The World Federation of Exchanges Responds to Europe's MiFID II Consultation

London, 20 May 2020 – The World Federation of Exchanges (“WFE”), the global industry group for exchanges and CCPs, has responded to the European Commission consultation on the review of the MiFID II/MiFIR regulatory framework, representing the global industry’s position on proposals for a consolidated tape in Europe, the Share Trading Obligation’s impact on Third Countries and the regime governing Systematic Internalisers.

Some of the highlights include:

1. The consolidated tape: The WFE’s position is that a post-trade tape of record represents the only consolidated tape which has a clear use case and would be likely to be viable in terms of costs and benefits.
2. Market Data: The WFE remains concerned that the consumers of market data are using the prospect of an EU consolidated tape not to further the interests of end-investors, but rather their own commercial interest through regulatory price controls.
3. The share trading obligation: The WFE’s view is that third-country venues and shares are important to the European financial market value chain. Therefore we suggest a balanced mechanism for excluding them from the share trading obligation, while bringing in EU listings from third-country.
4. The regime for spot FX: We encourage the European Commission to refrain from making changes to the regime for spot FX in the context of the ongoing implementation of the Global Code.

Nandini Sukumar, Chief Executive Officer, the WFE said: “Europe is an important region. Exchanges and CCPs around the world believe that the market structure being created as a result of MiFID II will influence capital market development around the world. As such it’s important to get it right, especially at a time when we are confronting a global recession and the difficult task of rebuilding economies.”

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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 over 250 market infrastructure providers, including standalone CCPs that are not part of exchange groups. Of our members, 35% are in Asia-Pacific, 45% in EMEA and 20% in the Americas. WFE’s 57 member CCPs collectively ensure that risk takers post some $800bn (equivalent) of resources to back their positions, in the form of initial margin and default fund requirements. WFE exchanges are home to nearly 53,000 listed companies, and the market capitalisation of these entities is over $93 trillion; around $88 trillion (EOB) in trading annually passes through WFE members (at end 2019).

The WFE is the definitive source for exchange-traded statistics, and publishes over 350 market data indicators. Its free statistics database stretches back more than 40 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 policy makers and regulators in an open, collaborative way, reflecting the central, public role that exchanges and CCPs play in a globally integrated financial system.

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