WFE statement comes as G20 Finance Ministers meet in Japan to discuss market fragmentation 

London, Tuesday 4 June 2019 – The World Federation of Exchanges (“WFE”), the global industry group for exchanges and CCPs, has today published a statement entitled ‘Financial Stability through International Regulatory Coherence’ which discusses cross-border fragmentation arising from unjustified dissonance between jurisdictions’ financial services regimes.

Promoting international regulatory coherence is a strategic priority for the Federation. The WFE’s statement comes days before the G20 Finance Ministers and Central Bank Governors Meeting (8-9 June, Fukuoka), where market fragmentation will form a key part of the agenda. The paper is intended to encourage progress in this area and help shape thinking about solutions. It makes a call to G20 members to enhance transparency, engagement, and accountability via international standard setting bodies, as a means of creating more robust mechanisms to achieve international regulatory coherence.

Specifically the WFE proposes the G20 takes the following actions:

  • Enshrining transparency and due process in an international agreement with a commitment to overcoming international regulatory divergence, avoiding regulatory competition, and censuring politically motivated dissonance;
  • Creating flexible new mechanisms for the escalation and resolution of regulatory dissonance;
  • Embedding international regulatory coherence in the mandates of national authorities;
  • Reporting by ISSBs on addressing financial market fragmentation; and
  • Enhancing dialogue between international standards setters, national policymakers, stakeholder groups and civil society through a structured framework.


Today’s WFE statement, which follows on from its November 2017 paper on international regulatory dissonance, can be summarised as follows:

  • International regulatory fragmentation adds costs, slows innovation, impedes competition, and reduces choice and risk diversification for investors. It may also lessen the resilience of financial markets as a whole, by reducing the scope for risk diversification.
  • It is right that jurisdictions manage risks through rules tailored to their local financial system; however, the means of doing this tailoring should be consistent with agreed global frameworks.
  • Cross-border regulatory co-ordination and deference to comparable standards improves supervision and reduces systemic risk.
  • Crypto assets are an area that would benefit from forward-looking international regulatory standards, to promote investor protection and reduce the possibility of regulatory arbitrage.


Nandini Sukumar, Chief Executive Officer, WFE said: “We welcome the G20 focus on the topic of cross-border financial market regulatory fragmentation, under the Japanese G20 Presidency. The WFE believes that global regulatory coherence can and should be improved, both in substantive and procedural terms. It remains vital to the effectiveness not only of exchanges and clearinghouses but financial services more generally and the wider economy that they support.

“A significant role can and should be played by the international standard-setting bodies, which already provide an outstanding forum for consensus on issues of customer protection, market integrity and systemic stability, all of which provide the bedrock for economic growth. Moreover, these bodies are well placed to address emerging trends, such as digital assets, as well as issues arising from traditional markets.”

You can read the full WFE statement here.

Tags: cross-border


For more information, please contact:

Cally Billimore
Manager, Communications
Email: [email protected]
Phone: +44 7391 204 007
Twitter: @TheWFE