What changed in your business over the last year and what was your biggest achievement?
It was a challenging year for our industry. The ongoing Ukraine war, rising inflation and interest rates, and the unexpected outbreak of the conflict between Israel and Hamas all led to even more uncertainty in global capital markets, leaving investors on the sideline. So, instead of high volatility and volumes, the markets stayed quiet – in fact, trading volumes are at their lowest levels for 12 years. This is a situation that affects the whole of Europe.
Despite all of these circumstances, we were able to grow our business and compensate for the low trading volumes with our diversified business model, which once again has proven its worth.
In the exchange space, we made good progress with our SIX Digital Exchange, were able to onboard various new banks and just launched a pilot together with the Swiss National Bank to issue wCBDC in Switzerland.
We also launched a new trading segment in Spain – BME Scaleup – a new market aimed primarily at scale-ups. BME Scaleup perfectly complements our offer for all types of companies that want to be listed and financed through the capital markets, together with the Pre-Market Environment initiative, from which six companies have already entered the market, and BME Growth, the SME stock market that has welcomed 10 new companies in 2023, and which can serve as a springboard to the main market.
In Switzerland, we’ve introduced new services and order types, like Auction Volume Discovery, all helping to defend and maintain our market share.
What is your most important project this year (regulatory or otherwise)?
We have various important projects for this year. We are about to launch our joint venture exchange, AsiaNext, in Singapore with our partner, SBI Digital Holding.
We are also closely following the developments of the T+1 settlement scenario. In the U.S., the transition and migration to the new settlement cycle T+1 is set for May 2024. We’ll have to closely assess the impact in Europe of the changes in the United States and the possible regulatory initiatives to be taken in the European Union to ensure the competitiveness of our markets vis-à-vis the American market. Nevertheless, we are supporting our clients in the U.S. for a successful migration.
In terms of regulation there are many projects that will affect our businesses in Switzerland and in Spain. MiFIR, Listing Act, CSDR, Emir 3.0, Emir REFIT, EU Taxonomy and the Corporate Sustainability Reporting Directive are just a few of the upcoming regulations that will keep us busy.
What are you most excited for in 2024?
Our pipeline of companies ready to go public is very strong, partly because IPOs have been rare in recent years, especially since the onset of Covid. In fact, it's one of the strongest pipelines ever – we are talking a double-digit number - but it needs to materialize. Some companies are ready to take the plunge, but they are waiting for the right time. We hope this will be the case in the first half of 2024. Everyone is waiting for a favourable environment and a trailblazer IPO to get the machine going again.
What are your biggest opportunities?
We are expanding our reach in different business units and continue with our growth strategy in the US and APAC on Securities Services and Financial Information products and services. I am very optimistic that we can support our clients wherever they expand their businesses.
Also in Asia, with SDX and our AsiaNext joint venture I am convinced that we can drive innovation forward even further. Digital assets are still somewhat nascent in terms of usability and habit in the financial space. We are very well set up and have laid a very promising foundation for success.
In Europe, we are preparing ourselves to help our customers to fulfil new regulations like Emir REFIT, CSDR or Emir 3.0. We see opportunities in the diversification of our clearing services in the region.
What do you see as the key themes and trends for your exchange and market infrastructure in 2024?
I fear that the political conflicts will continue to have a strong impact on macroeconomic developments and therefore on our industry in the coming year.
We also know from our latest Future of Finance study that artificial intelligence will be one of the driving topics. According to our latest annual survey that canvasses the opinions of senior executives across 343 financial institutions across the world, identifying and implementing artificial intelligence (AI) use cases is seen as the most compelling opportunity for companies (38%).
At SIX, we recognize the transformative power of AI and its potential to drive innovation across all facets of our operations. Internally, we have various AI-applications in use and are constantly developing new ones to increase our productivity. We also use AI tools to offer our customers higher quality products and services. Here, too, we are constantly expanding our offering.
Enhancing high quality data and analytics capabilities (35%) and the opportunities presented by alternative asset classes are also important themes.
Of course, we will continue to focus on sustainability, with the launch of our ESG products. In 2023, for example, we launched the IBEX ESG index family in Spain.
Other key themes will be SMEs’ access to financial markets, which we consider crucial and will continue to push for in Switzerland and Spain, and also the growing interest of investors in digital assets, but in secure and reliable environments, which only regulated market infrastructures such as SIX can guarantee. So, 2024 will be another busy year for us.
The views, thoughts and opinions contained in this Focus article belong solely to the author and do not necessarily reflect the WFE’s policy position on the issue, or the WFE’s views or opinions.