Attached here is the CFTC’s Financial Data report for FCMs, sorted by Segregated Funds Required: fcm-data-2015YE-sorted-by-Seg-xls
As we’ve discussed here before, FCM consolidation (Wedbush, Crossland, Knight, etc.), executive malfeasance and criminal activity (MF Global and Peregrine), and lousy economic times (Jefferies) have led to fewer and fewer clearing members that are willing to clear FCM customer business.
We are now down to just 55 clearing firms in the U.S. that are carrying and reporting Customer Segregated Funds. The amount of Customer Seg assets held by FCMs at the end of 2015 was $148,435,860,345.00. There were 72 FCMs registered at CFTC at the end of 2015.
By contrast, just five years ago, 71 U.S. FCMs were clearing customer business, and the amount of assets held in Seg was $151,055,523,757.00: fcm-data-2010YE-sorted-by-Seg-xls At that time, 122 FCMs were registered with CFTC.
Talk about concentration risk: roughly the same amount of Customer Seg assets held at roughly 25% fewer clearing firms.
And ten years ago, when just $94,204,546,290.00 was held in Customer Seg accounts, there were 94 FCMs clearing customer business, and there were 178 FCMs registered with CFTC: fcm-data-2005YE-sorted-by-Seg-xls
People talk about exchange volumes, and exchange revenue, how high the volumes are, how robust trading revenue is, and cite this as evidence that the U.S. derivatives industry is healthy and growing.
In my view, they’re looking at the wrong metric.