An FTX failure can become an advantage of the old guard

Sam Bankman-Fried and his crypto exchange FTX have overshadowed both major US meetings from the futures industry association this year.

in March "Sbf" in Boca Raton in the sunny Florida everyone stole the show when he chatted and promised with baseball stars not only to revolutionize cryptocurrencies, but the entire system that underpins the global financial markets.

When the first snow of the winter arrived at the FIA ​​Expo in Chicago this month, the name of FTX was hastily covered up on sponsorship boards that were printed before the group went bankrupt.

The quick decline of the stock exchange is embarrassing for managers who, as a futures broker put it, were "fond" by the upstart. But in practice it should benefit many FIA members.

It is the latest in a series of positive news for more traditional stock exchanges and the brokers and technology groups who work with them, with some say that the industry has been in its best position for decades.

The brokers-known as "Merchants"-were threatened to make the plans of Bankman-Fried-obsolete that ensure that investors have enough security to support trading positions and which form the core of the business models of exchanges such as CME and CBOE.

With the effects of FTX, it becomes more difficult for everyone else to disturb this setup. Gerry Corcoran, Chief Executive at RJ O’Brien, said: "What happened is proof that the suggestions were not well thought out. The current model is so robust. To prevent infection."

As head of the largest independent FCM, Corcoran has an interest in criticizing FTX's plans, but comments from high -ranking supervisory authorities at the conference indicate that they would be inclined to agree.

Christy Goldsmith Romero from the Commodity Futures Trading Commission said that she already had "many considerable concerns" before the collapse and warned "that other [disrupters] come, I am not for this tailor -made regulation".

managers on established stock exchanges also believe that demands for clearer crypto regulation will benefit companies such as themselves who have more experience in dealing with watchdogs as crypto native start-ups.

In the meantime, their existing trading transactions are flourishing because market volatility drives the volumes up. CBO, CME, Intercontinental Exchange and Nasdaq all exceeded the analyst estimates in the third quarter.

The Securities and Exchange Commission also strives to revise the stock markets, which would make it easier for the stock exchanges to compete with out -of -the -counter trade groups such as Citadel Securities and Virtu Financial. The final details can still change, but "the broad topic is quite stock exchange -friendly," said a senior employee.

This positive setting is transferred to FCMS and suppliers such as the FinTech group Trading Technologies. Keith Todd, Chief Executive of Trading Technologies, says: "I don't think we have ever been in a better position in the industry - market volatility, rising interest rates, all of these dynamics mean that our customers are all earned a lot of money.

Nevertheless, enthusiastic managers should not be carried out too much. The industry still faces challenges, and the development of the share price was at best mixed this year. While Nasdaq and CBOE have fallen less than the wider market, CME and ICE fell by around 20 percent.

The fact that the SEC tries to resemble competitive conditions compared to alternative trading places shows how the stock exchanges have fought in recent years to keep market shares. Many have also diversified into new companies that are more exposed to an economic downturn, such as: B. the ICE swivel in mortgage technology. And although it has been largely advantageous so far, high volatility is good for the trade until it is no longer.

Russia's invasion in Ukraine, for example, caused such a dramatic shock on the raw material markets that the stock exchanges repeatedly increased margin requirements. Citi's analysts do not expect a quick recovery of activity.

The energy crisis also threw questions about the balance between risk management and the loss of business to other trading places.

"If you increase the margins 17 times, you wonder if the level was correct at all," said an FCM at a large bank. "If [Exchanges] do not accept the trades, they are carried out less transparently elsewhere. For this purpose, the collapse of FTX, after dominating the last meetings, could offer an additional advantage for the rest of the sector.

"Crypto is really tiny within derivatives," said the FCM. "I am pleased that we can talk about the industry again.. Maybe at least at the next conference."