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Lukken Comments on Global Markets
Keynote Remarks of FIA President and CEO Walt Lukken 78th Shanghai Clearing House Forum: Financial Risk and Innovation June 27, 2018
CONTINUE READINGFIA clearing members oppose public entity exemptions from margin requirements
FIA submitted a letter to the European Commission and European Securities and Markets Authority on July 27 expressing opposition to the idea of allowing public entities to be exempt from obligations to provide derivatives clearinghouses with default fund contributions and initial margin. These requirements apply to all other clearing members and if granted the exemptions, such public entities would get the benefits of clearing at the expense of other clearing members, FIA said.
CONTINUE READINGFIA, Institute of International Finance and Global Financial Markets Association urge fair treatment of global capital rules for clearing
Washington, DC – FIA, the Institute of International Finance (IIF), and the Global Financial Markets Association (GFMA) filed a response to the consultative report of the Derivatives Assessment Team (DAT) on “Incentives to centrally clear over-the-counter (OTC) derivatives” (DAT Report). The Associations agree with the DAT’s findings that there are impediments to accessing central clearing and urge global regulators to take action. Regulatory capital treatment of banks' clearing activity is the key constraint on client clearing capacity by service providers, according to the response.
CONTINUE READINGLukken Commemorates FIA Affiliate FIA Japan on their 30 Year Anniversary
Washington, DC - Today, FIA President and CEO Walt Lukken paid tribute to the 30 year success of FIA affiliate FIA Japan:
CONTINUE READINGFIA Updates FCM Risk Disclosure Booklet to Include Virtual Currency Disclosures
To help U.S. futures commission merchants comply with new disclosure requirements related to the trading of bitcoin and other virtual currencies, the FIA Law and Compliance Division has issued an updated version of the FIA Uniform Futures and Options on Futures Risk Disclosures, commonly referred to as the FIA Risk Disclosure Booklet.
CONTINUE READINGFIA Recognizes the Life of John J. Conheeney
FIA today recognized and remembered the life of Futures Hall of Fame member John J. Conheeney who passed away this week. John was a 40-year veteran of the futures industry, serving as a longtime chair and member of the FIA board. John was an early and vocal advocate for electronic trading at a time when open outcry was the dominant method of trading. John worked at Merrill Lynch Futures for most of his career and retired as its chief executive in 1994. He also served on the board of the Chicago Board of Trade and the New York Mercantile Exchange. He was a founding board member of the National Futures Association and Chair. He was inducted into the Futures Hall of Fame in 2005.
CONTINUE READINGFIA responds to Volcker Rule consultation, urges greater legal certainty for clearing services
On Oct. 17, FIA submitted a comment letter responding to amendments to the Volcker Rule proposed by U.S. banking regulators and market regulators in July. The letter focused on a section of the proposed amendments that relates to clearing services provided by a bank to hedge funds and private equity funds that are serviced by a bank affiliate acting as, for example, an investment manager, investment adviser, commodity trading advisor, or sponsor to the funds. The letter sought to clarify that this type of clearing service is not the type of activity that was intended to be prohibited by the rule, and expressed FIA's support for a rulemaking by the Commodity Futures Trading Commission to allow all banks to provide clearing services to funds that are customers of affiliates.
CONTINUE READINGFIA offers recommendations for CFTC and SEC harmonization
On Nov. 14, FIA submitted a letter to the CFTC and the SEC proposing several areas where it recommends that the CFTC and the SEC coordinate and harmonize their regulatory programs for cleared derivatives. FIA focused in particular on simplifying rules that apply to firms that are dually registered as futures commission merchants with the CFTC and as broker-dealers with the SEC. These areas include record-keeping, reporting, margin rules, and oversight of products subject to both agencies' authority. FIA also proposed codifying certain exemptions for security-based swaps.
CONTINUE READINGFIA asks SEC to amend proposed margin requirements for credit default swaps
On Nov. 19, FIA submitted a letter to the Securities and Exchange Commission in response to a re-opening of the comment period on proposed rules relating to single-name credit default swaps and other security-based swaps. The proposed rules, which include capital, margin and segregation requirements for security-based swap dealers, was first issued in November 2012 but never finalized. In October 2018, the SEC updated the proposal and re-opened the comment period to seek additional feedback from market participants. In its letter, FIA urged the SEC to reconsider a proposed requirement that clearing firms seek SEC approval for their margin methodologies and internal risk models. Instead the SEC should adopt a "harmonized approach" that defers to the standard margin methodologies used by clearinghouses such as ICE Clear Credit, FIA said. In addition, FIA urged the SEC to coordinate with the Commodity Futures Trading Commission regarding the proposed capital requirements and pointed in particular to three proposed amendments that could impair the ability of clearing firms to clear security-based swaps.
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