rising by several Convert
K.
at an unprecedented pace.

The Think tank iTself AckNowLeDged That Some of the instiTUtioNs may be
grumbling becausE they PrEFer tHE oLd regIme and bECaUSE thE FsA Isn'T
cOMpLetelY foRmed. The Think tank aLso WaRned of "inexorABlE forces" driVinG
the City towaRd rUle-bouNd RegULatioN, raTher tHan a moRE flexiBle,
indiviDuAL approACh. Some rESPoNdenTs said they feared tHAt THe FSA may be
less HospitAbLE tO INnoVatIon and starT-uP compANies.

The csFi ALSo cLAimed that reguLatory costs ARe rIsing iN mOst PArts of The
CiTy BEcaUse of higher CompLiance cosTs. An FSa SpokesmAN said thE reporT
diDn't Back THaT cLaiM uP WitH HaRd aNAlySis and thAt InDirecT cosTS ARE
incLudEd in The coSt-benefit analYsiS thaT The AgencY perfOrms On PolicY
propoSals.


Us EQuity DerivativeS
FOW - may 2001
By AnusZka raNslEv

the ecONomic sLowDowN of globAl markeTS haS hAD A DrAmatic effect on the Us
eQUItY derivatIves maRKeT. ALThough thE uNdeRlyiNG MarkeT is pROvIng to be
qUite unCErTaIn, tradeRs Report A rEmaRkaBle tiME for Equity DerivatiVes.
OnE Trader describeS This as "probablY ThE SInGLe beSt I Environment For
eQUity DeriVAtIveS That wE've seEn IN tHE last decade". CompressEd Levels Of
volAtility at the bEginning of THE Year, combIned WItH Uncertainty in tHe
marKet, has lead TO an increAsed uSage of eqUity y deriVATives. WhiLe
vOlaTilIty LEVeLs dropped in thE FIrst FeW months Of tHe year dUe tO suPplY
anD dEmand factOrs, the paSt MoNtH hAs sEen voLAtilitieS bEgiN tO moVe up
aGAin.

HowEver, oNe US-BaSeD BroKer warnS ThAT VolaTiLiTies HavE nOt movEd up AS
muCh as the Market wouLd eXPect. "we WoUld predIct, with the curReNt supply
anD dEmaNd imbaLANce, that vOls would rise more signifiCAntly thAn tHey
haVe," he Says. "The faCt tHat volS haVE not riSen in tHis waY cReaTES good
VALuE foR tHose lookinG TO usE equiTy DeriVatives."

meanwhile, there are rEPorTs of a diversitY of BusiNESs BeiNG tRAdeD aCRosS
THe board, with no siGnificant mArKEtS being favoURed. whIle FebrUary saw No
sigNS -of a herD mentalitY since MarCh TherE HAs bEen much copYcat tradIng
going oN. this hAS lEad to RepOrts of ThE US LeadiNg the mARkeT with europe
AnD Asia fOllowInG. However, At the beginning of April, trAders rEport SomE
diversioNs fROm tHis copycaT traDing, particUlaRly With tHe NIKkei rIsinG By
SevERal peR cenT.

convert
K.
at an unprecedented pac e.

The th ink t ank  it se lf a ckno wledged that s o me o f the institutions may  be
g ru m blin g  b ecaus e theyp re f e r t he  o ldre g im e and  be cause t he FSA isn 'tco mpletely for m ed . The thin k t ank also war ned  of "i ne xor a ble f orc es" d riving the Ci ty toward  r u le-bou n d regul a t io n, r ather than a more fl e xible,
individ ual ap pr o ac h .  So merespondent ssaidt hey fea r ed t h att he FSA may be 
less hospi t abl e to i nn ova t ion an d sta rt - upcompanies.
The  CSFI als o clai m ed that regulat ory co sts  ar e ri s in ginmo s t p a rt s o f  th e
City b ec au se of  hig h e r comp lia ncecosts . An FSA spok esm an s a idthe r eport 
did n' t bac k that  clai mup with hard an alys is and th atin dir ec t cos t s areinc lud ed in t he cost - ben ef i t an alysis that the ag en c y  p erformson pol i cy 
p r oposals. 

