'Trust is foundational to open and accessible markets'

Opening remarks of Walt Lukken, President and CEO of FIA, at the FIA IDX conference

20 June 2023

Opening remarks of Walt Lukken, President and CEO of FIA, at the International Derivatitves Expo in London on 20 June 2023. 


Welcome to IDX for our 15th year of hosting this amazing conference! It's so wonderful to be back here in London … one of the best, if not the best, cities in the world.

For me, it feels like London is back. The tube and pubs are packed, and the city appears to be thriving.

IDX is back, too! We’ve returned to the Park Plaza and FIA is thrilled to announce registrations of more than 1,100 conference attendees!

Is it just me, or does it feel like we’re finally breaking through the funk of the last five years? So much has happened over that time, from Brexit to the pandemic to the war in Ukraine to the passing of our beloved Queen Elizabeth II.

And while I don’t want to minimize these events, truthfully, I am ready to look to the future, focus on the positive and move on.

Here in London, there is so much to look forward to. You are still one of the most global, multicultural cities on the planet!

And it’s clear that London will remain a key global financial center for many years to come. It’s simply in your DNA.

Most importantly, London, you are still best in class at coronations, rock and roll, pavement pub drinking ...  and of course, proper queuing!


A system of trust

Oh sure, you may laugh but queuing is something Brits should be extremely proud of!

In fact, as I was standing in line at customs at Heathrow, I achieved a rather Zen-like appreciation for the art of queuing here in the UK.

As I waited my turn, my jet-lagged mind contemplated the societal benefits of queuing. It teaches us patience. It provides order out of chaos. But most importantly, it’s fundamentally an exercise built on fairness, and trust between people.

I also began to reflect on these concepts in our industry when a thunderbolt moment hit me. Trust is not only the currency that makes our markets run; it is the most precious asset our industry has at its disposal.

Why? Because trust is foundational to open and accessible markets that allow customers to effectively manage risk.

Everywhere you look, trust has been institutionalized into our markets--whether it’s exchange rules for buyers and sellers, the actions of clearinghouses and their members to protect market integrity, or a regulatory process that is transparent and predictable.

Fairness goes hand in hand with trust, too. Free markets only work if there's a level playing field and a belief that markets are not rigged. Bad actors need to be punished for wrongdoing, prices must be honest reflections of supply and demand, and competition should be won on its merits. These are the founding principles of sound markets.

As a global trade association, FIA strongly defends these principles by supporting fair, open, and accessible markets for customers to manage risk—whether that's here in the UK and Europe, in China and Asia, or in the Americas.

This fundamentally requires institutions and processes that garner trust—especially due to the cross-border nature of our markets.

Admittedly, I am an unapologetic internationalist. My mentor early in my career was U.S. Senator Richard Lugar, who was both knighted and given the US Presidential Medal of Freedom for his work in international affairs – including his unwavering support for NATO, an institution that is more important than ever.

His beliefs, which are now my beliefs, are that global engagement builds a better world. Such engagement on free trade and national security opens doors to new opportunities, but also builds a critical foundation of trust that may be needed during difficult times.

As a former regulator with the CFTC, I applied these principles of engagement to our markets. I led the agency’s Global Markets Advisory Committee, and I engaged with IOSCO on how to raise standards for our markets globally.

And when I was nominated to be CFTC chairman just before the financial crisis, I vividly remember having to use this reserve of trust as I worked with my foreign counterparts to protect our markets and their customers.

Over the last 40 years, we have acknowledged the cross-border nature of our markets through a cooperative regulatory structure of equivalence and recognition. This equivalence allows customers choice and offers access to global markets – without sacrificing market protections or user experience.

But this system, once again, comes back to trust.

For any of this to work, regulators must believe that a foreign jurisdiction will protect their national interests and citizens through local laws and regulations.  

Our system of cooperation has come under strain in the last 15 years, beginning with the financial crisis that placed doubt in the value of free market capitalism.

Other political events followed, from Brexit to the election of Donald Trump.

