Swiss bank’s deputy CEO resigns

A Swiss bank said Friday one of its top executives has resigned amid a German tax-fraud investigation that is recently expanded across national borders.

Bank J. Safra Sarasin AG said deputy chief executive Eric Sarasin has resigned, in a bid to ensure that accusations raised as part of the investigation “do not tarnish the image and reputation of the bank.” Officials are looking into Sarasin’s and the bank’s role in providing investments that allegedly enabled clients to fraudulently earn tax rebates.

The investments at the heart of the ongoing German probe involve what are known as “cum/ex” stock trades, which can be used to claim tax credits based on transactions timed around dividend payouts.

Citigroup hires from Morgan Stanley for oil and gas role

Citigroup is adding a managing director to its European oil and gas team, despite the regional fee pool in the sector being down 20% on a year earlier.

Shreyas Bordia, previously an executive director at Morgan Stanley, is in the process of joining Citi, according to people familiar with the matter. The oil and gas team at Citi is run by Stephen Trauber, head of global energy investment banking at the bank in Houston. Citi and Morgan Stanley declined to comment.

Bordia’s move comes as the oil and gas mergers and acquisitions market, long known for its mega deals, is surviving on pockets of activity.

Inflexible views on flexible pay

In just 36 hours last week, a crack widened into a chasm between two key regulators on the issue of bankers’ pay. Closing that gap is going to take a very long time.

The public brawl between the European Banking Authority and the Bank of England’s Prudential Regulation Authority has happened because of a fundamental difference of philosophy, which, in turn, stems from a different definition of what problem needs solving.

The issue is, of course, allowances – the mechanism that banks have used to circumvent – yes, let’s be honest about it – the new European cap on bonuses. The European Banking Authority ruled last week that the vast majority of the payouts, which were supposed to sit somewhere between variable and fixed pay, should be considered as the former rather than the latter and were, therefore, not in line with Capital Requirements Directive, the document that contains the bonus rules.

Dark pools boost trade sizes to rise above EU caps

The operators of European dark pools are stepping up efforts to encourage larger institutional orders because forthcoming European Union caps on dark pool volumes will not apply to large trades.

Turquoise, the equity market majority-owned by the London Stock Exchange, on Monday started a new service to facilitate block trades. It is designed for institutional investors and allows Turquoise members to issue a “block indication”, announcing interest in buying a large order of a given stock. If a matching block indication is found, the two parties are asked to complete the trade.

James Baugh, head of sales at Turquoise, said seven companies had committed to using the service at launch, including JP Morgan, Instinet, Barclays and Societe Generale.

Cross-border wrangles spark talks on new EC body

Calls are growing among market practitioners for a single body within regulators such as the European Commission, focused solely on solving ongoing issues related to the cross-border impact of securities regulation.

The effect of new regulation to the $600 trillion over-the-counter derivatives markets, in particular rules that mandate the clearing of standardised swaps, are those causing most disruption to firms that operate across different jurisdictions.

A lack of agreement, or mutual recognition, between the European Commission and the US Commodity Futures Trading Commission on their post-crisis regulatory regimes has threatened to subject firms with transatlantic businesses to overlapping and contradictory regulations.

Hedge funds target fall in UK house prices

Hedge funds are building short positions against the UK residential property sector, targeting firms such as Zoopla, Rightmove, Barratts and Foxtons, as signs of a slowdown in the property market begin to build.

Their move come as a number of surveys have suggested that property prices, particularly in the crucial London market, are starting to cool.

Tom Walker, co-head of global property securities at UK fund manager Schroders, said: “It is clear that volumes are decreasing, and prices have fallen, albeit a percent of two. What [the hedge funds] are calculating is that the trend continues and it isn’t just a one off or a seasonal slowdown.”

Analyst duo ditch Espirito Santo for HSBC

Two Panmure Gordon analysts who were due to join Espirito Santo's Investment Bank last month have made a last-minute move to HSBC, according to four people familiar with the matter.

Graham Jones and Damian McNeela were hired by Espirito Santo's Investment Bank in July, as part of a bid to strengthen Espirito's coverage of the European consumer sector. They were due to start the new roles last month.
However, they have now agreed to join HSBC instead, according to four people familiar with the matter. Jones is already a former HSBC alumni, having been the bank's head of European food produce before he joined Panmure Gordon in 2004.