FIA, FIA PTG, and FIA EPTA members are working to educate the public on the benefits of automated trading, provide policymakers with expert feedback on regulatory proposals, and promote best practices in risk controls.
Regulators across the globe have been focused on ensuring that systemically important benchmarks used in global markets are robust and subject to scrutiny. FIA has been monitoring and commenting on recommendations and proposals emerging from IOSCO down to national and regional authorities in Europe and the U.S.
FIA has compiled a variety of resources that may be of interest to industry members as the United Kingdom (U.K.) has voted in favour of leaving the European Union. This page will be updated regularly; please check back for additional information.
New capital requirements for banking organizations have significant impacts on the ability of banks to provide clearing services for their customers. FIA is working with member firms and other industry groups to educate regulators on the risk-reducing effects of clearing and preserve a strong and diverse community of clearing firms.
One of the core tenets of the Group of 20 financial reforms was that central counterparty clearing should be adopted to help reduce the risks of derivatives markets. FIA is monitoring new regulations affecting CCPs and providing information on CCP rulebooks, default procedures and financial resources.
Oversight of today’s global markets requires international coordination to maximize efficiency. FIA advocates for commonsense practices in cross border oversight that provide safeguards while allowing for competition and innovation.
Enhancing the protection of customer funds and assets has been a focus of the regulatory agenda post-crisis and the high-profile collapse of a small number of clearing firms. FIA has been helping the industry to meet new regulatory requirements to provide improved segregation of customer funds.
The financial services sector and the critical infrastructure it supports is an attractive target for hackers and cyber-criminals. No one is immune to these attacks, and the threats themselves are continually evolving, becoming more targeted, complex, and dangerous. FIA has made cybersecurity a priority, inviting world-renowned experts to speak at our conferences, sharing cybersecurity resources with our membership, engaging with regulators, and hosting webinars with cyber experts. Working together, we can minimize the risk of cyber attacks.
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 establishes a new regulatory framework for derivatives and greatly expanded the authority of the Commodity Futures Trading Commission. FIA actively monitored the development of this legislation and the subsequent implementation through regulation.
The European regulation on OTC derivatives, central counterparties (CCPs) and trade repositories (TRs) – European Markets Infrastructure Regulation (EMIR) - came into force on 16 August 2012. Designed to improve transparency and reduce the risks associated with derivatives markets, EMIR also establishes common organisational, conduct of business and prudential standards for CCPs and trade repositories. EMIR imposes requirements on all types and sizes of entities that enter into any form of derivative contract, including those not involved in financial services. It applies indirectly to non-EU firms trading with EU firms.
Among the topics addressed by FIA in the area of execution, are best execution requirements, which feature in MiFID II, payment for order flow, under FCA rules, and other trading and execution obligations across global jurisdictions.
The European Market Abuse Directive (MAD) and Market Abuse Regulation (MAR) are designed to reduce instances of market abuse, guarantee the integrity of financial markets and increase investor confidence. FIA has worked with members to respond to a number of consultation papers from regulators. The new MAR will apply to a wider range of securities and derivatives. It will cover financial instruments admitted to trading on other trading platforms (MTF and OTF) and related financial instruments. Commodity derivatives and carbon emission allowances will be covered more comprehensively.
The recast Markets in Financial Instruments Directive (MiFID II) and Markets in Financial Instruments Regulation (MiFIR) are the European Commission’s attempt to reform the capital markets, following the effects of the financial crisis, as well as to update the original MiFID, published in 2007, to take account of new features in the marketplace, such as fragmentation, increasing use of algorithms and the predominance of high frequency trading, and the rise of dark pools. MiFID II and MiFIR come into effect on 3 January 2018. FIA has a number of working groups and committees addressing the key aspects of MiFID II as they relate to listed and cleared derivatives - both within EU states, as well as the impact on third-country firms outside of the region.
The Commodity Futures Trading Commission has developed new "Ownership and Control Reporting" requirements in order to gather more information about the swap markets. FIA is providing members with updates on the new requirements and its technology affiliate, FIA Tech, is developing a data service to help the industry comply with the requirements.
Regulators in the U.S. and Europe are currently considering whether changes are needed in the regulatory regime that governs the application of speculative position limits to the commodity futures and swaps markets. To help members and the public understand public policy in this area, FIA has compiled resources on position limits, including statements, testimony, position papers and current rules.
FIA is working with market participants to provide the Commodity Futures Trading Commission with a clear understanding of the role clearing firms play in the new environment for swap trading. FIA is focusing in particular on the challenges of implementing the required pre-trade risk checks under Rule 1.73.
A key aspect of European market reform has been the introduction of regulatory reporting requirements for OTC and ETD derivatives. These fall under the EMIR regulation, but also feature in MiFID II and the European energy market regulation, REMIT.