Luke Clancy
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Editor-at-Large, Risk.net @Risknetnews
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Articles by Luke Clancy
Risk managers grapple with hazards and benefits of intraday repo
By Market participants are starting to grapple with the risk management implications of tokenised intraday repo trades, which are exempt from central clearing mandates and may not be captured in financial statements or regulatory filings. "The industry is certainly thinking very carefully at the moment about ensuring that intraday risk is managed properly and reported properly," says the head of
FCMs back CFTC proposal granting opt-out from CME oversight
By Clearing industry sources have welcomed a new proposal from the US derivatives regulator that will allow members of CME to select the National Futures Association - rather than the Chicago bourse - as their designated self-regulatory organisation (DSRO). Futures commission merchants (FCMs) have long complained that CME's decision to establish an affiliated FCM, known as F&O Financial, represented a
Red alert: how Nasdaq’s Smarts became surveillance blind spot
Skip to main content End of drawer navigation content Red alert: how Nasdaq’s Smarts became surveillance blind spot Software that looks for shifty trades has been asleep on the job, affecting alerts for hundreds of products On July 8, users of Nasdaq’s Smarts software received an email. It said – not in these words – that the software had not been doing its job. That’s a problem, because Smarts has a big job.
Red alert: how Nasdaq’s Smarts became surveillance blind spot
On July 8, users of Nasdaq’s Smarts software received an email. It said—not in these words—that the software had not been doing its job. That’s a problem, because Smarts has a big job. The software promises to help market participants spot suspicious trading behavior—spoofing, frontrunning, insider trading and more—that could be illegal.
Red alert: how Nasdaq's Smarts became surveillance blind spot
By On July 8, users of Nasdaq's Smarts software received an email. It said - not in these words - that the software had not been doing its job. That's a problem, because Smarts has a big job. The software promises to help market participants spot suspicious trading behaviour - spoofing, frontrunning, insider trading and more - that could be illegal. Firms that do not properly monitor their trading may
CFTC backs clearing exemption for risk reduction runs
By A US regulator has decided to exempt post-trade risk reduction services (PTRRS) from clearing obligations, with some market participants also urging other supervisors to follow suit. Clearing houses, however, fear the exemption could be used to remove derivatives trades from central clearing. A US bank clearing manager says PTRRS are "helpful for the industry in terms of capital requirement
0DTE options and non-banks could accelerate market risk
By Market structure changes, including the growing share of options with zero days to expiration (0DTE) and non-bank financial institutions, are leading trading desks into "uncharted territory", market risk managers warned this week. "We have never seen more risk transacted outside of banks than we do now," said Martin Sweeney, global head of corporate and investment banking market risk coverage at JP
Managing AI models is reshaping three lines of defense, say banks
The job of managing artificial intelligence models is challenging the traditional three lines of defense framework, say risk managers, with some calling for the first line to take on more formal responsibility for continuous testing and monitoring of AI models. With financial risk models, traditionally, a bank’s model validation team creates a challenger model, and in some cases also does part of the monitoring and testing.
Managing AI models is reshaping three lines of defence, say banks
By The job of managing artificial intelligence models is challenging the traditional three lines of defence framework, say risk managers, with some calling for the first line to take on more formal responsibility for continuous testing and monitoring of AI models. With financial risk models, traditionally, a bank's model validation team creates a challenger model, and in some cases also does part of
EU banks welcome high-risk systems breather from delay in AI act
By Risk managers have breathed a collective sigh of relief at the European Union's decision to postpone a key element of its Artificial Intelligence Act, under which financial institutions, along with other companies, must report their uses of AI. Banks will now have more time to prepare for some of the more onerous parts of the new legislation - most critically, its requirements for reporting what
Clearing banks pick holes in VAR-based CCP margin models
By Executives at two large clearing banks have joined the chorus of voices complaining about the difficulty of predicting and explaining the outputs of value-at-risk models used by central counterparties (CCPs). The move to VAR has made margin modelling "much more complicated", said Amy Elliott, Americas head of exchange-traded derivatives at UBS: "It's less transparent, so when you have periods of
Portway leaves Barclays, destination unknown
By Barclays operational risk head Steve Portway has left the firm, the bank confirmed. His destination is unknown and Portway did not respond to requests for comment. Portway had served Barclays for 14 years, joining the bank in May 2012. A colleague told Risk.net: "Steve has sadly left Barclays." Portway's role encompassed heading up the bank's operational risk framework, capital and stress testing and
Illiquid assets pricing still needs expert judgement, say banks
By As regulators in the European Union prepare to release new technical standards on the issue, valuation experts argue that non-quantitative methods are a valid way for banks to price hard-to-observe assets, as long as there is adequate internal challenge. Jessica Tang, JP Morgan's global head of prudent valuation and European head of credit valuation control, said her biggest data observability
AI could shrink trader roles
By Traders on the buy and sell side face an uncertain future as senior decision-makers begin to consider the extent to which artificial intelligence can make the leap from augmentation tool to human replacement. "The question there will be in the near future - actually, do we want to replace 10 traders, [or would] we rather have eight agents, one AI engineer, and one risk manager to supervise the
Doubts linger over start date for 24-hour US stock trading
By More of the jigsaw puzzle pieces are falling into place for near-24-hour stock trading in the US, but not everyone is convinced the proposed start date will be hit. The National Securities Clearing Corporation (NSCC) said in a filing last month that rule changes necessary to support extended traded hours would be implemented on June 28, subject to approval by the Securities and Exchange Commission
Waiting for the light: What's stalling European equity markets?
