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2022 Year in Review

Building better markets for a brighter future.

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Commodities Clearing and Trading Operations and Technology Cross-Border Sustainability Digital Assets Diversity Community and Events Products and Services Affiliates
Walt Lukken
Walt Lukken
FIA President and CEO

We seem to say this a lot lately, but the last year was full of extraordinary challenges. Chief concerns in global derivatives markets this time around included Russia's invasion of Ukraine that disrupted global commodity markets, a sudden and alarming increase in inflation, and the collapse of FTX that has prompted an urgent call for oversight of crypto markets.

As our industry rose to face these new challenges in 2022, the past year also reinforced long-standing truths about the strength of our markets. Namely: that when uncertainty is all around us, risk management and price discovery are more important than ever. 

These functions are at the core of cleared derivatives markets, and are foundational concepts that drive FIA in our work. Our member firms each play an integral role in markets that are helping the world rise to present challenges, and to build a better future.

Derivatives contracts were quite literally created to help manage future risks. Price discovery in our markets helps allocate capital efficiently across the global economy. So, it should be no surprise that when the global economy faces serious pain, our markets are a key part of the response. This is as true today as it was back in 2007, or even 1987.

FIA’s job is to make sure that policy makers understand the valuable role derivatives markets play – even if the price signals sent by these markets can be unpleasant.

As the past few years have shown us, there is no way of knowing what the future will hold, however, FIA stands firm in defense of our markets. We take great pride in supporting all types of market participants – exchanges, CCPs, intermediaries, technology providers, law firms and end-users - because it takes all of us, working together, to ensure our markets work as they should.

FIA's 2022 Year in Review rounds up some of our most important work on behalf of our member firms, and what our association is doing to support and promote the cleared derivatives industry.

Thank you for all your support!

Read more about FIA's key work areas in 2022...

Commodities
#commodities
Commodities
Clearing and Trading
#clearing
Clearing and Trading
Operations and Technology
#operations
Operations and Technology
Cross-Border
#cross
Cross-Border
Sustainability
#sustainability
Sustainability
Digital Assets
#digital
Digital Assets
Diversity
#diversity
Diversity
Community and Events
#community
Community and Events
Products and Services
#products
Products and Services
Affiliates
#affiliates
Affiliates

Commodities

Commodities

The price discovery and risk-management functions of cleared derivatives markets have been featured prominently as supply shocks have disrupted global commodity markets. This has been true around the globe, from the EU to the UK and from America to Asia.

We published a brief FAQ for regulators in the EU on the valuable role intermediaries play in providing price-discovery and risk-management and a whitepaper about stresses caused by the energy crisis in Europe.  We also published an important letter on the disruption a gas price cap would cause to market liquidity and risk management, creating systemic and operational risks. We also held face-to-face forums in Frankfurt, Milan, Brussels and Paris to discuss regulatory and industry developments including the potential negative impacts of market closures, artificial price caps, and other measures.

Elsewhere, FIA resumed its popular Houston commodities forum in 2022 for the first time since 2019 to offer market participants in this energy hub an important venue for networking and education.

We also continued to engage with market participants across the Asia-Pacific region. As in other areas of the world, this key region dealt with volatility across energy, agriculture and metals markets. FIA has also worked with market participants in China on the continued rollout of internationalized commodity contracts in the region.           

Notable FIA work

Clearing and Trading

Clearing and Trading

Outside of the big news-driven issues like the impacts of the war in Ukraine or the collapse of FTX, FIA continued to work on long-term and foundational issues that matter to our members. Our support for open, transparent and competitive derivatives markets is driven by a host of ongoing workstreams, consultations and regulatory initiatives across the trading and clearing lifecycle.

A major FIA initiative was the FIA Exchange Risk Controls Repository that debuted in March. In consultation with member firms, FIA developed a survey that helps provide greater transparency and facilitates risk-control benchmarking for global brokers, clearing firms, trading firms and commercial and institutional traders.

FIA also engaged in a host of work on capital and margin requirements: Banks that provide clearing services for their customers can be significantly affected by changes to capital and margin requirements, and FIA works tirelessly to help regulators understand the risk-reducing effects of clearing and the need for a diverse community of clearing firms. 

CCP recovery and resolution was also a key area of focus in 2022. FIA continues to consult with regulators on the proper approach to protect market integrity, including contemplating non-default losses.  FIA is also working with members and external counsel to produce industry standard disclosures and template contractual clauses to comply with the EU CCP Recovery & Resolution regulations.

Notable FIA Work

Operations and Technology

Operations and Technology

Last year featured significant work from FIA in the areas of operations, execution , regulatory reporting and technology. In 2022, FIA formally launched the Derivatives Market Institute for Standards, Inc.—or DMIST— as an industry standards body focused on improving the efficiency, resilience, and competitiveness of the exchange-traded and cleared derivatives markets and to support ongoing innovation.

The independent body, of which FIA is the founder and sole statutory member, is the result of a multiyear effort to galvanize private sector support for the modernization of our post-trade market infrastructure. FIA helped support DMIST in the release of its first public consultation on a proposed standard on the timeliness of trade give-up and allocation. 

