London, Monday 30 March 2020 – The World Federation of Exchanges (“WFE”), the global industry group for exchanges and CCPs, has today issued a statement on Market Infrastructure (MI) Business Continuity Planning.
As a community, market infrastructures are both prepared and focused on ensuring the regulated markets remain open, resilient, reliable and consistent at this time of crisis. This is our focus in the daily course of business – WFE exchanges alone are home to nearly 53,000 listed companies, the market capitalisation of these entities is over $93 trillion, and around $88 trillion (EOB) in trading annually passes through WFE members.
Market infrastructures daily operate fair, orderly and transparent public markets with all the business continuity planning and processes that support such an operation. Indeed, this has been demonstrated time and time again, including in 2008 when our industry stepped forward to secure the system in the wake of the bank-led crisis triggered by the Lehman Brothers bankruptcy.
As an industry we understand the G20’s concerns and support their conclusion that there is still work to be done to make the system safer, especially around aspects of the OTC derivatives market. Hence we remain focused on ensuring that the exchange-traded market remains that haven and place of safety for investors, companies and policymakers alike.
In this spirit, and with the aim of offering customers information regardless of whether we are legally bound to do so or not, market infrastructures have been making disclosures regularly, both through individual efforts and as a community. This is, of course, in addition to the information they are providing their own regulators and central banks, those being the entities that authorise, license and check their preparedness in each jurisdiction and monitor their efforts in real-time.
The WFE is coordinating globally, where appropriate, the information-sharing that market infrastructures are making to their stakeholders, and has taken a lead in addressing stakeholders in response to recent market volatility and Covid-19. To this end, we have created a comprehensive repository of the rolling updates of exchange and CCP efforts. This can be found on our website and we encourage you to sign up for regular updates.
In addition to the robust business continuity planning measures and investments that MIs have made, the industry collaborates on this topic at the WFE’s Enterprise Risk Working Group. You may wish to refer to their recently published benchmarking exercise on Organisational Structures for Enterprise and Operational Risk. Separately but in tandem, the WFE’s Cyber Security, CCP and Physical Security Working Groups are also working during this crisis with similar models.
Market infrastructures around the world recognise their responsibility not only to issuers and market participants, but to the economies they serve and society at large. We believe that with appropriate action, information-sharing and vigilance, along with a fundamental focus on market integrity and investor protection, we will be able to come through the current crisis.
As a community, we look forward to helping your member firms as they attempt to gain greater resilience and answer their own supervisor’s questions.