By European cash equity markets appear to have stalled. Average daily volume is in the order of seven times smaller than in the US. But not everyone agrees why. Or how to fix it. The European Securities and Markets Authority (Esma) blames the rise of dark trading - where price and volume details aren't divulged - for the meagre volumes. Exchanges agree, in part, but they receive many other
The quiet force steering prediction platforms to regulation
By In November 2024, federal agents raided the home of Polymarket founder Shayne Coplan as part of an investigation into illegal election betting on the platform. For Richard Jaycobs, a futures industry veteran hired to oversee the firm's US licence application, the event clouded the path to a successful registration, causing him to step down from his role as head of market expansion. "My feeling was
Clearing firms flummoxed by new margin models at CME, Ice
By Clearing firms are finding it difficult to decompose and explain the outputs of value-at-risk models used to set margin requirements for cleared energy contracts. The transition from standard portfolio analysis (Span) to VAR-based portfolio margining - CME made the switch in 2023, with Ice following suit in 2025 - has materially reduced margin volatility during periods of market stress, including
EU task force boss calls on NCAs to wield their powers to meet T+1
By European national competent authorities (NCAs) must wield their supervisory powers - and the sooner the better - to assure a smooth transition to next-day (T+1) settlement, says Giovanni Sabatini, head of the European Union's T+1 Industry Committee, the task force charged with co-ordinating the move. Along with the UK and Switzerland, the EU will shift to the accelerated securities settlement
EU task force boss calls on NCAs to wield their powers to meet T+1
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In Iran war, VAR models ease cliff effect on Ice and CME margins
Amid the global energy fallout from the Iran conflict, a small glimmer of light has emerged – a reduction in the big ‘step changes’ in margin revisions seen after the onset of the war in Ukraine. Data from margin optimisation firm OpenGamma, a Trading Technologies company, shows that for CME and Intercontinental Exchange (Ice), the transition from standard portfolio analysis (Span) to value-at-risk models has meaningfully reduced the size of sudden margin revisions. OpenGamma compared IM
Foreign banks can swerve US Basel op risk capital charges
By Foreign banks have had some of their previous concerns around capital charges for op risk allayed in the latest US proposals for capital requirements, released on March 19 this year, but concerns remain over inter-affiliate counterparty exposures. Matthew Bisanz, a partner at law firm Mayer Brown, says the notice of proposed rulemaking is "generally good news" for foreign banks, especially those
In Iran war, VAR models ease cliff effect on Ice and CME margins
By Amid the global energy fallout from the Iran conflict, a small glimmer of light has emerged - a reduction in the big 'step changes' in margin revisions seen after the onset of the war in Ukraine. Data from margin optimisation firm OpenGamma, a Trading Technologies company, shows that for CME and Intercontinental Exchange (Ice), the transition from standard portfolio analysis (Span) to value-at
NeoClear enters battle for euro swaps clearing
By A new European swaps central counterparty plans to shake up the race for euro swaps clearing with a "low-touch, high-tech" service its backers say will slash cost and complexity as European Union regulators ramp up efforts to clear more derivatives onshore. NeoClear, founded by former Citigroup trader and risk management expert Paul Whitehead, and ex-Numerix managing director Helena Frumson, will
Main Street to Wall Street: Kalshi's bid to go beyond sports bets
By Andy Ross, Kalshi's newly created head of institutional, is keen to emphasise that the prediction markets venue isn't in the gambling game. But it is in the business of making money from its data. Licensed by the Commodity Futures Trading Commission (CFTC), Kalshi is a regulated clearing house and prediction market - and Ross doesn't brook any talk of gambling: "We're a derivatives exchange. And
Top 10 op risks: Resilience put to the test in 2026
By Read the Top 10 operational risks for 2026 article here, and view related articles as they appear over the next week Selected by 37% of overall respondents this year, resilience risk has cemented its fourth place in the top 10 operational risk rankings for the second year in a row, after jumping two places in 2024's survey. For global systemically important banks, it is even more important, coming
EU can handle energy price pressure – it’s been here before
