In a new report, the Futures Industry Association (FIA) is calling on the futures and options industry to work together to improve the efficiency of the trading and clearing process for exchange-traded derivatives.
The report, called Modernizing the Listed Derivatives Workflow: A Blueprint for Change, establishes a framework for building consensus and collaboration among all industry segments, including clearing firms, executing brokers, exchanges, clearinghouses, customers, and technology vendors.
“When Covid abruptly shut down the world economy in March 2020, the global futures and options markets experienced record trading activity and extreme volatility,” Walt Lukken, FIA president and CEO, said. “This period of stress exposed several long-standing bottlenecks in the trading and clearing infrastructure that cause costly delays in the processing of trades.”
Specifically, the report recommends that the industry forms an independent standards body with a governance structure that represents a broad cross-section of industry stakeholders. Deliberations should be open and transparent to the marketplace, the report said. The report also recommends developing a consensus agenda supported by the industry that will provide a foundation for greater standardization.
“FIA embarked on this open standards initiative to understand how we can make the ecosystem for trading and clearing more efficient through the adoption of standards and best practices. Today’s Blueprint gives us a pathway for success, but more work needs to be done. FIA looks forward to beginning that dialogue and education with our industry,” Lukken added.
FIA will work with its Taskforce and other market stakeholders in the coming weeks and months to consider the report’s recommendations.