London, 20 February 2017 – The World Federation of Exchanges ("WFE"), which represents more than 200 market infrastructure providers including exchanges and CCPs, has responded to a consultation from the Financial Stability Board ("FSB") related to the Continuity of Access to Financial Market Infrastructures ("FMIs") for a Firm in Resolution.
Whilst focused on situations where a firm is in resolution, the FSB's consultation concentrated on a number of requirements for FMI service providers, such as central counterparties (CCPs), therefore the WFE has responded on behalf of its membership.
Overall, the WFE supports the initiative of the FSB to encourage FMIs to maintain access for firms in resolution, where practical. Indeed, in some cases, continued access by the firm to the FMI may be beneficial to the CCP, or at least enable a smoother transition.
The WFE's response can be split into three broad categories, and summarised as follows:
1. Roles and responsibilities
- Firms in resolution should retain access to critical FMI services, if certain safeguards are met.
- An FMI should not, however, be coerced into facilitating access for a firm in resolution, if that might compromise its statutory obligations.
- An FMI should also not be tasked with ensuring the safety and efficiency of its own market as well as one of its participants simultaneously.
2. Sharing of information
- Where appropriate, relevant authorities should share information with the FMI provider, and FMIs should also be privy to the contingency plans produced by participant firms.
- Third party providers of services relating to clearing, payment, securities settlement and custody activities - such as middleware IT services - should also be included within the scope, to ensure a level playing field with FMIs, FMI intermediaries and participants.
Nandini Sukumar, CEO, WFE, said: "The WFE is encouraged by the FSB's approach to this issue. Ensuring the safety and orderliness of its own markets and participants, which supports the broader financial system, should be the continuous, core aim of an FMI. However, this should not be at the expense of that FMI fulfilling its statutory obligations."
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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. 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's post-trade mandate is one of the four pillars of its work, and is led by its Post-Trade Working Group of technical experts from CCPs globally (the WFE's PTWG). The WFE fulfils its mandate through a combination of policy responses to global regulatory organisations such as IOSCO, BCBS and FSB, and through educational services to its members, many of whom come from smaller, emerging markets as well as the world's largest CCPs and exchanges. The WFE forges consensus globally among CCPs on the issues that matter, and creates industry-led codes of conduct, guidelines and standards as part of its endeavours to improve systemic stability, integrity and quality.
WFE exchanges are home to nearly 45,000 listed companies. The WFE promotes the development of fair, efficient and transparent markets. It works with policy makers, regulators and standard-setters around the world to support the development of effective rules and standards for exchanges and market participants. For more information, please visit: https://www.world-exchanges.org
For more information, please contact:
Head of Communications, World Federation of Exchanges
Phone: +44 20 7151 4137 / +44 7850 287 685