Thursday, January 16, 2020 / 03:41 PM
/ By Dr Urs Ruegsegger / Header Image
Ruegsegger, Chairman of the World Federation of Exchanges ("WFE"), the global
industry group for exchanges and CCPs, yesterday delivered a speech at the
WFE's Annual Reception, which took place in London, following the WFE's first
Board meeting of the year.
a highly productive Board meeting today which enabled us to consider how we
confront the challenges ahead and take advantage of opportunities to best
position our industry for what is anticipated to be an interesting 12 months.
Whether it is trade wars, equivalence and recognition issues or other forms of
cross-border obstacles, geopolitical matters are disrupting the free flow of
trade in an unhealthy manner. Unfortunately, this seems increasingly to be a
fact of life, and regulators have recently signalled a tougher approach. But
the WFE will continue to promote the best possible cross-border trading
environment and international co-operation, because that is a tried and tested
concept that has proven to have benefits for everyone. Meanwhile, we will have
to be vigilant with regards to other, more immediate threats to
well-functioning market infrastructure. I will come back to this in just a
infrastructure is the lynchpin of the marketplace. It is the central hub which
binds competing sides in a safe, efficient, fair and reliable market
environment. Our industry must be as united as other sectors - if not more so - in defending this mandate. I fear that the strength of investment in lobbying
made by some sectors of the financial services industry is an attempt to drown
out the essential, practical and realistic approaches and behaviours that those
in this room adopt and represent.
all that I have said, you may be expecting a more assertive WFE over these next
12 months. I would not discourage that expectation.
instance, it will be a further extension from our 2019 work. We started last
year putting down a significant marker on the topic of market data and how it
is priced; and finished the year by announcing a major work programme on the
crucial importance of accurately identifying the incentives of various parties
in and around central counterparty clearing.
we are not just saying this because we like the sound of our own voice.
Unfortunately, as time has passed, the memories of the 2008 crisis fade. As a
consequence, the narratives have shifted, and it has become necessary for us to
ensure more balance and accuracy in the discourse around significant public-policy
is a theme running through these distorted pictures of the world. Increasingly
some quarters take for granted the hard and very precise work done by exchanges
and CCPs. Instead, they seek to appropriate for themselves the value created - and created uniquely - by exchanges and CCPs.
clear, the arguments we are seeking to correct, and face down, originate from
the desire to preserve profit margins for certain parts of the industry rather
than from the wish to build a strong and resilient economy.
reality is that exchanges and CCPs generate strong benefits for society - what
economists call 'positive externalities' - as well as generating returns for
their owners through the efficient delivery of valuable services. (It is
irrelevant whether those owners be shareholder, customer or state; fully a
third of our membership base, including SIX, is not listed).
ahead, we will need to continually reemphasise and explain why exchanges and
CCPs do what they do; why they were integral in the post-crisis response; why
markets are able to function in a fair, effective and safe manner; and why high
investments by market infrastructures are necessary to maintain that status.
competition in what we do and that competition is welcome, but it must be
overseen by supervisory authorities who take a balanced approach.
striving to achieve these aims, the WFE will have an open door to working
hand-in-hand with our partners and their expert teams. And I hope that we can
all collaborate for the wider benefit of the markets and the economies we
serve, even when currently buffeted by geopolitics.
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