One of LCH's clearing members had to pay €1.69 billion to the CCP in the fourth quarter of 2023, the biggest payment to the CCP since the second quarter of 2018. The amount was three times larger than the largest call reported the quarter before. LCH's estimated largest payment obligation from a single clearing member default fell to €21 billion in the period, down from €25.7 billion three months before.

Traders were effectively ousted from India's exchange-traded currency derivative market after the Reserve Bank of India enforced a rule that allows the use of rupee forex derivatives only for hedging. Previously, a rule allowing transactions of up to $100 million without proof of forex exposure had been interpreted by investors as a greenlight for speculative trading on the currency derivative market. Now the RBI has reaffirmed its position on a circular, catching traders with unhedged positions off guard. Open interest in the rupee currency futures has fallen by more than half since the end of March as a result.

Asian financial markets have continued to develop and diversify, market participants said. Although they have broadened past Japan, interest in that country is also "really starting to come back," said William Fyfe, senior vice president at KGI Securities Singapore, citing the strength of the Nikkei 225. Interest in the onshore Chinese commodity derivatives market and India is also growing, industry participants said.

Market structure differences between Europe and the US lead to higher costs in Europe, said Iouri Saroukhanov, head of European equity derivatives at Cboe Europe. The US is cheaper "because there is enough competition, there is choice, there is enough transparency and there is the ability for the liquidity providers to manage spreads," Saroukhanov added, saying "we need to really start building something and making things different to what they were before."

Foreign investors looking to buy into Indian debt are turning to offshore swaps to overcome the country's investment regulations. Much of the $9.3 billion in net inflows into Indian bonds is expected to have come from offshore derivatives, said Parul Mittal Sinha, India head of financial markets at Standard Chartered Bank.

Market participants have criticized Emir 3.0, saying it fails to address the issue of fragmentation. Niels Lemmers, head of Public Affairs at Flow Traders, said he remains unsure if Emir 3.0 will address the fragmentation and constant price increases, while Diederik Dorst, chief commercial officer at All Options, said post-trade remains an unaddressed issue.

Hong Kong's new crypto exchange regime "blocks a lot of global users from coming to Hong Kong," said Livio Weng, chief executive of HashKey Exchange, one of Hong Kong's two licensed crypto exchanges. The rules only allow exchanges to serve clients that pass checks and have funds in a local bank account. Nearly 25 companies applied for a license, but if the rules aren't broadened the market "couldn't even support four," Weng said.

Artificial intelligence is becoming a staple in the workplace, but organizations have yet to take full advantage of it as a risk and compliance management tool. Many firms are struggling to understand how it can assist financial traders. Research shows around 65% of highly regulated businesses are interested in understanding new AI regulations, and one quarter view the lack of clarity on AI rules as a concern.

In today's turbulent and rapidly evolving financial landscape, the efficient management of financial market volatility is paramount. During recent crises, FIA has noted the pivotal role Volatility Control Mechanisms (VCMs) have played in preserving market integrity. To find out more, FIA engaged with global derivatives exchanges and market participants to explore the most effective ways to mitigate disruptions while ensuring transparent price discovery. Learn more and download the best practices.