UBS has expanded its regional equity finance division by hiring Joseph Cavatoni to head a new position in equities collateral trading. Cavatoni will be responsible for facilitating hedge fund clients' shorts via swaps, securities lending and other tools. He reports to Richard Johnston, the Hong Kong-based head of the division, which covers Asia, Australia and Japan.

Cavatoni arrives from Merrill Lynch, where he had run its regional prime brokering business out of Tokyo since 2000, spearheading its regional presence out of Australia. The entire prime broking team remains based in Japan. Until now, Cavatoni's finance career has been with Merrill, starting out in 1994 in the United States. He was based in Hong Kong from 1995-2000.

He resigned from Merrill this spring, and began working at UBS last week. UBS has a team of over 20 people in equity finance, located in Japan, Hong Kong and Australia.

UBS is one of several firms, including Merrill, Deutsche Bank and CSFB, which have shot out of the gates in their race for Asia-Pacific prime broking business. Global capital flows to Asia as well as the rapid rise of a regional hedge fund industry are fuelling their challenges to Goldman Sachs and Morgan Stanley, the region's giants.