Perspectives and Key Themes from Market Participants

Recently, the Futures Industry Association (FIA) and the SIFMA Asset Management Group (AMG) hosted their annual Asset Management Derivatives Forum. The view of the industry is one of positive momentum for the business, but negative sentiment on the regulatory environment. This note recaps some of the main themes of the conference, including:

• Cyber – A recent ransomware attack on an important technology provider reminded market participants of the very clear and present risk to the industry given the interconnectedness of market participants.
• Margin – The goldilocks problem continues to weigh on the industry – finding the balance of too little margin (could increase industry risks) vs. too much margin (increases costs, stops trades/hedges).
• Operations – Reassessing the entire workflow around the trading and clearing of derivatives, looking for ways to make the process more efficient, as well as achieve greater standardization across the industry.
• Regulations – Costs and complexities of compliance are major concerns for the industry: substantial increase in new SEC rulemakings; constraints on clearing created by bank capital requirements.
• New products and technologies – Blockchain technology and ESG investing have been top of mind over the past few years. Many are wondering what role they will play going forward given recent controversies.

 

Authors

SIFMA Insights
Katie Kolchin, CFA
Managing Director, Head of Research

FIA
Will Ackorth
Senior Vice President of Publications, Data & Research