On June 6, FIA filed a motion with the U.S. appeals court in Chicago seeking to participate as an amicus curiae in the Grede v. FC Stone case, which involves the 2007 bankruptcy of Sentinel Management Group and the subsequent distribution of certain customer funds. FIA's brief supports arguments made by FC Stone in its appeal of a district court's decision that ordered several futures commission merchants to claw back to the bankruptcy estate customer funds that were distributed after the bankruptcy. FIA’s brief argues that the district court’s decision, if not reversed, would erode the certainty of customer protections provided by the Commodity Exchange Act.
Several U.S. trade associations that represent financial institutions submitted a letter to the Commodity Futures Trading Commission on June 6 asking for a six-month extension of an exemptive order issued in December that postponed the application of the CFTC's swap rules to cross-border transactions. That order is set to expire on July 12. In the letter, the trade associations said a six-month extension would provide more time for international regulators to coordinate their efforts to establish a global framework for regulating derivatives and for market participants to consider the implications of the SEC's recent cross-border proposals, which differ from the CFTC’s approach in several important respects. The group of trade associations included the Futures Industry Association as well as the American Bankers Association, the Institute of International Bankers, the International Swaps and Derivatives Association, and the Securities Industry and Financial Markets Association.
The industry has been working to meet the June 1 deadline to comply with CFTC Rule 1.73 that requires executing firms to agree to screen customer orders for limits established by clearing firms with respect to give-up transactions. The FIA Law & Compliance Division has created a standard version of a “screening agreement,” which can be modified, for executing and clearing brokers to agree to screen for such limits. The agreement will be available on FIA Tech’s electronic give-up agreement system (EGUS) in mid-April. This webinar will walk you through the provisions of the agreement and how it can be used to comply with Rule 1.73. We will also provide a brief overview of how the agreement can be executed on EGUS. (This agreement is not applicable to separate requirements in CFTC Rule 1.73 which relate to Account Managers executing Bunched Orders.)
Washington, D.C.—May 21, 2013—Walt Lukken, the President and Chief Executive Officer of the Futures Industry Association, testified today before the House Agriculture Committee at a hearing titled "The Future of the Commodity Futures Trading Commission: Market Perspectives." The hearing is the first of several planned by Representative Frank Lucas (R-Okla.), the committee's chairman, which is intended to inform committee members as they begin drafting legislation to reauthorize the CFTC.
In his testimony, Lukken discussed enhancements to customer protections, the implementation of Dodd-Frank requirements related to the clearing of derivatives, and the current state of the derivatives industry.
Washington, D.C.—May 17, 2013—The Futures Industry Association today announced the appointment of Jacqueline Hamra Mesa as Senior Vice President and Director of International Relations and Strategy. Mesa will be responsible for helping develop, implement and manage FIA’s global regulatory and policy agenda. She will be the association’s principal liaison with international regulators, policymakers and governmental bodies.
The CFTC is scheduled to hold a public meeting on May 16 to consider several sets of final rules related to the trading of swaps, including the long-awaited core principles for swap execution facilities, as well as guidance on its anti-disruptive trading authority. In advance of the meeting, the CFTC released fact sheets and other background information on these rulemakings.
The Futures Industry Association on March 26 submitted a letter to the Commodity Futures Trading Commission’s division of market oversight seeking relief from Part 46 reporting requirements with respect to trades occurring in the contingent EFS and EOO markets for CME Group Clearport and ICE contracts and for energy swaps executed continent upon being promptly submitted to and accepted for clearing as swaps by ICE Clear Europe. In its letter, FIA stated that due to the contingent nature of the trades, CME Clearing and ICE Clear Europe already have relevant trade data that provides market transparency and is available to the CFTC for market surveillance purposes. “Absent relief, market participants are incurring (and will continue to incur) substantial costs to achieve a duplicative result that offers no discernible regulatory improvement over that existing trade data,” FIA wrote. FIA requested that the CFTC act promptly on its request in light of the imminent March 30 and April 10 compliance dates for swap dealers, major swap participants and end-users.
The Futures Industry Association submitted comments to the International Organization of Securities Commissions regarding its consultation, which proposes enhanced customer protections. FIA said it generally supports the principles, which set out to clarify the roles of intermediaries and regulators in enhancing the protection of client assets. FIA noted that it has taken a leading role in a parallel project underway in the U.S.
While FIA gave its support for IOSCO’s overall efforts, it raised concerns with two proposals. One proposal would require intermediaries, such as futures commission merchants, to highlight to their customers the material differences in client asset protection and/or insolvency regimes outside of their home jurisdictions. “We agree that intermediaries should advise clients that, if they trade on a board of trade outside of their home jurisdiction and their funds are held outside of their home jurisdiction, their funds will be subject to the client asset protection and/or insolvency regime of the foreign jurisdiction. We further agree that any such disclosure should be in clear, concise and understandable. FIA’s Frequently Asked Questions are in accord with these recommendations,” FIA said. But FIA cautioned that the intermediary is not in the position of a legal advisor to its clients.
“Intermediaries do not purport to provide legal advice to their clients, and regulators should not require that they do so,” FIA said, recommending that IOSCO maintain and post on its website a description of the client asset protection laws and regulations in the jurisdictions of IOSCO.
