CEO Letter - April 2019

By: , Apr 2019

Dear Colleagues,

Welcome to the April issue of Focus, a bumper edition with the latest news and updates from the WFE.

We kicked off April with the 36th IOMA: WFE’s Clearing & Derivatives Conference 2019 in Mumbai (2-4 April), and enjoyed three lively days of networking, debate and discussion. We would like to take this opportunity to sincerely thank our gracious hosts National Stock Exchange of India (NSE) who welcomed us so warmly. Not only did delegates take away valuable insights following the various panels, fireside chats and debates, but the cultural programme also allowed us a glimpse into the rich and vibrant cultural heart of India. Thank you.

We are delighted to welcome a number of IOMA speakers and guests to the magazine this month.

We start with IOMA host Vikram Limaye, Managing Director & Chief Executive Officer, NSE in the Executive Profile section. Mr Limaye talks eloquently about the importance of IOMA to the global market infrastructure industry, and outlines his strategic vision for the exchange, focusing on stakeholder relationships, market development, international collaborations, and SMEs, amongst other goals.  

We are also delighted to welcome his colleague, Vikram Kothari, Managing Director, NSE Clearing, both host and panellist from IOMA this month. Mr Kothari’s role at the head of the exchange’s CCP gives him an unparalleled view of the key issues impacting CCPs today. In his article, Mr Kothari shares his viewpoints on the ever-present topic of CCP Resilience, Recovery, and Resolution (R3).

This month's issue features a complementary perspective on the importance of the three Rs by Eva Hüpkes, Acting Head of Regulatory and Supervisory Policies, Financial Stability Board Secretariat and IOMA panellist, although this time, her first R stands for ‘Resources’. Eva tackles the topic through a regulatory lens, concluding that as the largest CCPs are becoming increasingly systemic and interconnected across borders, authorities are responding to the need for effective crisis management and resolution arrangements for CCPs.

In a second regulatory perspective, Tan Boon Gin, Chief Executive Officer, Singapore Exchange Regulation writes that the new risks that have emerged since the last financial crisis are making their way onto regulators’ agendas, as it becomes clear that in order to ensure that CCPs remain resilient, it is equally important to manage both non-default as well as default risks.

Michael McClain, Managing Director & General Manager, Equity Clearing and DTC Settlement Services, The Depository Trust & Clearing Corporation (DTCC) took part in the first panel of the conference on the future of CCPs, and much of the discussion focused on the WFE and Oliver Wyman report launched at IOMA which looked at this same topic (you can read ‘The future of clearing’ here). In his piece, Michael reviews the key themes to come out of his panel session and the conference as a whole, and examines the interconnectedness of the clearing system.

We also feature a piece from Jon Cherry, Global Head of Options, Northern Trust, Capital Markets, who took part in the margins panel at IOMA. In his article, Jon talks about the importance of finding the right brokerage partner for institutional investors who are looking to include listed options in their portfolios.

Our final IOMA contributor is Joseph Portelli, Chairman, Malta Stock Exchange (MSE). Joseph, who took part in the crypto-assets session, looks ahead to IOMA 2020, which will be hosted by MSE. He anticipates an exciting agenda for next year, including a broader discussion on blockchain and the future of digitisation and security tokens. We are already looking forward to the 37th edition of IOMA in March 2020.

In other news, we welcome Pakorn Peetathawatchai, President, Stock Exchange of Thailand (SET) who writes about the work the exchange is doing to build its digital asset platform, which is expected to be rolled out in 2020.

The WFE had the privilege of being invited to attend the latest Horasis Global Meeting held in early April 2019 in Cascais, Portugal. Its theme was ‘Capitalising the Benefits of Globalisation’ and this month, we hear from Chairman and Founder Dr Frank-Jürgen Richter about what Horasis: The Global Visions Community stands for, and its mission and vision.

The WFE’s Regulatory Affairs team has responded to a number of consultations over the past month including responding to the UK’s Financial Conduct Authority (FCA) on its guidance on cryptoassets; and the Financial Action Task Force’s (FATF) recommendations on mitigating risks associated with virtual asset service providers (VASPs).

This month, the WFE Research & Statistics team’s monthly insights piece is a Q1 2019 market overview, alongside our latest monthly dashboard and market statistics. The team also published its annual IOMA Derivatives Report, which showed that overall derivatives contracts traded in 2018 exceeded 30 billion for the first time since the WFE started publishing the report in 2005, testament to the hedging power of derivatives, and the crucial role they play in volatile markets. The team also responded to the International Organization of Securities Commissions’ (IOSCO) Growth and Emerging Market Committee (GEMC) consultation on ‘Sustainable Finance in Emerging Markets and the Role of Securities Regulators’. Finally the team published the results of the WFE's fifth annual Sustainability Survey for the 2018 calendar year capturing the nature and extent of member engagement with Environment, Social and Governance (ESG) issues in both developed and emerging markets. 

The second WFE Working Committee meeting of the year is confirmed for Wednesday 12 June in Zurich. Working Committee representatives will have received an email with registration details, so please do sign up when you can.

We are delighted to announce that registration is now open for the bi-annual WFE Technology Conference (30 June - 2 July, Umeå, Sweden) with partner Umeå University. The university has grown from strength to strength through its spirit of curiosity and interest in technology, and has an excellent track record in cultivating innovators. We therefore look forward to leveraging their deep know-how along with a roster of industry-leading speakers to provoke thought, debate and ideas as technology changes the shape of our industry and society at large.

Finally, we have begun work on the 59th General Assembly & Annual Meeting which this year will be taking place in Singapore, from 8-10 October 2019.  We will send out more details and information in due course, but in the meantime please do save the date in your diaries.

Thanks to you all for your ongoing support.