One way to fix a crisis, as the saying goes, is to pour oil on troubled waters. But what if most of the oil is stuck in the Persian Gulf? Such has been the dilemma facing governments around the world, as war in Iran threatens to hit oil and gas supplies and forces energy markets into a volatility vortex. However, European Union officials are quietly confident the region can absorb the energy shock from the war in Iran without resorting to emergency measures. Yvan Verougstraete, vice-chair of the
Iosco chief talks cyber, AI and clearing
By Rodrigo Buenaventura became secretary general of the International Organization of Securities Commissions (Iosco) at a transformative time for markets: technology is creating new vulnerabilities and opportunities; post-crisis capital reforms are diminishing the supply of clearing services; and markets are becoming as erratic as the geopolitics influencing them. The global standard-setter is trying
Cyber insurance premiums dropped unexpectedly in 2025
Skip to main content End of drawer navigation content Cyber insurance premiums dropped unexpectedly in 2025 Competition among carriers drives down premiums, despite increasing frequency and severity of attacks The cost of insuring against cyber losses fell unexpectedly in 2025, despite an increase in the severity and frequency of attacks. Insurance broker Lockton saw premiums across its cyber portfolio drop 11% in 2025.
Andy Ross leaves StanChart
Andy Ross, global head of prime and financing products at Standard Chartered, has left the bank, he has confirmed to Risk.net. Standard Chartered declined to comment, and would not confirm who will replace Ross, if anyone. Ross would not elaborate further to Risk.net on his future plans.
Iosco chief sees no need for CCPs to hold more SITG
By Central counterparties (CCPs) are putting enough of their own resources on the line before losses from a defaulting member are passed onto others, says the secretary general of the International Organization of Securities Commissions. "We are always open to rethink whether something may be improved, but my impression is that the overall regime has so far proven quite resilient," says Rodrigo
Could prediction markets go wholesale? Exchanges think so
By In the fast-growing retail prediction markets run by Kalshi, Polymarket and others, some derivatives exchanges see potential for their institutional users. Banks, prop traders, hedge funds and others are already using data from these markets to inform their own trading. The question exchanges are asking is whether such firms could be tempted to participate directly in prediction markets that are
Iran strikes a stress test for CCP margin models
New margin models introduced by clearing houses in recent years have so far weathered the volatility in energy markets caused by the Iran conflict, though clearing firms warn of more disruptive margin hikes if the conflict lasts more than a few weeks. Oil prices saw intraday moves of more than 6% on Monday and Tuesday, prompting CME to review the parameters of its Span 2 margin model, which was rolled out for energy contracts in late 2023. The Chicago exchange subsequently raised initial margin
Energy markets brace for fallout from Iran strikes
By Energy markets have so far absorbed the volatility caused by the US-Israeli attack on Iran, with oil and gas contracts continuing to trade in an orderly fashion. Clearing firms, though, warn disruptive margin hikes could be on the horizon if the conflict lasts more than a few weeks. Oil prices saw intraday moves of more than 6% on Monday and Tuesday, prompting CME to raise initial margin
CanDeal six-bank tie-up simplifies third-party risk management
By Canadian fixed income trading platform CanDeal is launching a vendor due diligence service that will initially serve the six largest domestic banks, but could be expanded globally in the future. The new utility, built to service BMO, CIBC, National Bank of Canada, RBC, Scotiabank and TD Bank, aims to streamline third-party risk management and regulatory compliance. Jayson Horner, chief executive
ISITC's Paul Fullam on the 'anxiety' over T+1 in Europe
By Three characters are causing a crisis of confidence among back-office staff at UK and European banks, brokers and investment firms: T+1. After laying out a roadmap for next year's switch to one-working-day trade settlement, regulators and industry execs are haggling over the finer details, and companies are under notice to put their plans in place. In the thick of the preparations is the trade body
Cyber insurance premiums dropped unexpectedly in 2025
The cost of insuring against cyber losses fell unexpectedly in 2025, despite an increase in the severity and frequency of attacks. Insurance broker Lockton saw premiums across its cyber portfolio drop 11% in 2025. The first half of the year saw the sharpest reductions, with more moderate decreases in the second half. Lockton expects premiums to decline further at least through the first half of 2026. Carlo Ramadoro, head of cyber and technology at Lockton, says the drop in premiums marks a “rare
