October 28, 2021
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Top Stories
Senators question CFTC's Behnam on climate, crypto
Behnam (Commodity Futures Trading Commission)
In a hearing that is part of his nomination to become permanent chairman of the US Commodity Futures Trading Commission, acting chair Rostin Behnam testified before the US Senate Agriculture Committee on issues including climate related risks to financial markets, voluntary carbon markets and the regulatory environment for digital assets.
Full Story: MarketVoice (10/27),  Reuters (10/27),  The Block (10/27),  BNN Bloomberg (Canada) (10/27) 
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The US Securities and Exchange Commission is reportedly only allowing unleveraged exposure to bitcoin futures contracts and has asked Valkyrie Investments to withdraw its leveraged bitcoin exchange-traded fund proposal, according to sources. Meanwhile, Direxion has filed an application for an ETF that effectively bets against the ProShares ETF's bitcoin futures contracts.
Full Story: The Wall Street Journal (10/27) 
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Industry Developments
CME Group saw its average daily volume rise 14% to 17.8 million contracts from a year ago. CME's 53% increase in interest rate futures, 18% increase in energy futures and 170% increase in bitcoin futures volumes pushed third-quarter revenue up 2.6% to $1.11 billion.
Full Story: Reuters (10/27),  Finance Magnates (10/27),  Global Investor (subscription required) (10/27) 
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Hong Kong Exchanges & Clearing's third quarter profit fell 3% to $417.9 million as its revenue rose 10% over a year ago. Derivatives contracts average daily volume was up 4%, which included a 30% increase in stock options trading.
Full Story: South China Morning Post (Hong Kong) (10/27),  MarketWatch (tiered subscription model) (10/27) 
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FIA Tech has added three new services -- Cross Reference Symbology, Contract Specifications and Cash and Collateral -- to its reference data offering to help improve the futures markets' efficiency. "We have seen strong market demand for these offerings and believe they will offer significant value to existing and new customers," says FIA Tech head of reference data Andrew Castello.
Full Story: Asset Servicing Times (10/27) 
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TP ICAP has tapped Speedwell to launch a first-of-its-kind climate-based index for futures and options transactions. "This innovation is key in being able to develop hedging strategies relating to climate change," says TP ICAP managing director for weather markets Nicholas Ernst.
Full Story: Futures & Options World (subscription required) (10/27) 
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Soybean Oil’s Role in Alternative Fuels
Legislation from the US and EU is driving increased demand for biodiesel and renewable diesel, both of which are often derived from soybean oil. Last year, biodiesel accounted for 35% of US soybean oil use, with demand expected to continually increase. Read more.
Regulation and Enforcement
The EU has published a draft of the laws that will implement the Basel III bank capital rules to tighten banks' capital requirements beginning in 2025, rather than 2023 as previously proposed. The EU said that by 2030 the new rules will increase mandatory bank capital by less than 9%, but banks say the figure will be much larger.
Full Story: Reuters (10/28),  Asset Servicing Times (10/27),  Financial Times (subscription required) (10/27),  Independent (Cork, Ireland) (10/28) 
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The European Central Bank has named 30 members to its recently formed Digital Euro Market Advisory Group to advise the national central banks within the euro zone on creating and distributing a central bank digital currency. The group plans to meet quarterly starting next month, offering consultations between sessions during the 24-month digital euro investigation phase.
Full Story: The Block (10/27) 
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Cboe Global Markets is set to release new small-size options contracts, called Nanos, in the first quarter of next year as part of its push towards attracting more retail traders. The contracts will be the smallest mini or micro option on offer, at one hundredth the size of the existing Mini-S&P 500 option, which is itself one tenth the size of the standard index.
Full Story: Global Investor (subscription required) (10/28) 
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The second draft of China's futures law released for consultation includes a proposal to expand the definitions to include more over-the-counter derivatives. The revised version includes several amendments tabled by the International Swaps and Derivatives Association, such as expanding the definition of OTC derivatives to include options, forwards, swaps and any combination of these products.
Full Story: Regulation Asia (tiered subscription model) (10/28) 
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FIA News
The countdown to Expo is on! Starting next week we'll be covering topics like operational efficiencies, treasuries clearing, sustainability, crypto markets and much, much more. We've recently added multiple new speakers to our lineup. View the full agenda and be ready to take part in bold conversations. In between sessions, take time to visit one of our 30+ exhibitors and fintech startups in the exhibit halls and Innovators Pavilion. You'll also have the opportunity to re-connect with the cleared derivatives community during numerous networking breaks, the Wednesday networking reception on the show floor and the luncheons. Register now!
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Winter had stretched Long chill fingers into the brown, streaming hair Of fleeing October.
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poet, journalist, political activist
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