FIA Maps Out Smarter Regs, Healthier Markets

Washington, D.C.—Today, FIA released a detailed whitepaper containing recommendations for improving the U.S. regulatory framework while enhancing the safety and stability of cleared derivatives markets.

The recommendations build on FIA’s current advocacy work and follow the principles set forth in a letter FIA sent to policymakers in January calling for a comprehensive review of all U.S. financial reform regulation.

“One of the core functions of derivatives markets is to provide safe and efficient tools for businesses to manage price risk,” said Walt Lukken, president and CEO of FIA.  “FIA fully supports the goals of the G20 nations post-crisis to make the derivatives markets safer.  However, the cumulative impact of these rules is making it more difficult for market participants to access the markets and tools they need to manage risk. Our recommendations for a smarter and simpler regulatory framework promote growth and access while ensuring the safety and stability of our markets.”

FIA’s policy recommendations were developed with input and feedback from a wide variety of market participants and follow a principles-based framework of smart regulation, globally accessible markets, and prioritizing innovation and competition. The recommendations fall into seven broad categories:

1. Eliminate the leverage ratio’s punitive impact on clearing
2. Modernize the regulatory toolbox
3. Improve end-user access to risk transfer markets
4. Simplify reporting rules
5. Avoid fragmentation of markets
6. Make regulation efficient, effective, and appropriately tailored
7. Avoid regulation by enforcement

“These recommendations are critical to the continued health and growth of our markets,” Lukken said.  “We look forward to engaging with policymakers on how to reform the regulatory structure so as to revitalize our markets for end-users.”

The full paper is available here.

FIA is the leading global trade organization for the futures, options and centrally cleared derivatives markets, with offices in London, Singapore and Washington, D.C. FIA’s membership includes clearing firms, exchanges, clearinghouses, trading firms and commodities specialists from more than 48 countries as well as technology vendors, lawyers and other professionals serving the industry. 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. As the principal members of derivatives clearinghouses worldwide, FIA’s member firms play a critical role in the reduction of systemic risk in global financial markets.

For more information, contact Heather Vaughan at +1 202.466.5460.