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Articles tagged by FIA

Wood Swaps Deutsche Bank for FIA Greg Wood has joined the Futures Industry Association (FIA) as senior vice president of global industry operations and technology. Wood will be tasked with leading the strategic direction of the FIA by developing and maintaining key strategic relationships with various constituencies in the industry; identifying and managing member and industry operational, execution and market structure issues; and guiding the development of FIA’s operational and technical solutions. “On behalf of the FIA board and staff, I am thrilled to welcome Greg to this role,” says FIA president and CEO, Walt Lukken.
Industry Bodies Continue Opposition to Source Code Access Following the CFTC meeting that approved the Commission’s proposed supplement to its draft rules on automated trading, the Futures Industry Association (FIA) and the FIA Principal Traders Group – which represents proprietary trading firms – expressed their “grave concerns” over the change which would grant CFTC access to proprietary source code. The change “would permit an unacceptable level of access to proprietary source code used to operate automated trading systems”, the two bodies say in a statement, adding they will submit formal feedback during the supplement’s public comment period.
Sexton New Head of NFA Thomas Sexton has been named as the National Futures Association’s new president and CEO, succeeding Dan Roth, who is retiring. The appointment is effective March 1 2017 and was unanimously endorsed by NFA’s board after what the association says was an “exhaustive” search process. Sexton is an existing member of NFA, which is a self-regulatory organisation for the US derivatives industry, having joined the association in 1991 as an attorney and subsequently being promoted to assistant general counsel in 1998, and to general counsel and secretary in 2001.
FIA Calls for Wholesale Review of Financial Regulation The head of the Futures Industry Association (FIA), Walt Lukken, has issued an open letter to the US President, Donald Trump, requesting an immediate review of all financial reform regulation. “Now is the appropriate time to review and simplify the regulatory framework developed following the financial crisis and determine whether these regulations are in fact meeting their public objectives,” says Lukken in the letter. Although he says that some areas of Dodd-Frank may warrant repeal, he argues that others – such as Title VII, which created the framework for the regulation and clearing of the swaps market – have led to significant improvements and may only require reform.
Industry Bodies Criticise Reg AT Rules (Again) The Futures Industry Association and the FIA Principal Traders Group have yet again submitted comments to the Commodity Futures Trading Commission’s opposing what they describe as the overly prescriptive regulation of automated trading proposed by the Commission. The comments were delivered in response to the supplemental notice of proposed rulemaking regarding Regulation AT. This is the third comment letter that the two industry bodies have submitted about this proposed regulation. FIA and FIA PTG also provided a detailed response to the Commission’s 2013 concept release on risk controls and system safeguards for automated trading environments.
FIA Data Highlights Stagnant FX Futures Volumes New data from the Futures Industry Association (FIA) highlights the lack of significant growth in the volume of FX futures trading over the past several years. According to the FIA data, 2.1 billion currency futures contracts were traded in 2017, and while this represents a 302% increase from the 2008 volumes – which is as far back as the FIA data provided goes – this hardly tells the whole story. The data shows that between 2009 and 2010 the volume of FX futures traded jumped 160%, from 950 million contracts to almost 2.5 billion. What drove this sudden spike in trading volumes?
US, European Regulators Clash Over CCP Rules The Commodity Futures Trading Commission (CFTC) has accused the European Commission (EC) of attempting to renege on a previously agreed framework for cross-border CCP recognition, with the EC refuting this characterisation. Speaking at the Futures Industry Association’s (FIA) annual conference in Boca Raton, Florida, Brian Quintenz, a commissioner at the CFTC, outlined details of this recent disagreement. He reminded the audience that in 2016, regulators in the US and Europe agreed a “CCP equivalence determination”, which established a common approach to the regulation and supervision of cross-border CCPs.
FIA Groups Urge CFTC to Maintain De Minimis Swap Threshold FIA and the FIA Principal Traders Group (FIA) have submitted a detailed letter in reposnse to a US Commodity Futures Trading Commission (CFTC) proposed rule making that urges the Commission to retain the current $8 billion de minimis threshold for swap dealer registration. The associations also suggest the CFTC modifies the calculation methodology to “better align it with the goals of a well-regulated derivatives market”. The letter states that the FIA supports the proposed $8 billion de minimis threshold for swap dealer registration purposes, as well as excepting swaps that are exchange-traded and/or cleared from de minimis calculations, without a notional backstop or haircut.
