A Joint Publication from FIA Research and SIFMA Insights

Recently, the Futures Industry Association (FIA) and the SIFMA Asset Management Group (AMG) hosted their annual Asset Management Derivatives Forum. Six themes stood out at this year’s conference:

• Innovation and Growth: Areas of rapid growth in the derivatives markets included the basis trade between Treasury futures and securities, futurization of equity swaps, and zero-day-to-expiry options on equity indices.
• Artificial Intelligence: Google Cloud shared current AI use cases and expectations for new cases in operations, marketing, and investments. Top governance challenges noted were data, hallucinations, and explainability.
• Treasury Clearing: The SEC’s mandated central clearing for a large proportion of US Treasury and repo markets was a hot topic, as it will impact Treasury futures markets and the use of Treasuries as collateral.
• Insights on Regulation: Officials from the Fed, SEC, and CFTC discussed current rulemakings, and several speakers from the private sector shared their concerns about the potential impacts on liquidity and innovation.
• Clearing Capacity: A top concern is the limited number of banks willing to offer derivatives clearing services, and proposed increases to bank capital requirements will make an already difficult situation worse.
• Operational Efficiency: Several panels discussed ways the industry can tackle the need for greater standardization and increased automation in the post-trade process for exchange-traded derivatives.

Authors

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

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