CFTC proposal gives exchanges discretion on outage protection plans

FCMs struggled during March trade volume surge | IDX-V survey results pinpoint coronavirus challenges | Panelists discuss commodity market challenges

Created for majed2aboshddad.majed@blogger.com | Web Version

June 26, 2020

CONNECT WITH FIA

FIA's Daily Summary for Derivatives Industry Professionals

A Commodity Futures Trading Commission proposal lays out three principles for futures exchanges to comply with to guard against market disruptions and electronic trading outages. The proposal, which followed extensive discussions with FIA members and other market participants, would allow exchanges to set their own plans for complying with the principles. The CFTC also voted to formally withdraw the proposed Regulation Automated Trading.

Full Story: MarketVoice (6/25), The Wall Street Journal (tiered subscription model) (6/25), Politico Pro (subscription required) (6/25)

FCMs struggled during March trade volume surge

Experts say that the large trade volumes that occurred in March due to the coronavirus crisis left futures commission merchants struggling to process orders, which caused operational bottlenecks. "We might have had some disparities between confirmations being received from a client or trades received from another FCM — that meant that there were huge amounts of investigative work that needed to be carried out," Bank of America's Nick Briggs told FIA's IDX-V conference.

Full Story: Risk (subscription required) (6/25)

Industry Developments

IDX-V survey results pinpoint coronavirus challenges

A majority of market participants say that the biggest challenges from the coronavirus-induced market volatility were margin volatility and unpredictability, according to a poll taken during FIA's IDX-V conference.

Full Story: Markets Media (6/25)

Panelists discuss commodity market challenges

A panel at FIA's IDX-V conference noted that there were lessons to be learned in commodity markets from the coronavirus crisis, though panelists generally agreed the markets functioned well through the disruption. Panelists also discussed the future potential in sustainability-related derivatives products.

Full Story: MarketVoice (6/26)

INTL FCStone to become StoneX Group
The Trade (UK) (6/25)

Gold market approaching an eight-year high
Financial Times (subscription required) (6/25)

Johnson Matthey's Manz to become LSEG's CFO
The Trade (UK) (6/25)

Barclays' Sibley picked to head TP ICAP's FX hub
The Trade (UK) (6/25)

Regulation and Enforcement

US regulators change rules on covered funds, swaps

The US Federal Deposit Insurance Corp., the Federal Reserve and the Office of the Comptroller of the Currency have agreed to end limits on banks' investment in covered funds under the Volcker rule, such as credit funds and venture capital funds. The regulators have also lowered the amount of cash banks must set aside to cover losses on swaps trades.

Full Story: Reuters (6/25), Bloomberg (tiered subscription model) (6/26), The Wall Street Journal (tiered subscription model) (6/25)

Singapore proposes green risk management guidelines

The Monetary Authority of Singapore has proposed separate environmental risk management and disclosure guidelines for banks, insurers and asset managers as part of its Green Finance Action Plan to enhance resilience and the financial sector's role in supporting a sustainable economy. The consultation is open for comment through August 7.

Full Story: Regulation Asia (subscription required) (6/26)

Competition chief encourages cross-border M&A within EU

EU competition chief Margrethe Vestager says that she sees scope for cross-border mergers and acquisitions within the bloc and that consolidation should not be seen as controversial.

Full Story: Financial Times (subscription required) (6/25), The Desk blog (6/25)

BoE to review non-bank firms' resilience

The Bank of England's Financial Policy Committee plans to release an assessment in August as to whether the current risk oversight system is adequate. BoE Governor Andrew Bailey says the assessment will "identify gaps in resilience in the non-bank financial sector and the potential measures that may be taken to increase resilience."

Full Story: Financial News (UK) (subscription required) (6/25)

Libor announcement causes market shift

News that the UK Financial Conduct Authority could make an announcement about the end-2021 discontinuation of Libor before the end of this year caused short-term sterling and US dollar Libor spreads to widen by between 15% and 20%. The change would mean using a different five-year dataset for calculating the spread adjustment.

Full Story: Risk (subscription required) (6/25)

Clayton insists he is fully focused on SEC role
The New York Times (tiered subscription model) (6/25)

Systematic internalisers respond to critics
Practice Insight (6/25)

Technology

Users seek 2-year delay to ASX's blockchain project

Some customers are calling on the Australian Securities Exchange to delay by two years the implementation of its distributed ledger technology in its system to better address the risks.

Full Story: Financial Times (subscription required) (6/25)

Deutsche Bank integrates WhatsApp for communication with clients
The Trade (UK) (6/26)

TP ICAP gets closer to electronification goals
Futures & Options World (subscription required) (6/25)

FIA News

Download a digital copy of MarketVoice magazine

FIA has made its June issue of MarketVoice magazine available in digital format to better reach members who are working remotely. This issue includes a feature on how market participants remain resilient amid the pandemic, and provides an update on Q1 volume trends. Read now!