The WFE is the global industry group for exchanges and clearing houses (CCPs) around the world. We represent over 250 market-infrastructures ranging from those that operate the largest financial centres to those that run frontier markets.
Founded in 1961, the Federation was set up to contribute to "the development, support and promotion of organised and regulated securities markets in order to meet the needs of the world’s capital markets in the best interests of their users." This remains the WFE mandate today.
Of our members, 34% are in Asia-Pacific, 45% in EMEA and 21% in the Americas. WFE’s 91 member CCPs collectively ensure that risk takers post some $1.3 trillion (equivalent) of resources to back their positions, in the form of initial margin and default fund requirements. WFE exchanges are home to 57,656 listed companies, and the market capitalization of these entities is over $101.17 trillion; around $146.29 trillion (EOB) in trading annually passes through WFE members (at end 2022).
The WFE seeks to ensure regulatory outcomes that foster well-functioning capital markets and reinforce systemic stability in addition to developing markets. Together with our members we create and agree best practices and standards for the industry.
We engage on policy issues that touch the structure of markets.
We educate our members on issues that might affect them now or in the future.
We publish data-driven, empirically-led research on relevant issues.
We represent both exchanges and CCPs to ensure a holistic and intelligent view of markets.
We work specifically to develop markets in earlier stages of growth.
We are the voice of regulated exchanges and CCPs around the world.
WFE conducts its work through several Board and Member committees and Working Groups. The committees meet regularly, set the agenda for the Committee and contribute to the output. The WFE Office supports each Committee.
The World Federation of Exchanges officially began operating in London on 12-13 October 1961.
The Conference of European Stock Exchanges was the original name of the organisation, whose foundation followed hot on the heels of the European Common Market set up by the Treaty of Rome in 1957 during the golden age of optimism about the value of international cooperation.
In the preamble to the statutes setting up the organisation, the founding members made clear what the WFE was all about:
“Whereas, it was considered beneficial to have a more formal organization of organised stock exchanges, the Amsterdam Stock Exchange, the Brussels Stock Exchange, the London Stock Exchange, the Luxembourg Stock Exchange, the Madrid Stock Exchange, the Milan Stock Exchange, the Paris Stock Exchange, the Vienna Stock Exchange and the Association of Swiss Stock Exchanges have decided to create an International Federation of Stock Exchanges.”
While European political integration in the late 1950s provided the trigger for the foundation of what is now known as the World Federation of Exchanges, the organisation quickly expanded beyond its original European member exchanges. To reflect this, the original title of the organisation was soon changed to a more global one, La Federation Internationale des Bourses de Valeurs (FIBV).
Article 2 of the founding statutes set out what the founding fathers thought should be the main purpose of the association:
“The purpose of the Federation is to contribute to the development, support and promotion of organised and regulated securities and derivatives markets, in order to meet the needs of the world’s capital markets in the best interests of their users.”
Member exchanges defined common aims, produced statistics and studies, and provided a forum for international exchange leaders to meet and discuss the common commercial and regulatory issues confronting them all, and to share new perspectives on them.
Statistics remain a core competence of the WFE and its market data are regarded as the definitive measure of exchange-traded equity, derivative and bond market volumes as well as of market capitalisation. The current team continues this tradition today.
In 1975, James Needham of the New York Stock Exchange began the WFE’s first Advisory Committee meetings and launched the organisational structure which in broad terms persists to this day.
This first meeting was held in January 1976 and was composed chiefly of past presidents of the federation, the chairman of the Working Committee, and other exchange officials and veterans. The main purpose of the committee was to review the WFE budget and determine topics for the annual meeting and general assembly.
By the late 1980s, the Advisory Committee was meeting three times per year, a rhythm largely recognisable today in the WFE’s Board of Directors; and was setting a substantial agenda of subjects of common interest to the exchange industry.
Membership continued to grow. Short workshops and working groups or subcommittees had become a regular feature of the WFE, and the then Secretary General Jeanne Abbey was representing the exchange industry before international organisations.
