WFE Comment on “Regulatory Issues Raised by the Impact of Technological Changes on Market Integrity and Efficiency

Executive Summary : 

The WFE especially welcomes this IOSCO public consultation given the importance of innovation for markets, and the need for its greater understanding. 

Exchanges believe that they can provide useful insight thanks to their front line role in monitoring, detecting and preventing market abuse, as well as in developing technology. 

The WFE appreciates the difficulty to deal properly with microstructure phenomena in isolation without considering the overall market structure. The absence of a level playing field in regulation among trade execution venues is one example. 

This level of fragmentation impairs the ability for listed companies to understand the market in their shares. It weakens the trust in capital markets; it diminishes the capacity of exchanges in raising capital to promote economic growth.

Report Date: 
Fri, 08/12/2011