Initial margin requirements reached record highs at major clearing services in Q3 2024, driven by market volatility in August. The Depository Trust and Clearing Corp.'s Government Securities Division saw a 25.5% increase to $56.3 billion, the Japanese Securities Clearing Corp. reported a 25.1% rise to 2.58 trillion yen for Osaka Stock Exchange products, and CME Clearing's futures and options unit experienced a 12.3% increase to $220.7 billion. Overall, initial margin across 35 clearing services at 14 central counterparties rose 9.4% to $1.09 trillion.

The UK government will make the pension fund exemption from the clearing obligation permanent after feedback indicated that removing it would hinder investment in productive assets. Most respondents to a call for evidence expressed concerns about liquidity management and supported maintaining the exemption.

Cboe Global Markets is planning new products after a record trading year, including variance futures and options on Volatility Index futures. "As we go into this year, we will focus on adjacencies to that volatility product suite - and will look for more ways to engage with and trade around dispersion," Catherine Clay, global head of derivatives at Cboe said in an interview.

The global oil market's 2025 outlook has become uncertain after the US imposed significant sanctions on Russia's energy sector, targeting producers, insurers and tankers. Oil prices have surged, with Brent potentially reaching the upper $80s per barrel. Analysts, however, remain cautious, noting the resilience of supply chains and the potential for increased discounts on Russian oil.

Europe faces a natural gas supply challenge this year as it risks failing to meet storage targets for next winter, potentially driving up prices and outbidding emerging markets for liquefied natural gas. Europe needs to import an additional 10 million tons of LNG, about 10% more than in 2024, to cover projected demand, according to MST Marquee analyst Saul Kavonic.

Abaxx Exchange has introduced a nickel sulfate futures contract, its first new product since launching in June. The US dollar-denominated, physically delivered contract addresses the growing demand for nickel sulfate, driven by the energy transition and electric vehicle battery needs.

Inflation uncertainty in 2025 could lead to increased volatility and higher margin calls from clearinghouses, says OpenGamma margin expert Jo Burnham. "Inflation is proving to be stickier around the globe than people hoped, which means there will likely be less rate cuts," Burnham says. "This uncertainty could cause volatility to spike and generally, this will see central counterparties having to raise margin rates."

Financial institutions are increasingly building bespoke trading systems due to the convergence of cloud technology, open-source tools and tech accelerators, writes Matt Barrett, CEO of Adaptive. This shift is leveling the playing field, allowing mid-sized firms to access capabilities previously reserved for larger institutions, and is expected to enhance market efficiency and drive innovation.

Hong Kong Exchanges and Clearing has appointed Gregory Yu as managing director and head of markets, and Kevin Rumjahn as managing director and head of strategic projects. Yu, who joins in March, has 25 years of capital markets experience, most recently at JPMorgan Chase, while Rumjahn, who joins this month, has held senior roles at Nomura and Credit Suisse.

Outgoing Securities and Exchange Commission Chair Gary Gensler has advised the next administration to maintain investor protections, warning that broadening the definition of accredited investors or reducing disclosure requirements could harm retail traders. "Investors get to decide what risks to take as long as the issuers have been putting out full and fair, truthful disclosures," Gensler said.

China has finalized rules for noncleared margin that largely align with international standards, requiring major banks and financial institutions to post initial margin on new bilateral derivatives trades starting in 2027. However, legal experts note gaps, particularly regarding domestic securities houses and custodian infrastructure.

The International Organization of Securities Commissions has released draft recommendations on pre-hedging that largely mirror existing industry codes, such as the FX Global Code and the Financial Markets Standards Board guidelines. The draft suggests dealers pre-hedge only for genuine risk management, act fairly toward clients and minimize market impact.