Beyond this important standards effort, FIA has also continued its work with key stakeholders from Asia to Europe to the Americas to identify operational risks and potential improvements. This includes, responding to urgent events as they arise, such as our timely publication of resources related to Queen Elizabeth II's state funeral or Russia sanctions, as well as longstanding efforts like our annual Disaster Recovery Exercise that was held once again in 2022 and has taken place nearly every year since 2004.

Operations, E-Trading, and Reporting committees and working groups sponsored by FIA have also provided an important venue to explore industry issues and define best practices. These include structural changes to Eurex’s Order Transaction Reporting, vendor best practices for exchange risk management and change controls, and the development of a global trader and algo registrations database for global futures exchanges, among other efforts.

FIA has also continued to engage with industry stakeholders around the world on evolving operations processing. For instance, in APAC we have engaged with JPX since 2020 around the introduction of holiday derivatives trading. JPX holiday trading launched in September, and FIA continues to work with industry stakeholders on ongoing risk issues.

FIA also successfully engaged with Eurex to delay the business implementation and launch of the new Next Generation ETD products from summer 2022 to February 2023 due to concerns about industry readiness and to give firms additional time to develop, test and implement the necessary changes.  FIA together with Eurex produced a Eurex Next Generation ETD client communication Q&A to aid member communication to end clients.

FIA continues to showcase its leadership in the regulatory reporting space in Europe.  In October, FIA successfully advocated for the reporting of third-country non-equivalent futures and options to be reported using the ETD-logic under EMIR Article 9 reporting rules.  This change by ESMA, after many years of advocacy, significantly reduces the operational burden for members and improves the accuracy of reported data to regulators. 

Notable FIA work

Cross-Border

Cross-Border

FIA continued its significant advocacy efforts in response to the European Commission’s clearing review proposals and highlighted the financial, commercial, operational and risk impacts of market fragmentation and measures that could harm the competitiveness of EU clearing members. FIA has worked tirelessly during 2022 to try and inform policy decisions that support a market-driven approach to clearing services in the region. This included formal filings of comments to regulatory consultations, many meetings with EU regulators and policy makers as well as a series of in-person European forums in Frankfurt, Brussels, Paris and Milan.

FIA also continued to focus on UK regulatory developments now that the UK has left the EU and met regularly with UK regulators and policy makers as well as responding to the HM Treasury Future Regulatory Framework review, and Bank of England consultation on the tiering of third country CCPs under UK EMIR 2.2.

In Asia, the landmark Futures and Derivatives Law in China came into force in August. In addition to helping to shape the final legislation through cooperation with local authorities, FIA has offered educational and onboarding resources to help market participants better understand the impact. Also, our APAC staff participated in a UK-China Capital Markets Working Group Meeting in February to help further discussions on issues such as increased market connectivity, netting in the ETD space and the adoption of international standards.

FIA President and CEO Walt Lukken continues to serve on the China Securities Regulatory Commission (CSRC) International Advisory Council, which met in December to discuss the further development of China’s capital and derivatives markets. Lukken highlighted the importance of the new Futures and Derivatives Law and the legal and regulatory certainty it will bring global market participants.

FIA also published its first China close-out netting opinion at the end of 2022, which was made possible by the new Futures and Derivatives Law. This will improve the capital treatment of global clearing firms providing access to Chinese clients to off-shore CCPs and incentivize greater participation of Chinese firms in the global markets.

Notable FIA work

Sustainability

Sustainability

Over the last year, FIA has continued to work with regulators on the urgent issues of sustainable finance and the private-sector response to climate change.

This included substantive advocacy work in the EU around proposed changes to the EU Emissions Trading System, as well as a formal response to US regulators about climate-related financial risks.

FIA also continued its work as part of the Taskforce on Scaling Voluntary Carbon Markets, a private sector-led initiative working to scale an effective, efficient and functioning voluntary carbon market.

Notable FIA work

Digital Assets

Digital Assets

Early in 2022, FIA worked diligently to engage with US regulators after the FTX acquisition of LedgerX and subsequent proposal to the CFTC for a non-intermediated model for our markets. We were consistent in our message – that FIA supports innovation as long as it is responsible and fair, and does not create undue risk for customers, price discovery or market integrity.

In the wake of the FTX collapse in November, FIA continued its efforts to reinforce these core values. As FIA President and CEO Walt Lukken said in his public remarks at our Expo conference, just days after the FTX collapse, “FIA believes independent intermediaries should continue to play a vital role in our clearing system.”

Elsewhere in the world, FIA has continued to engage with regulators and our member firms. We have been active in the EU as the region finalized its landmark Markets in Crypto Assets regulation (MiCA), and we continue to work closely with stakeholders in other jurisdictions including the UK, Singapore, and elsewhere.

Notable FIA work

Diversity

Diversity

As the leading trade organization for the derivatives industry, FIA plays an important role in building the pipeline for the future leaders of our industry. We take seriously the issues of diversity, equity and inclusion across all areas of financial services, and have continued our work in these important areas throughout 2022.

