FIA marked the 50th Boca conference and its own 70th anniversary of serving the futures industry with an unforgettable experience for attendees. As we seek to make sense of the new world order, what were the key takeaways from this landmark event?
Geopolitics:
As FIA President and CEO Walt Lukken predicted in a curtain-raiser interview the week before Boca, a key theme of this year’s conference was “Trump, Trump, Trump!” It wasn’t so much Trump himself, however (though, he did make a surprise appearance – see below), that was the topic of conversation, but more his chaotic sowing of uncertainty.
Even before the conference itself, a survey carried out by Crisil Coalition Greenwich in partnership with FIA found that the political environment was driving trading activity. Some 80% of respondents named political and geopolitical conflict as the most likely factor to generate growth in derivatives over the next two years.
Speaking in a fireside chat with NBC senior business correspondent Christine Romans, Citigroup chair John Dugan focused on the “uncertainty” of the current environment. The business climate is a lot more cautious given the impact of tariffs, he said. Yet it would not be possible to dismantle global trade.
Similarly, mergers and acquisitions activity is on pause. “We were more optimistic before the year started,” Dugan said. Again, it is the uncertainty that is driving the caution. “It is less about what they decide, more about them reaching a decision.”
And while uncertainty drives volatility, which in turns drives trading activity, there is a limit. “Volatility is good until it gets really extreme,” Dugan stated.
Exchange leaders also described the impact of the geopolitical environment on markets. SGX’s CEO Loh Boon Chye said that geopolitics was a catalyst for volume growth across a range of asset classes, including freight, commodities and currencies.
Derivatives markets have responded efficiently to this uncertainty and priced in risk, said Stephane Boujnah, CEO and chair of Euronext.
Boujnah also took the opportunity to debunk the Trumpian claim that the European Union was created to damage the US, receiving a round of applause in the process.
“That is wrong,” he asserted. The aim of the EU was to deliver a ‘never again,’ that Europe never wanted a repeat of the 1930s and the war that followed. “What is at stake,” he said, “is much bigger than the bond market.” Yes, the European Union is time consuming and complicated, but the objective was the same as the US federal system, he said.
(De)regulation
Closely related to the geopolitical climate, of course, were the discussions on regulation – and in particular a need to rebalance or reassess the effectiveness of post-crisis regulatory developments.
In his opening remarks, Lukken pointed out that part of the new US administration’s agenda includes a review of government efficiency and cutting bureaucratic waste.
“I would not be surprised if the administration looked at whether the SEC and CFTC should merge.” While admitting some scepticism, Lukken asked, “Could a new agency with a principles-based approach bring together the benefits of both agencies? Or would we simply be creating a larger ‘one-size-fits-none’ bureaucracy?”
Certainly, a number of speakers endorsed some form of regulatory reform. In her fireside chat with Lukken, Nasdaq Chair and CEO Adena Friedman stated, “We need to revisit the purpose of regulation.” In particular, she said that the cost of regulation and compliance needs to come down and cited the introduction of the EU’s Savings and Investment Union as a tool to improve competitiveness in that market.
Trabue Bland, senior vice president for futures markets at Intercontinental Exchange, echoed this view on The Future of Markets panel. “A pause in regulations is good, after 12 to 14 years of regulations piling on.”
Meanwhile, Citigroup’s Dugan said, “We are at an inflection point.” Post-financial crisis, the pendulum of regulation swung too far; now, with a new administration it is time for the pendulum to swing back to the centre, he said.
“We need to get this balance right between regulation and supporting the economy. I don't think we're in quite the right place now, but I think we'll be going down that path,” Dugan said.
The question, then, is what is the right balance? As outgoing CFTC Commissioner Christy Goldsmith Romero pointed out, sometimes the regulation pendulum whipsaws too much. “It’s a difficult calibration to get right,” she said.
Other regulators on her panel agreed on a need for review. French regulator Patrice Aguesse also mentioned the Savings and Investments Union as an example of that review process, along with reviews of MiFIR and EMIR “to consider what can be simplified. It is not a question of deregulation, but of simplification.”
For the Bank of England, Sasha Mills, executive director of financial market infrastructure, said the prudential regulator’s primary objective is financial stability, the second is innovation. So, regulation must deliver the first, while enabling the latter.
In a keynote address on the opening day of the conference, International Organisation of Securities Commissions (IOSCO) Secretary General Rodrigo Buenaventura conceded that some of the regulations designed to protect markets post-2008 have caused tensions in liquidity in some market segments.
What the market needs is “proper protection for extreme but plausible scenarios,” he said. He flagged the work international standard setters have done on margin transparency in recognition of market concerns.
24/7 – 24/5
While these regulatory discussions echoed around the Boca resort, Don Wilson, founder and CEO of proprietary trading firm DRW and newly inducted into the FIA Hall of Fame, said that 24/7 trading was the number one theme of the conference.
The topic certainly featured across several panel and fireside chat discussions. With Nasdaq having just announced the introduction of 24/5 trading in US stocks, Friedman told FIA’s Lukken the exchange was engaging with the industry on how best to get the right model.
