The WFE Publishes Open Letter on Cross-border Fragmentation in Sustainability Regulation

 

PRESS RELEASE

The WFE Publishes Open Letter on Cross-border Fragmentation in Sustainability Regulation 

London, 2 June 2026 – The World Federation of Exchanges (WFE), the global industry association for exchanges and clearing houses, has today published an open letter highlighting the barriers to capital movement caused by fragmented sustainability regulation. 

The Federation is calling on forward-looking, innovative, regulators, governments and related bodies to take urgent and coordinated action to address cross-border fragmentation in sustainability regulation, for the benefit of investors, issuers and the exchanges that serve them. 

Fragmented regulation hinders global growth by duplicating costs, erecting barriers to cross-border expansion, and diverting capital away from substantive sustainable outcomes toward formal compliance. The global fragmentation that currently exists in sustainability regulation creates significant costs for exchanges, listed issuers and investors operating across multiple jurisdictions and undermines their ability to manage compliance obligations efficiently. These costs impact businesses’ bottom lines, investors’ returns and what customers pay for goods and services. 

To reduce unnecessary costs and complexity, and free up vital capital for substantive sustainability outcomes, the WFE calls on forward-looking regulators, governments and related bodies to act on four priorities when advancing their sustainability agendas: 

• Prioritise alignment and interoperability with leading global standards, frameworks and regulations; 
• Adopt principles-based, outcomes-focused approaches; 
• Provide clarity, consistency and predictability for businesses; and 
• Make use of deference and passporting mechanisms where appropriate. 

Nandini Sukumar, Chief Executive Officer of the WFE, said: “Exchanges and their issuers operate across borders and increasingly need to manage sustainability-related obligations in multiple jurisdictions. Action to address and mitigate fragmentation in sustainability regulation is urgently needed to support more efficient compliance and help provide the clarity businesses need to plan for the long term.

The WFE and its members look forward to continuing engagement with relevant Authorities on these issues.” 

The letter recommends using deference and passporting mechanisms in reducing duplicative compliance requirements across jurisdictions. These mechanisms can continue to support investor protection and market integrity without impeding the consistency, comparability and decision usefulness of outputs, the WFE says. 

Read the Open Letter on Cross-border Fragmentation in Sustainability Regulation.

For more information, please contact:

Oonagh Shiel
Communications Manager
Email: communications@world-exchanges.org

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 the providers of over 250 pieces of market infrastructure, including standalone CCPs that are not part of exchange groups. Of our members, 39% are in Asia Pacific, 41% in EMEA and 19% in the Americas region. The WFE’s 74 member CCPs and clearing services collectively ensure that risk takers post some USD 1.4 trillion (equivalent) of resources to back their positions, in the form of initial margin and default fund requirements. WFE exchanges are home to over 41,000 listed companies, and the market capitalization of these entities is over $137 trillion; around $198.5 trillion in trading annually passes through WFE members (at end-2025). 

The WFE is the definitive source for exchange-traded statistics and publishes over 350 market data indicators. Its free statistics database stretches back 50 years and provides information and insight into developments on global exchanges. The WFE works with standard-setters, policy makers, regulators and government organisations around the world to support and promote the development of fair, transparent, stable and efficient markets. The WFE shares regulatory authorities’ goals of ensuring the safety and soundness of the global financial system. 

With extensive experience of developing and enforcing high standards of conduct, the WFE and its members support an orderly, secure, fair and transparent environment for investors; for companies that raise capital; and for all who deal with financial risk. We seek outcomes that maximise the common good, consumer confidence and economic growth. And we engage with policymakers and regulators in an open, collaborative way, reflecting the central, public role that exchanges and CCPs play in a globally integrated financial system. If you have any further questions, or wish to follow-up on our contribution, the WFE remains at your disposal. ^[1] 

Website: www.world-exchanges.org

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^[1] Our EU Transparency Register number is 973382524675-69

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