FCA chief: Looking forward is important for derivatives market

20 September 2013 at 16:57

FCA chief: Looking forward is important for derivatives marketThe chief executive of the Financial Conduct Authority (FCA) has noted it is important that the international derivatives market continues to look forward.

Speaking at the International Swaps and Derivatives Association conference in London, Martin Wheatley explained the theme of the gathering - Future Comes into Focus - is very apt. He noted this is because it encourages the industry to keep looking ahead and to move forward following the recent general reshaping of the market.

According to Mr Wheatley, optimism should be high that broad foundations have now been laid that will enable positive growth in the future.

In addition, efforts have also centred on making progress in bringing down network risk, while governance has also been improved. It was noted that new rules are being brought into play in the world's largest derivatives markets - the European Union and the US. 

Mr Wheatley stated: "To a large extent the course is locked in. We have agreed the big objectives - less risk, more transparency, better conduct - and we're seeing them stress-tested by the markets in what is now the business end of the reform process."

He explained the derivatives market is at a critical moment of transition at the moment, describing it as a time when "sleeves are rolled up and details attended to so global priorities can be faithfully translated into the markets". 

A number of issues that are being focused on at present were highlighted as being among the most important that the derivatives industry is having to contend with. 

These include the cross-border application of derivatives rules and the implementation of new requirements for the collateralisation of bilateral derivatives.

Additionally, emphasis is also being placed on preparation for the current batch of requirements with regard to European Market Infrastructure Regulations and resolving issues related to benchmarks.

Mr Wheatley said these issues are of such importance that how they are handled will play a part in determining how well the industry has responded to the economic crisis.

Posted by Claire RobinADNFCR-3006-ID-801640306-ADNFCR

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