The Futures Industry Association commissioned the TowerGroup to conduct a survey of the spending, staffing, online order flow and technology priorities of futures commission merchants on a global basis. The survey was sent to 127 firms. The results represent 40 percent of the total futures industry, as measured by net capital. Full survey results can be found on the FIA or TowerGroup Web sites at www.fiafii.org or www.towergroup.com.
Robert Iati is the director of the Securities & Capital Markets practice at TowerGroup, a leading advisory research and consulting firm focused on the global financial services industry. He can be reached at email@example.com .
When a global intermediary needs leadership for its e-commerce initiative, what better place to look than the business unit that is international and has already experienced the move to electronic trading?
U.S. clearing organizations would be given the flexibility to clear swaps transactions and operate separately from any of the three newly designated categories of exchange or trading facilities under the new regulatory framework proposed by the CFTC in late February.
The U.S. market may be way ahead of Europe with respect to developments in the business-to-business arena, but European exchanges seem to be ahead of U.S. markets in taking advantage of opportunities in these emerging markets.
The business-to-business market is discovering what the futures market has known all along-find a common location to bring buyers and sellers together, offer a standardized product, remove the credit and counterparty risk, and you have an efficient marketplace...with the added benefits of price discovery and transparency. While automating the procurement process for goods and services has brought efficiencies that reduce cost, the real savings come when prices of goods and services can be determined in a public forum. Hence the proliferation of new companies to provide services to the B2B community.
Technology has dramatically reduced the natural barriers to entry for new exchanges. Attracting a significant number of buyers and sellers to a centralized market place is much easier in cyberspace than in Chicago or New York, a reality which has created an unprecedented burst of interest in creating new exchanges.
Both the Senate and House Agriculture Committees have circulated for comment from the industry and government officials draft legislation which attempts to sort out the scope of the Commodity Exchange Act and its application to the trading of over-the-counter markets.