Industry in Alignment Over CFTC Swap Dealer Rules There appeared to be a broad consensus in the responses to the Commodity Futures Trading Commission’s (CFTC) proposed swap dealer rules that the Commission should retain the current $8 billion de minimis threshold for swap dealer (SD) registration and that NDFs should be excluded from the threshold calculations. Since 2012, Commission regulations have stated that market participants will not be considered a "swap dealer" unless they trade over $8 billion per year in aggregate gross notional amount (AGNA). This $8 billion threshold was meant to be a temporary phase-in period, with the threshold ultimately due to be reduced to $3 billion.
CFTC Back to Full Strength After Senate Confirmations The US Senate has confirmed the nominations of Dawn Stump and Dan Berkovitz as commissioners at the Commodity Futures Trading Commission (CFTC), bringing the agency to a full staff of five commissioners for the first time since 2014. Stump, a Republican, was most recently president of consultancy Stump Strategic, prior to which she was a vice president at NYSE Euronext. Stump also previously served as the Futures Industry Association’s (FIA) executive director of the Americas Advisory Board, and held several staff positions in the Senate and House of Representatives.
FIA Updates CCP Position Paper Following Nordic Default The Futures Industry Association (FIA) has released updated recommendations to improve clearinghouse risk management following recent market developments. The developments in question are the placing of a member of Nasdaq Clearing’s Nordic market in default in September. The losses were sufficiently large to exceed the margin provided by the defaulter and the CCP’s own skin in the game and required the use of the commodities default fund. This was the first use of a default fund by a major CCP since a default on KRX, the South Korean exchange, in 2013.
FIA, FIA Tech Release Guidelines for Simplified Execution Source Code FIA together with affiliate FIA Tech, today announced new technical guidelines for firms to properly identify the correct brokerage when executing and clearing exchange traded derivatives.   With the proliferation of execution services, platforms and providers there is increased need for clarity in how to communicate a trade’s execution method through industry standard codes, the groups said in a statement. Brokerage discrepancies are one of the largest causes of operational friction in the reconciliation of exchange traded derivatives, and lack of standardisation has created significant costs for clearing firms and their clients, they noted, adding that by working with FIA’s membership as well as FIA Tech’s global customer base, “the industry has devised standard codes for commonly used execution methods”.
FIA Calls for Removal of Barriers to Clearing The Futures Industry Association (FIA) has filed a response to the Basel Committee on Banking Supervision urging the adoption of FIA's suggested modification to the leverage ratio and to recognise the exposure-reducing nature of client collateral in order to align regulatory incentives. Central clearing of derivatives was a key pillar of the G20 countries response to the post-2008 financial crisis reforms to reduce systemic risk in the financial system, however FIA argues that to date, the leverage ratio’s failure to recognise collateral has had a direct negative impact on the ability of banks to provide clearing services to customers.
On-Exchange Derivatives Trading Grew 20.2% in 2018 New data from the Futures Industry Association (FIA) shows a 20.2% increase in the number of futures and options contracts traded globally on exchanges in 2018.Futures volume rose 15.6% to 17.15 billion contracts traded, while options volume rose 26.8% to 13.13 billion contracts traded."The rapid growth in derivatives trading on exchanges around the world highlights the value that these products continue to provide for end-users and investors," says Walt Lukken, president and CEO of FIA. The overall rate of growth was the highest since 2010, when rapid growth in Asia-Pacific and Latin America combined with a recovery in the North American interest-rate sector to produce a growth rate of 26.4%.
FIA Announces New Management Team FIA’s president and CEO Walt Lukken announces the appointments of Jacqueline Mesa as chief operating officer and Emma Davey as chief commercial officer of the association. “I am excited about FIA’s leadership team at this important time in our industry’s development,” says Lukken. “These appointments will further solidify our management team and help us to better meet the needs of our global membership going forward.”Mesa has been senior vice president of FIA’s Global Policy group since 2013. In addition to her responsibilities on global advocacy, Mesa’s role as COO will involve advising and assisting the CEO on FIA’s day-to-day operations and advancing its global strategy. Before FIA, Mesa worked at the CFTC, including as director of International Affairs for seven years.