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Apounding headache. Fuzzy memories of the night before. A sinking feeling of shame and ‘what really happened?’ In many ways 2016, in my opinion, resembled a bad hangover.
With Brexit and the US election result, many of us are scrambling for answers to
what has happened this year. Certainly within the derivatives industry, many are
still assessing the impact of these two landmark events on their business.
For those banks and buy-side firms in the UK, big question marks loom over
the future of derivatives clearing in London. With around 75% of global euro-denominated derivatives clearing, the status of London as a clearing centre has
caused alarm. We take a look at the impact Brexit could have on the City’s role
in the global derivatives market (p. 16).
2016 marked the year for European regulators to flush out the details of MiFID
II. The next year however, will be critical for some firms to deal with the
overwhelming changes. From new transaction reporting requirements, to
Europe’s first ever trading mandate, 2017 could end up determining how
prepared firms are. For our MiFID II Focus (p. 46) feature, we take a look at
some of the most pressing requirements the regulation will enforce for
The year also showcased increased consolidation, first with the announcement
of the London Stock Exchange –Deutsche Boerse merger, to the International
Securities Exchange (ISE) becoming part of Nasdaq, to the surprise deal that
would see CBOE takeover Bats Global Markets. We sat down with CBOE’s chief
strategy officer in Chicago, John Deters, in which he speaks about the rationale
behind the acquisition and the future for the combined company (p. 30).
There was also consolidation at the trading level, with some of the major buy-side players merging their fixed income, equities and FX desks. We spoke with
Adrian Biesty, head of trading at Lombard Odier Investment Managers (p. 22),
about his plans for the trading desk and how his firm will utilise derivatives.
For many in the derivatives industry, there are hopes the 2016
hangover would only be a short one. Depending how far
reaching the events of this year will have going forward, we
may swearing we will never drink again.
Editor, The Trade Derivatives
The 2016 hangover