June 7, 2021
FIA SmartBrief
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Top Stories
CME Clearing plans to release a white paper that rebuffs complaints, including criticism from the FIA and the International Swaps and Derivatives Association, that low margins set by many futures and options clearing houses have led to large margin spikes during times of high volatility and defended its one-day margin period of risk. "Focusing on the holistic performance of a CCP's margin methodology on an outcomes basis, as opposed to narrowly focusing on specific parameters and products, is consistent with the objective of looking at a CCP's practices from a financial stability and systemic risk perspective," notes the paper.
Full Story: Risk (subscription required) (6/6) 
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Investors are betting on the pandemic recovery by putting more money into hedge funds that focus on commodities after years of outflows, with several such hedge funds reporting stronger returns so far this year.
Full Story: Reuters (6/4) 
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Industry Developments
SIX plans to migrate recently acquired Bolsas y Mercados Espanoles' trading platform onto its own existing trading platform, though the integration will not include derivatives trading and services. The consolidation of the platforms are pending regulatory approval.
Full Story: The Trade (UK) (6/4),  Global Investor (subscription required) (6/4) 
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The FIA European Principal Traders Association has released a report on how its members are supporting environmental, social and governance principles for sustainable investing in futures and options, and what more can be done in the future. "FIA EPTA members will challenge themselves to identify ways within their own operations to support the establishment of a circular economy, i.e. to reduce the carbon intensity of their own operations and those of their business partners, e.g. regarding the energy use of market data centers," notes the report.
Full Story: Futures & Options World (subscription required) (6/4) 
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Hong Kong Exchanges and Clearing reported a 15.2% increase in stock options trading in May, compared to the same month in 2020. The gain largely compensated for a decline in equities futures trading.
Full Story: Global Investor (subscription required) (6/4) 
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The London Stock Exchange Group said in a client note that forcing London's euro derivatives clearing to relocate to the EU would give the bloc a competitive disadvantage. "Restricting access to the EU economy and the Euro would place EU firms in competitive disadvantage against their peers and would also increase risk to financial stability both in the EU and more widely," said LSEG.
Full Story: Reuters (6/7) 
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Regulation and Enforcement
The Reserve Bank of India still has "major concerns around cryptocurrency" even though it had set aside its 2018 crypto trading ban, according to RBI Governor Shaktikanta Das. "It is for each investor to make his own appraisal, to do his own due diligence, and take a very careful call with regard to his own investments," says Das.
Full Story: The Block (6/4) 
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The Securities and Exchange Commission has removed William Duhnke as chairperson of the Public Company Accounting Oversight Board and has named board member Duane DesParte as acting chairperson. The SEC is also looking for candidates to fill all five of the PCAOB's seats.
Full Story: Bloomberg (6/4),  The Wall Street Journal (6/4) 
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European green asset ratio rules could drive more volume to derivatives, if they are excluded from the Commission's green taxonomy.
Full Story: Bloomberg (6/6) 
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IBM is offering financial firms a new cloud service following a decentralized trading model for firms that plan to continue with remote working.
Full Story: WatersTechnology (subscription required) (6/4) 
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FIA News
Join FIA and SIFMA AMG on June 8 and 9 from 10:15 a.m. ET - 2:00 p.m. ET daily for our virtual take on the Asset Management Derivatives Forum. Market participants from all sides of a trade and leading regulators will examine the latest developments impacting the use of derivatives by asset managers, including business, clearing, regulatory and operations issues. With keynote speakers and panels, this virtual Forum presents a unique opportunity to gain insights into how investors, sell-side firms and market structure operators view the landscape for derivatives activity by the asset management community, attracting attendees from the joint membership of FIA and SIFMA Asset Management Group. Register today!
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