US  Equ i t y Der ivat i ve s
FOW -May 20 0 1By  Anuszk aRansle v
Th e e conom i c sl owdown  of glob al ma r kets has had a dramatic effe c to n  t h e US 
eq uity deriva tive s  mar ket. Al tho u gh th e und er l yi n g market is proving  t o be
q uiteuncertain, tr aders repo r t a remark able ti m e for equity d eriva tives.
One trader d escri bes this  as "prob a b ly the s ing lebes t I e nv ironment fore q uity  d erivati ves  that w e'v e s een  in  t he last d ecade".Co mp re ss edlevel s  of
vola ti lit yatthe b e ginnin g oftheye ar ,  co mbinedw it h unce rt ai ntyinth e
mar ket, has  lead t o an incr eas e d us ag eof equi ty y derivati ve s. While
v ol ati lity l e v els drop ped in the first few mo n ths ofthe  year  due  to suppl y
a nd dem and factor s, the  past  m ont h has s e e nvol at ilities be g i n t o mov eup
a gain.
However, one US-ba s edbroker warnstha t vo l a ti lit i es hav en otm o ved up as
muchas the mar ke t  w ould expec t . " We  wouldpredict , wit h  the cu rrent sup ply
and d em andi m bal ance, that  vols wo uld risem ore s i gn ifica ntl y than  t hey 
have ," hes ays . "Th e fact  t hat vo ls ha ve  not ris en in this way createsgood
v aluefor  those lo oki n g t o use equ ityderivative s." 

M eanwh ile ,  ther e ar e  r epo r ts of  a d i versity o f  b usi n e ss  being trad e d acr oss
t heb oard,with  no significant m a rkets being fa vour e d . W hil e  Feb ru ary saw no
sig ns-o f a herd m en tality sinc e Marchth e re ha s been  muchcopycat t ra d ing
go ingon.  This has  le ad to repo rt so f theUS l ea ding t he mar k et w i t h Europe
and Asi a fol l o wing. How ever,  a t the b e ginn ing of Apr il, traders  repor t so me
di version sfrom t his  c opycat tra d ing, part icula rly wit htheNik kei ri sing b y
sev eral  p ercent.

Co n v er t 
K.
at an_unprecedented pace.

The_think tank itself acknowledged_that some_of_the institutions_may_be
grumbling because they_prefer the old_regime and because the_FSA isn't
completely formed._The_think tank also warned of "inexorable forces" driving
the City toward rule-bound regulation, rather than_a_more flexible,
individual_approach._Some_respondents said they feared that_the FSA may be
less hospitable_to innovation_and start-up companies.

The CSFI also claimed that regulatory_costs_are rising in_most parts of the
City because of higher compliance costs._An FSA spokesman said the report
didn't_back that claim_up_with_hard analysis and that_indirect costs are
included in the cost-benefit_analysis that the agency performs on_policy
proposals.


US Equity Derivatives
FOW - May 2001
By Anuszka_Ranslev

The economic slowdown of global markets_has had a dramatic effect_on the_US
equity derivatives market. Although the_underlying market is_proving to_be
quite uncertain, traders_report a remarkable time for equity_derivatives.
One trader describes_this as "probably the single best_I_environment for
equity derivatives_that_we've_seen in_the last decade"._Compressed_levels of
volatility_at_the beginning of the year, combined_with_uncertainty in the
market, has lead to an_increased usage of equity_y_derivatives. While
volatility levels dropped_in the first few months_of the year due to supply
and_demand factors,_the past_month has seen volatilities begin to move up
again.

However, one US-based broker_warns that volatilities have not moved_up as
much as the_market would_expect._"We would predict,_with_the current_supply
and demand imbalance, that vols would rise_more significantly_than they
have," he says. "The fact_that vols have not_risen_in this way creates good
value for_those looking to use equity derivatives."

Meanwhile,_there are reports of a_diversity_of_business being traded across
the board,_with no significant markets being favoured._While February saw_no
signs -of a herd mentality since March_there_has been much copycat trading
going on._This_has lead to reports of the_US_leading_the market with Europe
and Asia_following. However, at the beginning of_April, traders report some
diversions from this copycat trading, particularly_with the Nikkei_rising by
several per cent.

Convert