Speaking as he opened the FIA International Derivatives Expo (IDX) event in London on Tuesday Walt Lukken (pictured) said the industry experienced a number of extremely high volume days this year, providing the latest test for firms' post-trade processes.

“As many of you know, we have seen incredible volatility this year and record levels of trading volume,” Lukken said. “But extreme volatility creates real problems for our customers and puts a tremendous amount of stress on our infrastructure. Covid exposed this fragility as record volumes delayed allocated trades by days and sometimes weeks.”

In response to the bottlenecks seen in March 2020, the FIA created in 2022 the derivatives markets institute for standards (DMIST), an independent body that went on to publish post-trade recommendations in June 2023.

“The adoption of this standard is beginning to bear fruit,” Lukken added. “The highest volume day in our industry occurred in April of this year, during President Trump’s announcement on raising tariffs. It exceeded the previous daily record set during the Ukraine invasion by more than 10% and surpassed the record set during the Covid shutdown in 2020 by one-third.

“Even with this growth, mis-allocated trades dropped by nearly 50% compared to the Ukraine peak. And a vast majority of those delayed trades were resolved within a day or two—not the several days we experienced in 2020.”

DMIST launched in June last year a consultation on average pricing standards for clearing houses. Early this year, the standards body proposed standards on position transfers in exchange-traded derivatives, its third set of recommendations.