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FIA Midyear Advocacy Update 2022

Date 14/07/2022

In 2022, global derivatives markets are plotting yet another record year based on the first several months of trading volume. However, our markets continue to prove resilient amid disruptions caused by the ongoing war in Ukraine and uncertainty caused by macroeconomic trends including inflation and rising interest rates around the world.

 

FIA's advocacy priorities for 2022 have evolved to acknowledge the current market environment, including a focus on commodity market volatility and Russia-related sanctions as well as recent innovative proposals in digital asset markets. However, we remain committed to familiar long-term priorities including CCP resiliency, the sustainable finance transition and the risks of cross-border regulatory fragmentation.

Here's a brief recap of FIA's public policy and advocacy work across the first half of 2022:

Post-Brexit Clearing and Market Reform Issues

In February, the European Commission extended equivalence for UK central counterparties through June 2025. FIA worked tirelessly across the first part of the year to help achieve this decision, and remains focused on post-Brexit issues including the U.K.'s EMIR 2.2 tiering process and the Wholesale Markets Review while also keeping a close eye on the EU’s MiFID review work. In addition, FIA focused its efforts on other third-country equivalence decisions by the European Commission and remained in close contact with ESMA reminding of the timely needed third-country CCP recognitions under EMIR Art 25 to avoid punitive capital requirements for EU clearing members.

Key work and filings in this area includes:


Digital Assets

A proposal set forth by FTX US to offer a non-intermediated clearing model has been a hot topic of conversation among both crypto market participants as well as traditional derivatives market participants. The FTX proposal has global implications on both regulation as well as the future of technology and market infrastructure – and as a result, in 2022 FIA redoubled its efforts in the digital assets arena.

Key work and filings in this area includes:


China Futures Law

Across 2021, FIA submitted extensive comments on China's historic Futures and Derivatives Law – including on both its first and second draft reading. FIA continued its advocacy work in the region across 2022, and was proud to support the formal passage of the law in April. Since then, our Singapore-based staff has been hard at work with outreach and education in the region to explain the implications of this landmark legislation.

A recent and representative example of this work includes:


Sustainability and Commodities  

Commodity markets have been incredibly volatile in 2022 thanks to several factors including the war in Ukraine, macroeconomic pressures including supply disruptions and inflation, and the long-term impacts of climate change and global transition to a low-carbon economy. As a result, FIA's advocacy team has worked to address both short-term issues including the impact of Russian sanctions as well as long-term issues like the development of sustainable finance regulation in Europe.

Key work in these areas includes:

 

Clearing and related issues

As always, FIA remains committed to resilience, transparency and responsible innovation in global cleared derivatives markets. To that end, we have continued our work on issues including CCP recovery and resolution, margin procyclicality, customer protections, and other foundational issues that are vital to the long-term resilience of our markets.

Key work in this area includes:

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