CEO Letter – June 2021

By: The WFE Focus Team Jun 2021

Welcome to June.   

As we enter our sixth month, we find ourselves thinking about two distinct themes: innovation and resilience. 

Starting with innovation and the important role of the exchange, in a thought-provoking article titled ‘Sustainability – what is the question exchanges are trying to answer?’, Adrian Farnham, CEO, LME Clear, gives us some ideas and some answers, drawing on the London Metal Exchange’s ground-breaking work on responsible sourcing. 

We also have exciting news about a new exchange for Europe. David Howson, President of Europe and Asia-Pacific, Cboe Global Markets, writes how the exchange is making its vision of pan-European derivatives a reality, delivering much-anticipated enhancements, efficiencies, and opportunities to the European market. 

Staying with the theme, we offer some perspectives on ETFs. As we saw during WFE’s recent webinar, this is a topic that draws near-universal interest. 

We feature Philippe Guillot, Managing Director and Franck Raillon, Managing Director and Senior Policy Advisor, respectively, of Autorité des Marchés Financiers. They write that the pandemic crisis has debunked the notion that ETFs may amplify market volatility in a crisis. 

We also hear from Douglas Yones, Head of Exchange-Traded Products at NYSE, who explains why he is confident that the recent boom in ETFs is unlikely to end any time soon. 

The second theme is the resilience of our ecosystem as we consider the role that our member CCPs have played in managing the Covid-19 crisis and what that might teach us for other stress events still to come.   

Writing from across the Atlantic, Robert Steigerwald, Senior Policy Advisor at the Federal Reserve Bank of Chicago, looks deeply into the salient issues of default management, recovery, and resolution in CCPs. 

Froukelien Wendt, Independent Member of the CCP Supervisory Committee, the European Securities and Markets Authority (ESMA), writes of the path ahead. CCPs in the EU handled the pandemic crisis well and ESMA will now analyse what lessons can be learned from the crisis in 2020, she says. 

The pandemic crisis has highlighted both the importance of CCPs for financial stability and the need to future-proof them with an international policy framework, says Dr. Eva Hupkes, Head of Regulatory and Supervisory Policies at the Financial Stability Board. 

And finally, we hear the voice of the buyside. Alexander Schindler, Member of the Executive Board of Union Investment, writes of trust, market shock, the key role of market infrastructure, and of a very unusual financial crisis. 

We wish you a healthy June and look forward to seeing you soon as that day grows nearer.