Washington, DC, 23 November 2021— FIA Tech, the futures industry’s leading technology provider, today announced that together with nine futures exchanges and five index providers including FTSE Russell, MSCI, Standard & Poors and Taiwan Index Plus Corporation, it has launched a new analytic service to help US trading firms and investors navigate complex regulations governing trading of non-US index derivatives.
Due to the regulatory requirements of the joint SEC/CFTC jurisdiction over non-US index futures, the classification of indices as “narrow based” or “broad based” drives whether and how products can be traded by US clients. In order to ensure that firms remain compliant with regulations, clearing firms, buy side firms and exchanges must be able to monitor the regulatory classification of index futures on a continuous basis. In the past year, index futures with significant global volume incurred classification changes, which unexpectedly required many US clients to offload positions and cease trading the products.
The new FIA Tech analytics and data service will offer a central source of validated data for firms to use for non-US index classifications, providing consistent market data and analytics so that market participants can come to accurate, consistent determinations.
FIA Tech has partnered with exchanges including Nasdaq, B3, Tokyo Stock Exchange, TSX, BME Market Data, Tel Aviv Stock Exchange, Budapest Stock Exchange and Matba Rofex to design the service. It has been deployed to FIA Tech’s existing reference data network to provide a validated source of data for use by each institution’s compliance teams.
Ricardo Manrique, Director, Derivatives Strategy, FTSE Russell said, “FTSE Russell is pleased to have worked with FIA Tech on this important derivatives industry initiative to create a consistent source of index information regarding non-US index based FTSE Russell index linked derivatives. This new analytics tool will provide market participants with important insights to help them navigate the complicated regulatory landscape of global index futures.”
Nick Solinger, CEO of FIA Tech said: “Uncertainty about the regulations and the complexity in performing the analyses could discourage use of these important products to manage risk or negatively impact liquidity. We are pleased to be working with the leading exchanges, index providers and global clearing firms on a solution for this industry challenge.”
About FIA Tech
FIA Tech recently announced the investment of $44 million by ten leading clearing firms to fund the strategic growth of FIA Tech. The newly capitalized FIA Tech will be investing to further the development of existing products that have successfully served the industry and launch innovative new solutions to improve market infrastructure across the listed and cleared derivatives industry. Under its new structure, FIA Tech will continue to work in partnership with the broader industry, including exchanges, clearinghouses, clearing firms and other intermediaries, independent software vendors, buyside firms and end users to bring efficiency to the exchange traded and cleared derivatives industry.
Current FIA Tech services include digitally managing give-up agreements, meeting regulatory compliance requirements arising from CFTC, MIFID II and exchange regulatory compliance, reconciling and settling brokerage fees and providing reference data products that are required across the pre- and post-trade space in futures and equity options.
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