FIA also raised concerns about a proposal that would require intermediaries to be able to provide client asset calculations at any time. “Systems employed by FCMs and other intermediaries currently do not permit at anytime calculations,” FIA said. “The backbone for all applicable data related to customer accounts is the end-of-day batch processing, which occurs overnight following the close of trading each day.” FIA explained that margin and commission processing, including all exchange and clearing organization fee calculations, can take several hours to run. “Intraday runs would be a major drain on technology resources and would cause many other essential systems to slow or fail,” FIA warned, adding that such a requirement is even more difficult in the case of bunched orders.
Leaders of several derivatives industry associations, exchanges and clearinghouses issued a public call for the International Organization of Securities Commissions to “energize the dialogue” on the regulation of cross-border derivatives trading. In a letter published on March 20 in the Financial Times, the leaders urged IOSCO to take forward the dialogue on mutual regulatory recognition, which is needed to avoid “regulatory extraterritoriality and the differentiated national implementation of global standards.” The letter was signed by executives from FIA as well as the British Bankers Association, Futures and Options Association, ICE Clear Europe, International Capital Market Association, International Swaps and Derivatives Association, Investment Industry Association of Canada, London Metal Exchange, Singapore Exchange and Swiss Banks Association.
Washington, D.C.March 13, 2013The Futures Industry Association today announced the induction of 12 new members into the Futures Hall of Fame, which was established in 2005 to commemorate outstanding contributions to the global futures and options community. "Since its inception, the Futures Hall of Fame has honored the accomplishments and contributions of 105 remarkable individuals from around the world," said Walt Lukken, president and chief executive officer of FIA. "We are grateful for the work these inductees have done in laying the foundation for the success of our industry."
Washington, D.C. and Boca Raton, Fla.—March 13, 2013—The Futures Industry Association today announced the election of board directors at its annual meeting in Boca Raton, Fla. Fourteen directors were elected in total at the meeting, including eight regular member directors for two-year terms; one regular member director for a one-year term; and five associate member directors for a two-year terms. Following the election, the new board elected the association’s officers and public directors.
Washington, D.C.―March 11, 2013―The number of futures and options traded on exchanges around the globe fell 15.3% in 2012 to 21.2 billion contracts from 24.9 billion in 2011. 2012’s total was the lowest number of contracts traded since 2009 and reflected double-digit declines across Asia-Pacific, Europe and North America, according to statistics compiled by Futures Industry Association.
Volume in the Asia-Pacific region fell by 23.4% to 7.5 billion from 9.8 billion contracts. North American volume fell by 11.9% to 7.2 billion from 8.2 billion contracts and volume in Europe fell by 12.5% to 4.4 billion from 5.0 billion. By sector, contracts based on individual equities fell by 8.4% to 6.5 billion contracts from 7.1 billion; equity index volume plunged by 28.5% to 6.0 billion from 8.5 billion contracts, and interest rate contract volume fell by 16.0% to 2.9 billion from 3.5 billion.
The Futures Industry Association sent a letter to the CFTC confirming that the registration requirement for associated persons only applies to an employee of an FCM if that person is acting as an AP for that FCM. The letter also confirmed that FCM employees who are not acting as an AP for that FCM do not have to register, even if the employee is acting as an associated person of an affiliated swap dealer. The letter is intended to clarify the scope of the AP registration requirement and CFTC no-action letter No. 12-70 related to a March 31 AP registration deadline.
The Futures Industry Association regrets to inform members of the news that Barry Lind, one of the pioneers of the modern futures industry, died yesterday after a car crash in Southern California. FIA issued the following statement to honor him and his contributions to the industry:
“Barry Lind began trading at the Chicago Mercantile Exchange in 1962 and founded Lind-Waldock, one of the industry’s first and most successful discount brokerage firms. He was one of the leaders in the movement to create financial futures in the 1970s and a trailblazer in the use of technology for futures trading. He served for many years on the board of CME and as a director of the National Futures Association, and in 2005 he was inducted into FIA’s Futures Hall of Fame.”
“All of us in the futures industry are indebted to Barry Lind for his many contributions to our growth and development. He was one of the first to recognize the potential to apply the tried and true mechanisms of agricultural futures to the financial markets, and he never stopped thinking about how to make our markets better. We will always be grateful for his contributions, and we share in the sorrow of his friends and family at his untimely passing.”
The Commodity Futures Trading Commission today announced that Commissioner Jill Sommers will leave the agency after five years of service. She joined the agency in August 2007 and plans to leave after the first quarter of this year. FIA issued the following statement today in response to the announcement.
"On behalf of FIA, I want to thank Commissioner Sommers for her service during a very critical time for the agency and the futures industry," said FIA President and Chief Executive Officer Walt Lukken. "Jill always has been willing to carefully examine the details of rulemakings and consider all sides of complex policy issues. I also want to thank her for her leadership on international issues and her support for the CFTC's Global Markets Advisory Committee, which has been a vital source of information and expertise on policy issues related to cross-border trading."
E-clips users: Please note that these news stories are drawn from independent sources. The FIA does not verify or endorse any of these articles, and takes no responsibility for their contents. Please contact Will Acworth at the FIA if you have any questions or suggestions regarding this service. (202) 466-5460
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