Futures Industry Association (FIA)

The Futures Industry Association (FIA) is a leading authority on the global derivatives industry. Headquartered in Singapore, Brussels, London and Washington D.C., the FIA is an advisory body to the world's futures and options market participants.

Operating as a network of clearinghouses, exchanges and trading firms, the FIA aims to satisfy its self-stated, multifaceted mission:[1]

  • Support market transparency, competition and open accessibility
  • Preserve the integrity of the financial system
  • Promote high standards of professionalism among industry participants

The FIA is the international go to resource for derivatives industry-specific research and data. Using a vast network of market participants in 48 countries, the FIA offers unparalleled derivatives market expertise, specifically in the area of systemic risk management.

Historical Background

Founded in 1955 in New York, N.Y., the FIA was then known as the Association of Commodity Exchange Firms. Originally, its primary functions were to promote market efficiency, educate and protect market participants from fraudulent practices.

Upon the trade of commodity-based derivatives gaining popularity, the FIA experienced growth and global expansion. The following are the important milestones in its history:[1]

  • 1973: The Association of Commodity Exchange firms is expanded to include futures commodity merchants (FCMs) in Chicago.
  • 1978: The Association of Commodity Exchange Firms is renamed the Futures Industry Association (FIA). Headquarters is moved from New York, New York to Washington D.C.
  • 1984-87: International derivatives market participants are invited to become members of the FIA.
  • 1993: FIA Europe is founded in London, U.K. as the Futures and Options Association.
  • 2005: FIA Asia is founded to address issues facing the Asia-Pacific futures and options industry.
  • 2012: FIA Asia opens a formal branch in Singapore.
  • 2013: FIA Europe and FIA Asia form an alliance, promoting coordination between markets and regions.
  • 2016: FIA Europe, FIA Asia and FIA United States officially merge into a single organisation.

Since January 2016, the branches of the FIA have worked as a single entity. This transition has streamlined cooperation and data flow between regions, effectively centralising the study of all exchange-cleared derivatives products.

Form And Function

The FIA exists as a research and advisory body, independent of government influence. It operates under no official authority and is not commissioned with the power to enact laws or legislation upon the derivatives industry.

At the core of the FIA's functions is the ongoing study and evaluation of the futures and options industry. To accomplish this objective efficiently, the FIA is divided into three divisions, each designed to focus upon a specific area of trade:[2]

  • FIA Market Technology: FIA Market Technology addresses the role technology plays in the derivatives industry. It provides a forum for discussion on how advances in this area may be best implemented to promote efficiency.
  • FIA Operations Americas: Operations Americas consists of five committees that meet periodically to promote regional cooperation. The committees focus upon brokerage services, clearing, financial management, asset deliveries and education.
  • FIA Law And Compliance: Law and Compliance evaluates regulatory developments impacting the derivatives industry. Official reports and findings are supplied to regulators for the crafting of legal decisions.

Membership And Governance

The FIA consists of more than 15,000 members. The membership base includes a broad cross-section of industry professionals. Direct market participants, technology vendors, and lawyers may seek to become a part of the FIA. In practice, there are two membership types:[3]

  • Primary: FIA primary members are firms that physically hold the funds of market participants. These groups contribute to the viability of the market infrastructure, and are thus extended a considerable degree of the FIA's resources. High profile primary members include Citigroup, J.P Morgan, and HSBC Bank.
  • Associate: FIA associates are any members that "support the ecosystem of the cleared derivatives markets."

Oversight of the FIA is conducted internally by a Board of Directors. In addition, Regional Advisory Boards in Asia and Europe may be called upon for support in organisational governance. The Board of Directors is tasked with the following duties:[4]

  • Strategic development
  • Member acquisition
  • Collecting member dues
  • Staffing
  • Budget management

Primary members are eligible to serve on the board of directors and are chosen periodically. As of 2019, Jerome Kemp of Citigroup Global Markets served as the Board's Chairman.[4]

Summary

Featuring a truly international membership base, the FIA exists as a global authority on the exchange-traded derivatives industry. While not commissioned as an official regulatory body, the organisation offers advice, data, and forums for the development of new ideas. FIA resources are frequently utilised by institutional market participants, governments, and financial industry policy makers.

References

1

Retrieved 02 Apr 2019 https://fia.org/about-0

2

Retrieved 02 Apr 2019 https://fia.org/divisions

3

Retrieved 02 Apr 2019 https://fia.org/node/289/

4

Retrieved 02 Apr 2019 https://fia.org/governance-0