Cartagena, Colombia, 2 November 2016 – The World Federation of Exchanges ("WFE"), which represents more than 200 market infrastructure providers including exchanges and CCPs, today held a roundtable to discuss how best to grow liquidity in emerging market exchanges.
The session – entitled Enhancing Emerging Market Liquidity - follows the joint WFE-Oliver Wyman paper on the issue. It took place at the 56th WFE General Assembly & Annual Meeting in Cartagena, Colombia. Arunma Oteh, Treasurer and Vice President of the World Bank, spoke at the roundtable and reflected on the paper, as did regional regulators including the Financial Superintendence of Colombia, and the Comision Nacional de Valores de Argentina.
The report, first published on 13 October 2016, identified three key areas that exchanges and regulators can focus on to grow liquidity:
- Promoting the development of a diverse investor base;
- Increasing the pool of securities and associated financial products; and
- Investing in the creation of an enabling market environment.
Nandini Sukumar, CEO, WFE, said: "It is particularly exciting to be presenting these findings in Colombia, one of the most interesting emerging markets in the world. This report sets out a practical framework that regulators and exchange operators in emerging markets may be able to use, to grow and enhance market liquidity. Liquidity is the biggest issue for most emerging markets. It is positively associated with broader market development, often resulting in encouraging effects for the underlying economy."
Daniela Peterhoff, Partner, Global Head of Market Infrastructure, Oliver Wyman, said: "We believe the ideas to emerge from the paper offer actionable solutions to tackle the issue of low levels of liquidity often suffered by many emerging markets. Ultimately each jurisdiction needs to weight those levers most suitable in its specific ecosystem, and mobilise key stakeholders accordingly."
The report was written in collaboration with Oliver Wyman, using its experience in a variety of markets; additional WFE data; and interviews and case studies of some WFE emerging market exchanges.