Bruce Savage joined FIA in August 2019 as head of Europe with responsibility for leading its European operations, overseeing FIA's European Regional Advisory Board and relationships with members, and managing FIA’s advocacy priorities with UK and European regulators and supervisory authorities. With more than 25 years of experience in the cleared derivatives industry, including senior product, regulatory affairs and market structure roles at Deutsche Bank, he knows first-hand the challenges faced by member firms.
MarketVoice sat down with Bruce to discuss FIA's work, how he's connecting with members and regulators during the coronavirus pandemic and his priorities for the rest of the year.
Bruce Savage: FIA’s mission is to support open, transparent and competitive markets, protect and enhance the integrity of the financial system and promote high standards of professional conduct. Our priorities for FIA's members are driven around this. While we have a heavy advocacy agenda in place this year, COVID-19 has become an immediate priority in terms of communicating with members to discuss critical issues and engaging with regulators to ensure we keep our markets open and functioning properly.
Although COVID-19 has taken over the agenda for the industry, we are still working hard on our longer-term advocacy efforts. There is a big focus this year on the MiFID II review and we are responding to a series of ESMA and European Commission consultations. We have several EU advocacy workstreams in place, with work ranging from drafting responses to various consultations, to developing an industry-standard RFP template that will meet a number of FRANDT (fair, reasonable, non-discriminatory and transparent commercial terms for clearing services) objectives, working on a whitepaper on the impact of sustainable finance on derivatives markets, and highlighting bank capital issues that negatively impact clearing, among many other initiatives. The work that was a priority before the crisis continues to be important and a focus for the teams here.
MarketVoice: Can you talk a bit more about FIA's engagement with regulators regarding the impact of COVID-19 on the derivatives industry?
Bruce Savage: Since the outbreak, FIA has stepped up its dialogue with regulators and policy makers globally. Over the past month we have hosted calls with senior regulators from the FCA, BaFin, AMF, CFTC, ESMA and the Bank of England to discuss COVID-19, with a focus on regulatory coordination, forbearance and relief measures to reduce the burden on market participants, as well as provide industry updates on operational and compliance challenges. Both regulators and members have appreciated this open dialogue.
FIA, in partnership with other trade associations, has also sent letters to regulators and government authorities to emphasise the importance of keeping markets open and to ensure shelter-in-place flexibility for key financial services workers. We have also requested deadline extensions for a range of consultations, including the European Commission’s consultation on the MiFIR review and various ESMA consultations. In other areas, we have issued a public statement warning against the imposition of short-selling bans and the negative impact to market liquidity and price formation of affected products.
MarketVoice: What measures is FIA taking to keep members informed of issues relating to the COVID-19 situation?
Bruce Savage: FIA was one of the first trade associations to set up a dedicated COVID-19 webpage, providing daily operational and regulatory updates from exchanges, CCPs and supervisory authorities globally. During the peak of market volatility in March, FIA's operations committees met every other day with operations leads from member firms to discuss critical issues, escalate contacts for trade-breaks and contact CCPs to request extensions of post-trade clearing and admin windows.
Over the coming months, FIA and its various committees will be working with members to focus on the lessons learned during these last several weeks to make sure our markets remain safe and efficient in the event of future disruptions. We will also continue to assess the most effective ways to remain engaged with our members and industry and plan to expand our offering of webinars and virtual events.
MarketVoice: What other items are on your agenda for the rest of the year?
Bruce Savage: COVID-19 will continue to be a focus for us, particularly the lessons learned from the crisis. Cleared derivatives exchanges and CCPs performed well, as noted by regulators, but there were some challenges with post-trade allocations, and implications for margin and funding, and these are some of the areas that our operations committees will be looking at in more detail.
From an advocacy perspective, while FIA welcomed extensions from regulators, the MiFID II consultations continue to be a priority for us. At the same time, the Brexit clock is ticking. The transition period is still scheduled to end on 31 December 2020 and there is the potential for a cliff-edge Brexit scenario as early as the end of September if there is no legal certainty regarding UK equivalence and recognition for UK CCPs. This could have a serious impact on market access, in addition to operational, financial and commercial consequences for members and their clients, so this is still a key area of focus for us with UK and EU regulators. We are also waiting for the European Commission to publish the proposed EMIR 2.2 delegated acts on tiering and comparable compliance for systemically important third country CCPs after FIA responded to the ESMA consultation last year and made some important recommendations.
One of the most rewarding dimensions of my job is engaging with our diverse membership, talking about FIA priorities and listening to theirs. Although we are currently in lockdown, this engagement continues to be very important to me. All of our committees continue to meet regularly, as scheduled, with the benefit of technology, as does the European Regional Advisory Board and the FIA Board.
MarketVoice: You joined FIA as head of Europe in August last year. How has your industry experience helped prepare you for this role?
Bruce Savage: I have worked in this industry for more than 25 years. I began my career at LIFFE in the Market Supervision department, which investigated potential regulatory and rule breaches by traders and brokers on the open outcry floor. I then worked for 21 years in Deutsche Bank’s listed derivatives and clearing business in a variety of senior front office roles, most recently as the global head of regulatory affairs and market structure.
I held this role during the implementations of EMIR, MiFID II and Brexit and my work included briefing clients on the implications of the regulations, managing the internal rollout within the bank and working with FIA to engage with regulators on behalf of EU firms. I was also a member of FIA's European Regional Advisory Board for four years before becoming a member of the Board of Directors representing Deutsche Bank. Working at FIA was the natural next step for me, and I am delighted to be here working with such a great team and thoroughly enjoying it -- even in lockdown.
