Five Minutes with Christopher S. Edmonds
Chris Edmonds is the chief executive officer of International Derivatives Clearing Group, or IDCG. He has held the position since August of 2008. In addition to his work at IDCG, Edmonds has over 10 years of experience in M&A and business construction. Before joining IDCG, Edmonds was chief development officer for ICAP Energy, LLC. He now sits on the board of the NYMEX Foundation with others who had a hand in creating the current energy market. Edmonds spoke recently with MarketsWiki’s Christine Nielsen, opining about his winding career path and the fact he put aside flying in pursuit of clearing.
Q: Tell me about your professional path. Has it taken the route you'd intended?
A: I'm not sure that anyone in our space “intended,” intended is probably not the right word. Is it something that I've enjoyed? Absolutely, it's something that I've enjoyed. You sit back and you remember your childhood and you think about where you want to be in terms of lifestyle, what have you. Certainly the path that it's taken has afforded me some great blessings. But to say that I intentionally designed this path would be a false statement.
Q: What had you anticipated?
A: I originally thought I was going to be an attorney. That took a turn early in life and I decided not to go down that path. I found my way into the commodity world. That was 13 years ago now. Commodities turned into clearing and clearing turned into exchanges, and here we are.
Q: What is one of your personal credos?
A: Be transparent. It's advantageous when you're running a clearinghouse to be transparent. It's kind of disadvantageous when you run a clearinghouse and you're not transparent.
Q: Could you expand on that?
A: We have nothing to hide. I think there's a lot of misinformation about what IDCG is hoping to accomplish. We're revolutionary. We define it far more as evolutionary in what we're doing. And the dislocation we experienced last fall certainly defined a need, as an industry, to find ways to increase the transparency as a way to increase confidence in those who invest dollars in these markets and use these instruments. It doesn't necessarily mean that the market has to fundamentally change, but it does mean that people have to play by the same rules. The historical system of those being super advantaged by a set of rules being stacked in their favor, does seem to be under question.
Q: How would you characterize IDCG and your work at IDCG now?
A: IDCG has motivated change within the industry. We have remained relevant in the debate as we provide an innovative look into the futures of OTC derivatives. At a time where some say derivatives are too risky or are not understood, IDCG provides a very clear and regulated way forward while providing the foundation for future growth.
Q: How do you think you'll be able to characterize IDCG in five years?
A: In five years, profitable! A company that had enough thought leadership to move the industry in a positive direction and be part of the solution and not part of the status quo.
Q: What do you think about the idea of implementing position limits for certain market participants that have until now relied on exemptions to conduct their business?
A: My belief is they are coming, the products with them will increase over time and they should be developed with market logic and not some arbitrary assignment – otherwise the pendulum swings too far and the true market is damaged.
Q: You have a good deal of experience with mergers and acquisitions. What do you think of the current M&A environment? Where are things headed?
A: The current environment is more one of necessity...The long shots have no chance to get done. The barometer is when does credit become freed up.
Q: You list private aviation on LinkedIn as one of your hobbies. Do you fly? What type of plane?
A: The Key man insurance policy [a life insurance policy written to help a company when its survival rests on one or two people for which a company pays the premiums and is the beneficiary if the person dies] doesn't allow me to hold a license. Aviation is still a hobby. I talked with John Damgard about private aviation. It is a sense of freedom. [Edmonds flew a Cirrus airplane. It's an airplane with its own parachute built into the aircraft. This model of plane also boasts NASA-designed wings, lightning detectors, and joystick controls.]
Q: You are involved with the NYMEX Charitable Foundation [which aims help kids, the elderly and environmental causes]. When did you become involved with them? Is there something that the group has accomplished that makes you most proud?
A: I've been with the group for about five years as a supporter and a promoter. I’m about to complete the second year as a member of the board. The Foundation has a continued focus on a diverse group of opportunities.
Q: What is one little-known fact about you that would surprise most people?
A: I am the national president of the Delta Sigma Phi Fraternity. [Edmonds noted that he spends a good amount of time traveling in conjunction with his work at the fraternity]. The fraternity services around 150 locations across the U.S.