US Commodity Futures Trading Commission member Dan Berkovitz told the 34th annual Futures & Options Expo in Chicago that he was optimistic that the CFTC's five commissioners will act in a bipartisan way on policy issues that are now pending. Berkovitz said "there's both trust and respect among the members of the commission, and that comes because many of us have worked together."
Brexit won't disrupt insurance and derivatives contracts between parties in the UK and those in countries remaining in the EU, even if no transition deal is reached, says Olivier Guersent, director-general of financial services at the European Commission. "There is no cliff" for cross-border contracts on Brexit day, he says.
An expert panel during FIA's 34th Annual Futures & Options Expo in Chicago agreed that US swaps reform should not allow competitive execution to slide backwards as is occurring in Europe, though there should be room for innovation. The US Commodity Futures Trading Commission's Matthew Kulkin told the panel that "this is not about a roll-back but about tweaking."
A panel at FIA's 34th Annual Futures & Options Expo in Chicago expressed confidence in the growth of derivatives backed by digital assets, but cautioned introducing new products too quickly. "We all really have to be self-conscious that we're professionals in a professional industry, and not just be in a race to apply all the innovations simultaneously and instantaneously," said ErisX chief Thomas Chippas.
Exchange executives questioned margining direct clearing members in light of Nasdaq's declared default of an individual trader in October. Intercontinental Exchange Chairman and CEO Jeff Sprecher told a panel during FIA's 34th Annual Futures & Options Expo in Chicago that the positions of direct clearing members need more scrutiny by central counterparties to be sure they are margined correctly.
The Commodity Futures Trading Commission says it has been unable to get the EU to explain how the definition of "systemic risk" in European Parliament legislation would apply to US clearinghouses. US officials are increasingly concerned US clearinghouses will have to face additional regulation in the EU.
The Basel Committee on Banking Supervision published a consultation on potential changes to the leverage ratio treatment of client cleared derivatives by investment banks, including allowing cash and non-cash client initial margin to offset the potential future exposure of derivatives centrally cleared. The Basel Committee is seeking stakeholder input on the revisions. Read FIA's response.
The European derivatives market is worth €660 trillion, according to a study based on data culled from regulatory filings and compiled by the European Securities and Markets Authority. The report found interest-rate derivatives are the most frequently traded instruments, while central clearing rates on both credit and interest rate derivatives were up 27% and 58% respectively last year.
The Securities and Exchange Commission has introduced the Strategic Hub for Innovation and Financial Technology, a portal that is accessible to the public. FinHub lets users view regulation and information covering blockchain, digital marketplace financing, automated investment advice and artificial intelligence.
CME Group says US West Texas Intermediate crude oil contracts have become a near-24 hour benchmark due to a shift in crude oil exports to Europe and Asia, with the South Korea and China market growing the fastest. "Ten to 20% of our daily volumes are trading in European and Asian hours... names that we never came across are now regulars," said CME's Owain Johnson.
Join us on Oct. 25 for a webinar discussing the history and policy of CFTC regulations that permit non-US firms to offer access to foreign futures markets to US customers, including a discussion of fund segregation standards. Register now!