The advent of electronic trading brought an infatuation with for-profit exchanges, while Dodd-Frank brought hope of regulatory protection for the little guys. Neither delivered in 2013 — will 2014 be any different?
The futures industry has had a tough couple of years, and with each storm there has been a dire warning that people will abandon it in droves. But the futures industry, particularly in Chicago, has faced many challenges and usually comes out the other end stronger through its ability to innovate.
2013 was a year of anticipation and perhaps disappointment. For those hoping the 2012 election would have settled some of the dysfunction in Washington, that did not happen. In fact, we doubled down on fights already settled as if there were no new business. Equity markets impressed, but few saw it as anything other than the hand of the Fed. Mercifully, the Fed signaled the beginning of the end of QE3 by year-end.
As we are all well aware, the last two years have been the most challenging for the futures industry in the almost 80 years the two of us, collectively, have been in the business. The collapse of MF Global and the uncovering of the Peregrine Financial Group (PFG) fraud brought about the questioning of systems and procedures believed to be safe
How about those traders so faithful of the futures industry that they left millions in their MF Global account because they though the guarantee of segregation was safer than the limited FDIC guarantee?
There are a lot of folks in the Futures industry who would have liked the commission to have declared bankruptcy a year or so ago before writing rules likely to put their businesses on the edge of solvency.
There are four futures exchanges in China that list 31 commodity futures contracts and one financial futures contract. All major commodities, some of which have the highest markets share globally, are listed except for crude oil.