London, 17 May 2017 – The World Federation of Exchanges ("WFE"), which represents more than 200 market infrastructure providers including exchanges and CCPs, has responded to the European Commission's Public Consultation on The Operations of the European Supervisory Authorities (ESAs).
While the consultation has an EU focus, there are some items that are relevant to the WFE's international membership, therefore its response focuses on three key areas:
- The international aspects of the ESA's work: Whilst important for the ESAs to remain comfortable that third countries continue to satisfy standards of equivalence on an ongoing basis, this should be in the context of deference or mutual recognition principles underpinned by strong communication and information sharing arrangements. Extending the ESA's powers in the way described would encourage the use of those powers in a way that may be extra-territorial in nature, adding complexity and ambiguity for market stakeholders, undermine the principles of deference and trust between regulators, and risk fragmenting markets.
- Access to data: Given there already exist practices set out in international guidance, and/or specific cooperation arrangements between jurisdictions to facilitate the exchange of relevant information, we consider Authorities should consider carefully whether duplication of such requirements would be proportionate to the costs to the market of doing so.
- Direct supervisory powers in post-trading infrastructure: The WFE and its members do not support extending ESMA's powers to non-EU post-trading market infrastructures, and contend this would introduce risk and remove the benefits of close local supervision. We continue to support mutual recognition arrangements between jurisdictions. These should be based on common standards, use an outcomes-based approach to recognising the framework in foreign jurisdictions, and rely on regulatory deference thereafter.
Nandini Sukumar, Chief Executive Officer, WFE said: "The WFE welcomes the opportunity to provide its perspectives on this EC consultation document. We are particularly keen to emphasise that the WFE and its members support a system based on global standards and principles, which is implemented and overseen by national authorities. National authorities are best placed to understand and take swift action on issues that are particular to the local market, environment and market structure. Failure to do so could be to the potential detriment of the wider overriding goals of financial stability and fair, efficient and orderly markets."
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About the World Federation of Exchanges (WFE):
Established in 1961, the WFE is the global industry association for exchanges and clearing houses. Headquartered in London, it represents over 200 market infrastructure providers, including standalone CCPs that are not part of exchange groups. Of our members, 41% are in Asia-Pacific, 40% in EMEA and 19% in the Americas. WFE exchanges are home to nearly 45,000 listed companies, and the market capitalisation of these entities is over $67.9 trillion; furthermore, around $84.18 trillion (EOB) in trading annually passes through the infrastructures WFE members safeguard (at end 2016).
The WFE is the definitive source for exchange-traded statistics, and publishes over 350 market data indicators. Its statistics database stretches back more than 40 years, and provides information and insight into developments on global exchanges.
The WFE works with standard-setters, policy makers, regulators and government organisations around the world to support and promote the development of fair, transparent, stable and efficient markets. The WFE shares regulatory authorities' goals of ensuring the safety and soundness of the global financial system, which is critical to enhancing investor and consumer confidence, and promoting economic growth.
For more information, please contact:
Head of Communications, World Federation of Exchanges
Phone: +44 20 7151 4137 / +44 7850 287 685