Most notably, FIA put its words into action over the last year by naming Goldman Sachs’ Alicia Crighton our first female chair in history. FIA also signed on to the Black Talent Charter in the UK and joined the organization in its effort to increase the number of signatories from around 20 to 100 or more over the next three years. Additionally, we began hosting "rising star" networking events as part of our in-person events to provide opportunities for the next generation of talented individuals to make important connections and raise their profile in our industry.

FIA also continued its partnership with The Greenwood Project, a non-profit organization that is focused on introducing Black and Latinx students to careers within the financial industry via academic instruction, mentorships and paid summer internships in financial firms. We’ve also continued to highlight diversity issues in webinars, in-person conference programming and through our communications channels.

For more information, visit our Diversity & Inclusion initiative homepage.

Notable FIA Work

Community and Events

Community and Events

FIA offers a way for our member firms to connect and collaborate with other derivatives market participants, and to learn about the latest best practices and emerging industry trends. We facilitate gatherings for important stakeholders in our market through a regular schedule of in-person conferences, webinars and other platforms.

Just a few examples of the best-in-class forums that FIA provided in 2022 include:

  • At our IDX conference in London last June, LME CEO Matthew Chamberlain sat down with FIA's President and CEO Walt Lukken to publicly address issues around the suspension of trading in its nickel market.
  • FIA held regional forums in Houston, Brussels, Frankfurt, Paris and Milan to connect policy makers with our members and guide the discussion on commodity market issues like price controls and circuit breakers. At the Brussels Forum in September, Bruce Savage our Head of Europe interviewed John Berrigan, Director General, DG FISMA, European Commission and discussed the energy crisis, sustainability agenda and the status of the EU Clearing review.
  • At FIA Expo in Chicago, CFTC Chairman Russ Behnam gave his thoughts on the regulatory outlook for crypto markets just days after the collapse of FTX in November.

We also continued to offer a wide array of communications channels to connect digitally with our industry, including our MarketVoice Podcast and MarketVoice digital magazine. FIA also featured key staff from member firms in more than 20 webinars in 2022 on topics ranging from China's recently minted futures and derivatives law to the future of US crypto legislation to noteworthy enforcement trends.

Additionally, as in past years, FIA also held our seventh-annual Innovators Pavilion as part of our Expo conference as a way to highlight and support the next generation of innovative firms in our industry.

Events
MarketVoice
FIA Innovators

Notable FIA webinars in 2022, which are still available for members to review, include:

Products and Services

In support of our mission to promote better understanding of and greater transparency into the global derivatives markets, FIA publishes several types of statistics for our members. In 2022, FIA enhanced our data resources by launching the ETD Tracker. This new tool provides an interactive platform to explore volume and open interest trends across global futures and options markets.

Also in 2022, FIA launched our Exchange Risk Controls Repository. This central repository of exchange-provided risk controls and practices is maintained for the exclusive use of FIA members. In consultation with member firms, we developed a survey that helps provide greater transparency and facilitates risk-control benchmarking for global brokers, clearing firms, trading firms and commercial and institutional traders. This convenient centralized source of information about exchange risk controls makes it easier for firms to expand the range of markets that they use around the world.

Additionally, FIA continues to maintain and offer a range of industry standard legal opinions, guidance documents, template agreements and disclosures including the  updated FIA Terms of Business and FIA Indirect Clearing Terms. Also, the FIA CCP Risk Review, offers an online platform that summarizes rules and procedures at CCPs worldwide.

Data Products
Exchange Risk Controls
Documentation Library

Affiliates

FIA advocates for the cleared derivatives industry as a whole, but our affiliate organizations continue to do important work in specific areas. These include:

FIA European Principal Traders Association (FIA EPTA)

FIA European Principal Traders Association (FIA EPTA) represents more than 25 principal trading firms in the region on key issues such as automated trading, technology concerns and market fragmentation.
 

FIA Principal Traders Group (FIA PTG)

The FIA Principal Traders Group (FIA PTG) is an association of firms that trade their own capital on exchanges worldwide. Detailed descriptions and links to FIA PTG's work are contained in its mid-year and annual reports found here.
 

Futures Industry Association Japan (FIA Japan)

Futures Industry Association Japan (FIA Japan) has around 60 members across the region's derivatives industry, and focuses on both financial and commodity markets.
 

The Institute for Financial Markets (IFM)

The Institute for Financial Markets (IFM), founded in 1989, is a nonprofit educational foundation that aims to increase public awareness and understanding of the importance of financial and derivatives markets. The Institute engages clients in activities such as workshops, conferences, course dissemination, course development and research.
 

About

FIA is the leading global trade organization for the futures, options and centrally cleared derivatives markets, with offices in Brussels, London, Singapore and Washington, D.C. Our membership includes clearing firms, exchanges, clearinghouses, trading firms and commodities specialists from about 50 countries as well as technology vendors, law firms and other professional service providers.

Learn more about FIA | Full list of member firms