The reality in today’s market is more 24/5 than 24/7, but a few speakers flagged concerns about how to manage these extended hours, whether it was risk management, cost or the operational practicalities of managing markets on a 24-hour basis. Goldman Sachs co-head of global futures, and FIA chair, Alicia Crighton pointed out that the industry still hasn’t succeeded in fixing the problem of holiday processing.
Speaking on the Changing Face of Clearing panel, Citadel’s managing director and global head of government and regulatory policy Stephen Berger acknowledged that while demand exists for 24/7, “and it will happen,” we need the right foundation to manage it. “The appetite is ahead of the foundations to support it,” he said.
On the same panel, Mark Bortnik, managing director and global head of futures and OTC clearing at Morgan Stanley, added that there needs to be a broad consideration of the risk management aspects of 24/7 trading. For example, “If we were to default someone, how do we default them in a 24/7 cycle?”
CME’s chief operating officer and global head of clearing Suzanne Sprague agreed with the need to consider risk management implications, adding that the payments element also needs addressing. There is demand for 24/7 trading, she added, but not in all markets.
From the trading community’s point of view, 24/7 “is coming no matter what,” said Jump Trading president and chief investment officer Dave Olsen. His firm is hiring people with a view to that development, he explained.
Technology
Technology has clearly accelerated and enabled 24-hour trading. And technology was a key buzz topic for the conference as listed by FIA’s Lukken in his opening remarks. As he pointed out, technology has enabled access to markets to a new generation of investors, challenging the ways of traditional finance and simplifying market structure. This has the potential to revolutionise various segments of the markets, including 24/7 trading and the expansion of retail activity.
Tokenisation was seen as a key enabler of 24/7 trading. With cash and collateral flows currently tied to banking system hours, causing problems during holidays and weekends, tokenisation of assets used in collateral management has the potential to remove this friction in the process.
This potential was emphasised by Nadine Chakar, managing director and global head of digital assets at DTCC, during a panel discussion on technology trends. In addition, Coinbase referenced its plans to allow the use of stablecoin as collateral for trading during its sponsored breakfast on Wednesday morning.
While crypto was not explicitly on the program, the number of crypto-related data providers, trading platforms and other service providers attending the conference continues to grow. And Boca continues to see increasing participation from other areas of the technology space, with half of all sponsors and exhibitors from the sector, including platinum sponsorships from Google Cloud and Microsoft, as well as the more familiar service provider Trading Technologies.
This year’s conference also had a strong retail broker element in attendance, including NinjaTrader, Plus500, Robinhood, Topstep, TradeStation Securities and Webull Financial. This reflects the strong growth of retail participation in options, futures, crypto and prediction markets.
On the latter topic, three prediction markets operators attended – Polymarket, Kalshi and ForecastX. Coming full circle, this is indicative of a potential regulatory shift in the US with a more tolerant/sympathetic view towards these products from the new administration.
Anniversaries, legends and happiness
Finally, and despite the uncertain geopolitical and economic environment, the overall atmosphere for this year’s conference reflected the momentous occasion of this being FIA’s 50th International Futures Industry Conference – a.k.a. Boca.
To mark the event, FIA added special touches to the programme, including the ringing of the opening bell of the New York Stock Exchange live from Boca; the return of the magicians and the beach towels (if you know, you know); and the return of the Boca Late Night band.
This year, Rock & Roll Hall of Famers Cheap Trick entertained a packed Grand Ballroom with an hour-plus of their greatest hits to the delight of the audience (at least those of a certain age).
FIA’s Hall of Fame also reflected the anniversary with an impressive group of inductees: the late Mark Bagan, Laura Cha, Terry Duffy, Jeff Sprecher, Debbie Stabenow and Don Wilson. Bagan’s daughter and son offered a deeply moving tribute and Cha and Stabenow gave thanks via video, while the other three inductees invited individuals for introductions.
Yuval Rooz, CEO of Digital Asset, gave a tribute to Don Wilson; Vinnie Viola, founder of Virtu Financial, spoke fondly of his friend Terry Duffy; and Kelly Loeffler, the head of the US Small Business Administration, played the Trump card by getting her ‘boss,’ the US President, to provide some remarks via video about her husband, Jeff Sprecher.
Other highlights included the keynote from author and academic Arthur Brooks about ‘how to be happy in an unhappy world.’
Brooks pointed out that while money does not intrinsically make you happy, nor do material things, you can ‘buy’ happiness by spending money on experiences to create memories, on helping others, on donating to causes and beliefs you hold dear or by paying others to do things for you and therefore giving you time.
In his fireside chat with NYSE Group President Lynn Martin, Virtu Financial founder Vinnie Viola echoed these sentiments. “You can’t define everything in terms of money,” he said sitting by the legendary Stanley Cup, won by his ice hockey team the Florida Panthers.
Instead of his key career achievements, he reflected on the power of experiences and memories, recounting his first sporting event – thanks to winning tickets to a New York Yankees game as a small boy in 1962 – accompanied by his father.
This was a Boca to remember, thanks to great sessions and speakers, fun and fruitful networking and amazing experiences brought about by the FIA team – adding many moments to everybody’s memory banks of happiness.