Then came supply chain disruptions caused by the pandemic, and the war in Ukraine that forced governments to think seriously about the nations they do business with. 

I can understand why some have wondered about the value of globalism. Some folks out there see the headlines and start to wonder whether they are better off going it alone.

I emphatically believe this is a mistake.

Whether we like it or not, we’re all interconnected in this modern world! History is fraught with examples of isolationism leading to stagnation and conflict. And in global derivatives markets, we need each other more than ever to overcome challenges, understand our differences, and find collective solutions that benefit our markets – and the global economy as a whole.

The problem with trust is that it is gained over a long time but lost in a moment. Some of the events of the last few years have diminished the trust between traditional allies like the EU and UK.

It will take some time for this trust to be rebuilt, but it starts with small steps – such as news that the European Commission and UK have reached an agreement on an MOU for financial regulatory cooperation.

When I was in Brussels at the end of May, Commissioner McGuinness was visiting London to discuss this MOU and future cooperation with Chancellor Hunt and Bank of England Governor Bailey.  That may not seem like a big deal. But that visit, along with the MOU, signifies an improving relationship between parties—a rebuilding of trust—on which other cooperation can be built.

That’s how our markets will succeed. Through steady progress and cooperation that opens doors to new opportunities and builds partnerships that will endure.

My mother used to say that time heals all wounds, and it turns out that Carol was right. While we are sure to have our differences, all nations are ultimately better served by working together.  And FIA stands ready as a trusted advocate to work with global regulators to keep our markets the most liquid and accessible in the world.


I now want to turn to another important area of trust and cooperation -- operational resilience. A pillar of FIA’s mission is to uphold the integrity of markets and raise standards for our collective members. And when it comes to operations, our industry must ensure our world-class markets are engineered to efficiently handle an ever-growing volume of trades.

That’s why last year we formed the Derivatives Market Institute for Standards, or DMIST for short: To raise the operational standards of our markets and improve their resilience.

Last week, FIA and DMIST jointly announced the publication of its first standard on the timeliness of give-up trades and allocations, placing a 30-minute clock on certain steps of this trade flow.

This marks an important milestone in our work to improve operational efficiency, driven by industry consensus and expertise.

FIA is also tackling the cybersecurity of our markets to ensure we are prepared when such attacks occur. And believe me, they will occur. The cyber disruption earlier this year was a wakeup call, but also showed how our industry could come together when it matters.

During the hours and days following this incident, I saw seasoned risk managers sharing experiences with colleagues -- and even competitors – for the betterment of the markets.

I saw exchanges and CCPs showing flexibility with customers and keeping clearing windows open when needed.  

It was a wonderful example of our industry coming together in a time of disruption. But there is more work to be done. FIA assembled a Cyber Risk Task force earlier this year, and the group is planning to publish a report with recommendations to ensure we are better prepared for the next disruption. Stay tuned in the coming weeks.


I’ll close by noting that FIA takes great pride in our mission of ensuring fair, efficient, and resilient derivatives markets around the world. But we can only execute that mission by earning and nurturing trusted relationships with our members, and with the policymakers that impact them.  

That’s why we’re here in London at IDX. Trust is not built on Teams, Zoom or emails. Trust is built by personal engagement—whether it’s learning something from a panel, discussing industry solutions on the trade show floor, or even laughing with a colleague over a pint at the pub.  

That’s also why FIA is increasingly taking our show on the road, with regional forums across Europe and Asia in the same spirit of trust and friendship.

So far this year, we have hosted events in Brussels, Hong Kong, Stockholm and Sydney. And in the months ahead, we’ll be in Leipzig, Taipei, Houston and Frankfurt.

That’s because FIA relies on our relationships with all our members around the world. We need your trust and expertise to advance our work, and I am so grateful for the trust you place in FIA every day.

So, thank you. Thank you for being members of FIA and attending this conference. 

And of course, thank you to the generous sponsors and exhibitors who support this event. IDX is better than ever because of you.

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