Thank you to everyone who joined us for Boca 2023. Details about next year's conference will be available soon. In the meantime, please enjoy this recap of all the highlights from this year's event.
Convergence of Surveillance & Trade Controls
As regulators globally take more comprehensive approaches to combat market disruption,
institutions will need to address markets with fewer boundaries between trade controls and surveillance. As a result, flexibility in a surveillance system is an operational requirement. Learn more.
CFTC Chairman Rostin Behnam sat down with FIA President and CEO Walt Lukken to discuss his priorities for the agency. Behnam noted the derivatives industry is in "construction mode" as it works to address issues ranging from climate change to cyber risk and cryptoassets. "We are building and re-building at an ambitious scale towards a modern futures ecosystem that addresses real-world problems with enhanced regulatory oversight," Behnam said during his keynote address. "This entails sound and resilient structures, informed by recent lessons learned and mindful of future challenges." Read Chairman Behnam's full keynote address.
FIA president and CEO Walt Lukken told FIA's Boca conference that the cyberattack on Ion Markets has sparked an effort to strengthen the derivatives markets' business continuity procedures, though it was "too soon to recommend specific actions." "Just as past disruptions have sharpened our focus, I'm confident we will identify new ways to reinforce the resilience of our markets and learn from this event," Lukken said. Read Lukken's opening remarks from the conference.
Convergence of Surveillance & Trade Controls As regulators globally take more comprehensive approaches to combat market disruption,
institutions will need to address markets with fewer boundaries between trade controls and surveillance. As a result, flexibility in a surveillance system is an operational requirement. Learn more.
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The Sound of Boca
The Modern Money SmartPod made the road trip to Boca to provide quick, 10-minute daily recaps of each day's news. Use the links below to hear exclusive interviews with newsmakers and all the highlights from each day.
The cryptoasset market was a key topic of discussion at the 2022 edition of FIA Boca, but the rapid shift in the sector's momentum since the end of last year has seen a different tone emerge about how it will interact with the mainstream market in future, 2023 Boca participants say. "They're not dead, I see them -- some are coming more in our direction," said Gerry Corcoran, CEO of RJ O'Brien. "They're looking to play by our rules now, rather than disintermediate."
Nine executives from leading global derivatives exchanges shared the stage in Boca for a lively discussion that touched on the recent cyber disruption in derivatives markets, opportunities created by the re-opening of China's economy, the global regulatory outlook, innovations in financial technology, the collapse of FTX, and much more.
CME Group had been considering closing its main Aurora, Illinois, data center as part of the cloud services deal with Google, but Chicago-based prop traders don't want to make the change and raised their concerns at a meeting with CME chair and CEO Terry Duffy at FIA Boca. Later, Duffy said CME had not decided on the move yet and that "the last thing I'm going to do is disrupt markets."
In a panel discussion about cyber resilience, key stakeholders from across the derivatives industry agreed on the importance of vigilance and communication to protect global derivatives markets. Don Byron, FIA's head of global industry operations and execution, kicked off the discussion by framing the recent Ion cyber incident not so much as a wake-up call as much "as a reminder of what's at stake, and the importance of being vigilant."
A panel discussion at FIA Boca discussed the major events that have affected the derivatives markets during the past year, including the Silicon Valley Bank failure, FTX's bankruptcy, LME's nickel crisis, the Ion cyberattack, the EU gas price cap, and the Ukraine war. One theme that emerged pointed to the risks involved in relying on a small number of third-party providers for outsourcing critical infrastructure, including the cloud.
The voluntary carbon market is seeing some potential participants like US farmers holding off due to concerns over the market's quality and integrity, prompting experts at FIA Boca to call for better transparency standards. London Metal Exchange head of market development Robin Martin noted that the metals trading market relies heavily on tight standards to ensure the quality of the products traded.
Nasdaq executive VP for marketplace technology Roland Chai said that using margins models based on value-at-risk is "a very bad choice" for energy and other physically constrained markets. Chai also questioned the use of daily variation margining by clearinghouses, noting that "the long holder has to pass VM to the short holder, the next day, it's back again."
US Commodity Futures Trading Commission chair Rostin Behnam told reporters at FIA's annual Boca Conference that he does not expect the US Congress to act "over the next few years" on legislation to clarify which regulatory agency has jurisdiction of cryptocurrency markets. Behnam also said that after the Ion hack, he believes that Congress' reauthorization of the CFTC "must consider what role the CFTC should have with respect to entities who provide services to registered entities, and, perhaps more broadly, to our markets."
US Commodity Futures Trading Commission Chair Rostin Behnam told reporters at FIA's annual Boca conference that the regulator is assessing the surge in zero-day options trading strategies to determine the potential systemic risks, such as magnifying drastic market swings. "I don't want to prejudge it, but it's clearly on our radar," said Behnam.
FIA has announced the induction of 12 new members to the FIA Hall of Fame. The new members will be honoured at an awards ceremony during FIA's annual International Futures Industry Conference in Boca Raton, FL on 15 March. This year's class includes Thomas Cashman, John Davidson, Gary DeWaal, Dan Driscoll, Scott Early, Gedon Hertshten, Nick Carew Hunt, John O'Brien Sr., James Oliff, Elizabeth Sam, Caroline Silver and Rosalyn Wilton. Learn more about our 2023 FIA Hall of Fame honourees.
