Viewpoint
Insights and opinions from key FIA staff
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Viewpoint – Boca highlights resilience, risk-management and technology
Last week’s FIA Boca conference was a resounding success on many levels. A few key themes worth highlighting from this flagship event are the resilience, risk-management and technology potential of our markets.
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Viewpoint – The 'rise in retail' is here to stay in derivatives markets
There has been a lot of attention the last few years on the rise of retail trading. The meme stock craze highlighted the power of this community to express a forceful point of view in the markets. Retail participants, especially Gen Z, are the driving force behind cryptocurrencies and their promise. Even the futures markets have shown an increase in retail participation, especially in micro-sized contracts. The Commodity Futures Trading Commission estimates that retail trading volume in futures contracts on US exchange now averages about 50% higher than during the pre-pandemic period.
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Viewpoint – Issues to watch in global derivatives markets
Global cleared derivative markets are made up of a wide variety of participants, from different geographies and different business disciplines. But surprisingly, many of my conversations to start 2023 have focused on a few key priorities.
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Viewpoint - Lessons from the Year of Crypto
FTX's unlawful use of customer money should not completely overshadow the groundbreaking ideas it was proposing to disrupt finance. Direct access to exchanges, auto-liquidation, real-time margining—these ideas are not going away. Whether we like it or not, these new approaches to market structure will continue to challenge our way of doing business.
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Viewpoint – Responding to the European energy crisis, as a community
As we enter the colder months at the end of the year, natural gas prices around the world remain incredibly volatile after hitting record highs recently. This is particularly the case in Europe, where I recently visited policymakers in Brussels and Paris with FIA board members. In our conversations, the energy crisis crowded out every other issue on our agenda – and with good reason.
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Viewpoint – Major questions doctrine and implications for US derivatives markets
The US Supreme Court rarely opines on policy matters related to derivatives. From time to time, however, one of its decisions has such profound effects on our understanding of the law that everyone involved in policy matters related to derivatives needs to understand the implications. The Supreme Court's recent decision in West Virginia v EPA is one such decision, writes FIA's Allison Lurton.
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Viewpoint – Digital assets are the topic in DC this summer
Chair Debbie Stabenow (D-MI) of the Senate Agriculture Committee and Ranking Member John Boozman (R-AR) introduced the Digital Commodities Consumer Protection Act of 2022 last week. This much-anticipated legislation would give the Commodity Futures Trading Commission (CFTC) new tools and authorities to regulate the cash digital asset commodity market while leaving the regulation of digital assets that are deemed securities to the US Securities and Exchange Commission (SEC).
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Viewpoint – Influential People to Watch in 2022
Over the last few months, FIA President and CEO Walt Lukken has had the pleasure of connecting with many key policymakers who are in the thick of major initiatives impacting the future of our markets, especially in the areas of energy, climate, and digital assets. These will be some of the key individuals to watch as the agenda develops for our markets globally.
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Viewpoint - Playing the long game
Let's set aside the specifics of the FTX proposal for a moment and broaden our lens to what is happening. There is a larger trend impacting the financial services community where technology is revolutionizing the infrastructure of our markets, particularly resolving risk management and settlement.
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Viewpoint - Getting margin right
When derivatives markets become more volatile, everyone agrees that margin requirements must go up. But how much higher? Set margins too high, and trading becomes too expensive. Set margins too low, and traders take too much risk. It's the Goldilocks problem – margin needs to be just right.
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