This is the 40th anniversary of the FIA Boca conference, and befitting such a nice round number, it was also the most highly attended ever, with somewhere around 1130 attendees. This year, pins were given out to those participants who had been attending the conference for 5, 10, and 20 years.
Other highlights for the FIA this year include a newly designed web site at FIA.org, and a newly branded magazine: Futures Industry Magazine, which will now be called “Marketvoice.” The magazine and website now have expanded features, a global reach, and a digital platform, Walt Lukken, the FIA CEO and president, told the crowd.
Earlier, the Singapore Exchange (SGX) celebrated several of their own anniversaries at a press conference and lunch. The nation of Singapore itself celebrates its own 50th anniversary this year (officially Aug. 9). SGX’s Simex, celebrates 30 years and its Sicom rubber contract turns 20. Singapore is a triple A rate nation and has become a hub for IP rights in Asia.
The exchange just announced plans to add new Asian currency futures to its suite of FX contracts, on the Taiwanese dollar (TWD/USD) and Renminbi crosses (SGD/CNH, CNY/SGD, EUR, CNH). They expect the launch in Q3 2015. The move goes along with G20 regulatory reforms in OTC derivatives encouraging trading on electronic platforms and exchanges. SGX’s Asian FX futures have grown over the past year to reach US $37 billion in notional value since launch.
Because the notional value of the derivatives market in Asia is only 1/10 of the entire market, there are a lot of opportunities for new products and services, said Magnus Bocker, SGX’s CEO.
One announcement that drew attention Tuesday was CQG’s newly launched connectivity to Eris Exchange for trading swap futures as an alternative to OTC swaps. CQG says the futures are more capital efficient. According to Pat Kenny, CQG’s SVP of client relations, this is something customers had been asking for, and there is interest in the tie-up because swap futures are something new and a little bit different. Eris is “not your typical futures and options exchange,” he said.
The cost of OTC swaps has been coming into focus lately – costs for firms are passed on to clients, said Mike Riddle, the COO of Eris. These include both the initial margin and the clearing fees on top of that, which compensate the clearing firms for the capital requirements imposed on them, he said. Swap futures have a smaller initial margin, which is a direct savings to the client, and clearing firms that reduce the initial margin for their customers have fewer capital charges, resulting in even further savings to customers, he added.
Eris has seen increase volume and open interest in their swap futures in the past months. ADV in March was more than 9,000 contracts, Riddle said.
CQG has a wide distribution, which is an advantage for Eris, and it is known for analytics and charting, which are added features that may attract more customers for Eris, he said.
Also, “interest rate products are often traded against other interest rate products, and CQG is a great tool to trade swap futures against cash treasuries and other IR futures,” Riddle said. CQG has excellent distribution to futures traders and cash Treasury traders.
Connectivity was launched just a week ago, and it will take a little time to judge results, Kenny said.
Also – Eris exchange is planning a press release for tomorrow – Wednesday – so heads up!