The WFE is the association of 54 regulated exchanges around the world. We develop and promote standards in markets.

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• An exchange as 2012 begins

  

  The financial services sector was tested last year: by clients looking for secure investments and efficient, effective trading solutions, by regulators scrutinizing “speculation,” short selling, and systemic risks, and by the general public protesting bailouts or financial conditions. In 2011, they came to exchanges with their questions – sometimes literally. Beyond their well-known brands, and beyond being symbols for business and wealth creation, why would an exchange be the focus of this attention? Was this a misguided or outdated concept about markets? In recent years, what was once a relatively homogenous group of market operators is now a diverse group of companies. The differences continue to expand between exchanges in key areas of business and strategy. In a global market vying for investment, the competitive landscape differs from one jurisdiction to another. For some, competing in fragmented markets means operating your own dark pools, ECNs, ATSs and other execution venues; for many, the responsibility for overseeing the quality of their markets, the integrity of trading and the vetting of listed companies was impacted from years of deregulation; and for most, the investments in technology are vital to attract liquidity to transparent markets.

  30 January 2012

• An examination of transparency in European bond markets

  

  The European Commission’s overhaul of securities markets regulation in Europe intensified with the recent publication of legislative proposals for the revised Markets in Financial Instruments Directive and Regulation (MiFID and MiFIR, respectively). The legislative package, currently under negotiation in the European Parliament, puts transparency at the forefront with ambitious proposals to shed light on trading in practically all financial instruments –— from equities to bonds, derivatives, and even emissions trading allowances.

  30 January 2012

• Quick glance at SROs in FEAS region

  

  An average Self-Regulatory Organization (SRO) looks like a rather unusual animal with elephant’s feet, tiger’s body, giraffe’s neck and rooster’s head. Instead of trying to identify “an average” strange creature, we should, in fact, accept the fact that SROs are so diverse that some are as big as an elephant, while others are as fierce as a tiger, or as farsighted as a giraffe and some even give wake-up calls like a rooster. To begin with, exchanges, industry associations, central clearing and settlement institutions can all be SROs or can have some sort of a self-regulatory function. Obviously, the focus of these institutions would be different from one another. Second, the level of authority, the range of activities, financial and human resources of the SROs differ quite significantly. In other words, the concept of a “Self-Regulatory Organization” is too broad to address the entire range of activities properly. Therefore, we should create a distinction between Self-Regulatory Associations (SRA) and Self-Regulatory Exchanges (SRE).

  19 December 2011

• Growing need for innovative SME exchanges in Europe

  The need for well‐organized and innovative exchange solutions for small and medium sized companies (SMEs) in Europe and the western world is becoming more apparent than ever. The ongoing global financial crisis has triggered an acute lack of funding that has severe effects on the SME sector. This money draining is induced by banks holding out on traditional loans and is coinciding with the investor community trying to reduce risks by moving towards interest-bearing financial instruments, such as large cap corporate bonds.

  19 December 2011

• The Case for Protecting the Options Markets from Internalization

  

  Imagine a car with no brakes. If it is traveling along a long, straight highway with no other traffic, the ride could continue indefinitely without any issues. What would happen if the highway ends? The inevitable crash is akin to the “flash crash” that affected the market on May 6, 2010. To call it a “flash crash” is somewhat of a misnomer. Yes, the market dropped precipitously and rose again in rapid succession. In that sense, the events did happen in a flash. The factors that contributed to the market shock, however, have been in the making for over a decade. Many of us knew that the car was running without brakes. We just did not yet know when the highway would end until that day.

  29 November 2011

• Regulation and Price Formation in Canada - Vigilance Required!

  

  Canada’s equity market has a history of respecting the role played by retail clients in the price discovery process. Although rules have been in place for some time that aim to preserve liquidity on Canadian equity exchanges, the creation of dark pools and dark order functionality has chipped away at the protection provided by these rules. Recent proposals address gaps in the rules that have allowed order flow to migrate away from lit marketplaces. This article can serve as a guide to those in other jurisdictions who wage the battle against internalization. For this purpose, the following information is provided:

  29 November 2011

• Keynote address by Finance Minister at the WFE 2011 General Assembly and Annual Meeting

  

  Exchanges in their current form can be traced back to Amsterdam, with the creation of an exchange to trade shares in the Dutch East India Company. An in 1652, it was this very company that established a trading post in the shadow of Table Mountain, changing the course of South African history, for better and for worse.

  24 October 2011

• 2011 WFE Award for Excellence recipient Mervyn King's acceptance speech

  

  The World Federation of Exchanges is an association of excellence. Included, of course, is the Johannesburg Stock Exchange which in the latest global competitiveness report of the World Economic Forum, was once again placed first in terms of market regulation. In this context of excellence it is indeed an honour that the WFE should make me the recipient of an Award of Excellence in recognition of the work I have done in leading national commissions on Corporate Governance, especially the South African commission, and for driving forward integrated reporting which is better suited to the changed world in which we live. I acknowledge the role of the many I have led in the various commissions, the GRI and the IIRC in promoting the ideal of integrated reporting.

  24 October 2011

• The long, promising evolution of screen-based trading1

  

  Transparency used to be for a very limited group. In the old world, the public never saw the limit order book. The best that traders and investors could see was the last trade, and they might be told the current bid and ask in the pit. Of course, specialists at stock exchanges held the order books for their stocks, which meant that they were the only market participants who could see them. Big floor brokers in the futures markets would see the portion of the order book created by their own customers’ orders, so again they had an exclusive view of at least the piece of the order book for the futures contracts they filled orders for.

  26 September 2011

• High-frequency trading: Better than its reputation?

  

  Over the past years, high-frequency trading has progressively gained a foothold in financial markets, enabled and driven by an interplay of legislative measures, increased competition between execution venues and significant advances in information technology.

  26 September 2011