Athens Exchange Group (ATHEX) recently hosted the 58th WFE General Assembly & Annual Meeting (GA&AM) in Athens. Please tell us about the importance of this annual forum to the global market infrastructure industry?
The fact that in the recent WFE GA&AM in Athens, for the first time, almost 100 exchanges and CCPs were represented, is extremely important for the industry and for ATHEX as a host. Irrespective of our shareholder structure and our local market focus, we all share common goals and we face similar opportunities and threats.
The contribution of exchanges to fostering a better marketplace - fostering the sustainable growth of the economy, investing in technology and automation for increased transparency, better surveillance and improved market integrity and trying to make the ecosystem adopt better corporate governance standards - are not always easily recognised by the public and the wider ecosystem. Therefore, hosting the heart and voice of the exchanges industry in Greece has been crucial for passing such a message more clearly.
A major example of that effort is how exchanges are trying to improve SME access to finance through dedicated markets.
The theme of this year’s GA&AM was renewal, and it’s fair to say that Greece is emerging from the financial crisis into a period of hope and renewal. What is the role of ATHEX in that process?
Promoting good governance in business practices, through the promotion of greater disclosure from its listed companies, including Environmental, Social & Governance (ESG) disclosure adoption; and mobilising foreign and domestic portfolio flows, for sustainable economic growth and development are the key roles of ATHEX in the renewal process of Greece.
With a banking system that continues to deleverage, and with SMEs forming the backbone of the Greek economy having a much higher weight - in terms of employment and added value - than the equivalent EU average, the role of ATHEX is to make the Greek capital market truly complementary for funding issuers that are willing to understand and abide with the rules of the public markets.
With foreign investors participating with more than 60% in terms of both market capitalisation and daily traded volume, the key for success is to assist the issuers to communicate successful possible investment stories in appropriate risk–return characteristics. It is also important to communicate to the local ecosystem and central government the need for provision of motives for patient risk capital, as domestic flow needs to precede international flow.
Please tell us more about ATHEX’s strategic goals for the next five years.
The strategic goals of ATHEX can be categorised under three axes:
- Smart and efficient adaptation to regulatory changes;
- Business development for new services and products, focusing on capital raising of markets capacity;
- Cooperation to upgrade and re-use existing systems and know-how in different products and similar services.
Under the first axis, ATHEX needs to adapt its licensed under MIFID II/MiFIR, EMIR and CSDR systems, processing services so that it decreases cost and risk, and increases efficiency. As the regulatory changes seem to increase, this process needs to be continuous and forward looking so the Group is able to compete in the new environment. An example of such smart design is to make efficient use of our business and IT competiveness in offering segregated account CSD services for the incoming SRD II, AIFMD and AML IV increasing transparency requirements. Also, the fact that we operate a vertical structure within the eurozone needs to be further leveraged for achieving cost containment and operating excellence.
Under the second axis, it is extremely important to strengthen our SME offering through pre-IPO services, appropriate products and services, and enhanced liquidity in junior markets. An example of this is the Centralised Book Building service that brings together our trading members, our clearing members, our custodians and the network, allowing for bidding, auctioning, clearing, settlement and registry of the securities (both equities and bonds) in a seamless, STP environment. It is due to that service that we have managed to create a mini-bonds market with more than 11 issuers and close to €1bn bonds within a year. We need to extend the network and use this service for more SMEs and larger companies’ needs.
Finally, under the third axis we intend to enhance co-operation with other infrastructures that share our vision for joining forces, to create a more efficient marketplace. We have learned a lot in designing and implementing our own systems, processes and products in adverse financial circumstances so will be able to assist our issuers and members. Moving from frontier to emerging and to developed market status has been a major experience which can be shared, and from which win-win opportunities can arise. Products and services such as our common platform with Cyprus Stock Exchange, our XNET platform for providing access to foreign markets for our network, and our experience in creating auction systems and platforms for energy exchange can be shared with willing partners.
Most of all, we believe that exchanges, CCPs and CSDs can co-operate to create a strong and efficient network that will allow cross-border investments to occur for the common benefit of the central platforms and their users.