Goldman Sachs Group and Morgan Stanley are planning to relocate employees based in London to elsewhere in the EU as the UK negotiates its withdrawal from the EU. Richard Gnodde, head of Goldman Sachs International, says the bank is actively seeking extra office accommodations in Paris and Frankfurt, Germany.
The Commodity Futures Trading Commission is looking into the possibility of enhancing the risk controls already incorporated in automated-trading systems as an alternative to imposing new prescriptive safeguards on market participants, said Daniel Bucsa, deputy director of market oversight. "We're trying to take advantage of what's already out there, leverage it, and allow them to expand and build upon it, rather than cause complications or duplication of that work," he said.
Brexit has prompted London's biggest European rivals to scramble in luring financial business from Britain, and the European Commission is striving to ensure no regulatory shortcuts are being used. The commission is also considering bolstering the powers of regulators to counter negative consequences stemming from Brexit.
The European Banking Authority's proposal of an alternative regulatory capital framework for nonbank investment firms is too narrow, industry participants say. The plan is ambitious but "needs to be adjusted quite fundamentally in terms of calibration," says Piebe Teeboom of FIA's European Principal Traders Association.
LCH's SwapClear is moving to let buy-side clients cope with stress by overcollateralizing positions above the baseline initial margin. "It's really designed to target players with concentrated directional risk, which we'll probably see more of over the course of the next year as positions in the clearing book become more mature," said Bruce Kellaway of LCH.
Don Wilson, founder and CEO of the Chicago-based proprietary trading firm DRW, has seen a lot of changes to the markets and trading over the past few decades. While he awaits judgement on market manipulation accusations, Wilson is careful about what he says, but he discusses the formation of DRW, how regulations and other factors have changed the markets and what's next for his firm.
Revenue for high-frequency trading operators in the US fell to $1.1 billion in 2016, according to Tabb Group. This formerly lucrative segment is facing difficulties including rising costs and stiff competition, with some firms eyeing mergers and others quitting altogether.
Power and gas traders hope deregulation by the Trump administration will increase incentive compensation in energy and commodity markets. "A lighter touch on regulation ... could lead to bigger, faster growth," said Peter Henry of H.W. Anderson.
FIA is proud to share our 2016 Year in Review. This annual report details the work FIA has done on behalf of the industry across Asia, Europe and North America. From merging into a single, global organization and advocating for the industry to our work on capital requirements and clearinghouses, FIA was hard at work in 2016. Check out our report, and learn about all of the things we have been addressing on behalf of the industry.