From the beginning, best practice was core to the WFE. Indeed, gaining admission required – and still does to this day – the satisfaction of criteria demonstrating the quality of the applicant exchange’s market operations and its regulatory structure.
While the establishment of the WFE pre-dated that of many of today’s global financial policy bodies, the WFE publicly endorsed the establishment in 1983 of IOSCO – the global grouping of securities market regulators – and its Principles of Regulation, and the OECD’s Principles of Corporate Governance. Similarly, the WFE has supported the vital and ongoing work on International Financial Reporting and Audit Standards.
From the start, the WFE ethos has been based on the idea that sound global regulatory standards must underpin the spread of a more globalised financial system and markets.
When John J. Phelan of the NYSE became President of FIBV in 1991, the Committee was renamed the ‘Executive Committee’ and also took on members who had not been past presidents for the first time. More importantly still, the geographical representation of the WFE spread beyond the European origins of the organisation.
In the mid-1990s this global spread of the organisation started a debate over how to broaden the representation on the Executive Committee, in order to better reflect this growing global diversity.
The upshot of these discussions was an Executive Committee composed of 14 members split across three time zones, as well as the abolition of any permanent members. The offices of president, vice president, and chairman of the Working Committee were to rotate on a two-year basis across the three broad member time zones.
Over the past six and a half decades, the WFE has helped its members weather some of the most far-reaching transformations in the history of public exchanges. These dramatic changes included the deregulation of fixed commissions and demutualisation, as exchanges responded to competitive pressures from the global investment banks, and the need to provide better services to their customers.
Other changes which revolutionised the industry included the launch and exponential growth of financial futures in the 1970s, and the development of screen-based trading in the 1980s as many exchanges moved to end pit-trading and open-outcry, leaving many traditional trading floors severely depleted or outright abandoned.
In the early 1990s many former communist countries in Asia and Eastern Europe also set up their own national exchanges – some for the first time, seeing exchanges as a key element in the building of a market economy, or even an essential attribute for any new nation. Many of these are now full members of the WFE.
In 2001 at the Annual Congress in Madrid, the federation took on what remains its name today, the World Federation of Exchanges (WFE).
In addition, the name ‘Executive Committee’ was dropped in favour of ‘Board of Directors’ in order to reflect the strict sense of oversight - of membership development, budgets, Secretariat functioning, and the business agenda for meetings, special events, statistics and studies - that the organisation sought from its leaders.
In October 2002, the General Assembly approved a proposal to increase the number of directors to 15. This also involved an even split of the members across the three major time zones. The changes also included a measure enabling the president to cast the deciding vote during board meetings.
The continuing rapid pace of market transformation and regulatory change have posed challenges and opportunities for the WFE’s members since the turn of the new millennium. They include the rise of high-frequency trading, the growth of OTC markets and dark pools, fragmentation of price discovery and liquidity, innovation in financial technology and the associated emergence of new trading venues which pose a competitive challenge for publicly regulated exchanges.
The financial crisis of 2007-08 and the collapse of Lehman Brothers demonstrated the resilience and robustness of many exchanges, which remained vital sources of market liquidity and funding for the real economy as the inter-bank market and bank lending to businesses collapsed. At the height of the crisis, along with the central banks, exchanges remained a vital source of funding for the world economy, as of course they do today.
The G20 put publicly regulated exchanges at the centre of their plans to reform the global financial system, to make capital markets more transparent, stable and certain. Policymakers insisted that trades of some OTC instruments would henceforth have to be centrally cleared.
The WFE moved to London at the start of 2014. A key motivation for the decision was the need to be closer to major customers and stakeholders.
The WFE has seen its mandate expand over the past five years, to encompass advocacy, research, and post-trade, as well as its education and emerging markets remit. Its work now positions it as the voice for the global market infrastructure industry.
The WFE has also seen its membership grow significantly in recent years. From its founding 10 exchanges and exchange associations in 1961, the WFE now represents more than 200 market infrastructure providers of all sizes, from every corner of the world.