Cyber insurance premiums dropped unexpectedly in 2025
By The cost of insuring against cyber losses fell unexpectedly in 2025, despite an increase in the severity and frequency of attacks. Insurance broker Lockton saw premiums across its cyber portfolio drop 11% in 2025. The first half of the year saw the sharpest reductions, with more moderate decreases in the second half. Lockton expects premiums to decline further at least through the first half of
Market doesn't share FSB concerns over basis trade
By The Financial Stability Board's call for authorities to tighten regulation of leveraged basis trading in order to contain financial stability challenges in repo markets has drawn a degree of scepticism from the industry. The FSB warned in a report last week about leverage in the cash-futures basis trade contributing to market volatility, as seen in the $200 billion fire sale of US Treasuries during
FCMs warn of regulatory gaps in crypto clearing
By The Commodity Futures Trading Commission is being urged to bolster customer protections for retail investors in crypto and prediction markets. The calls are contained in responses to a request for comment issued by the CFTC on December 18 on derivatives clearing organisations (DCOs) that provide direct services to retail customers. The CFTC has authorised 10 derivatives clearing organisations (DCOs)
Robertson leaves Barclays' prime services in New York
By Craig Robertson, head of the New York-based prime derivatives services and global quant prime unit at Barclays, has left the firm, to join Connecticut-based Carbon Point. Carbon Point is a specialist firm active in trading, risk, operations and financial engineering. After three months of gardening leave at Barclays, Robertson started at his new employer last week. Robertson was unable to publicly
Risk managers question US reach of Dora third-party list
Risk managers in financial services are unsure how far European Union regulators will be able to impose their will on foreign technology giants, following the release of the EU’s list of critical third parties. The list, published under the Digital Operational Resilience Act (Dora), will intensify discussions around the idea of digital sovereignty, given the prominence of US-headquartered companies.
One Trading brings 24/7 equity trading to Europe
By Netherlands-based start-up exchange One Trading is planning to launch the first 24/7 central limit order book (Clob) for equity perpetual futures before the end of the first quarter, after securing approval from the Dutch Authority for Financial Markets (AFM) for a round-the-clock trading framework that eliminates the need for an external clearing house. The planned instruments bring continuous
BofA urges horizontal CCP fix after CME outage, others demur
By A 10-hour outage at CME Globex that lost banks business late last month helps build the case for fungible "futures-for-futures" transactions that reduce reliance on a single listed derivatives provider, analysts say. The episode could also provide "marketing fodder" for the CME's nascent competitor FMX, they add. Bank of America (BofA) analysts say the outage provides tangible evidence of the US
EU single portal faces battle to unify cyber incident reporting
By The European Commission's proposed digital omnibus package would introduce a single cyber incident reporting portal, but that won't necessarily simplify regulator obligations for financial institutions, market participants are warning. The portal idea is part of a package published by the EC on November 19, and is intended to act as a secure conduit of information to the European Union Agency for
Derivatives industry blasts EU reporting framework
By Industry participants have provided robust feedback to the European Union's financial markets regulator on the supervisor's efforts to reduce reporting burdens. The European Securities and Markets Authority held an inaugural Data Day in Paris on December 2 to showcase how smarter data use and digitalisation can simplify the regulatory framework. Panellists cited multiple examples of overly
Chicago data center outage forced clearers to turn away clients
The outage at a Chicago data center run by CyrusOne last week caused banks to turn away client trading and clearing business, Risk.net, a sibling publication of WatersTechnology,has learnt. The issues with a cooling system forced CME to take offline platforms used for its equity, foreign exchange, bond and commodity markets, and individual financial institutions with co-located servers were left in the same position.
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