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The World Federation of Exchanges

WFE

The World Federation of Exchanges (WFE) is the global trade association for regulated exchanges (securities and derivatives) and clearing houses.

Lobbying Activity

Response to Supplementary pensions – review of the regulatory framework and other measures to strengthen the sector

8 Jul 2025

As discussed in our financing the future paper, there is an under-utilisation of equities in pension portfolios. In particular, we noted: Another issue lies in accounting, particularly the effects of fair value. Despite the role equity plays in financing real peoples long-term future, rules and regulations around financial markets somehow miss the bigger picture. In some parts of the world, equity finance suffers from a bias in accounting and pension schemes in particular are pushed towards bond investments. This supposedly means they match their liabilities, even though those liabilities may not crystallise until well into the future, making capital growth and dividends the more appropriate hedge. In this situation, long-term investors are if anything dissuaded from doing the right thing, by being treated as though their immediate, instantaneous solvency is more important than the principle of investing for the long term. This is a complex area and no one wants to see pension schemes truly underfunded. But to say that a pension scheme needs to have the money at hand now to pay beneficiaries twenty or thirty years in the future is a bit like forcing a parent to have their new-born childs university fees banked right now. And to suggest that pension schemes should, in effect, be forced to hold debt because it is less volatile is arguably perverse, because it ignores the real risk, namely the risk of poor returns for those who are going to retire. Debt may not even be less volatile, as the experience of UK asset owners in late 2022 shows, when their liability-driven investment strategies proved highly problematic.
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Response to Savings and Investments Union: Directive fostering EU market integration and efficient supervision

5 Jun 2025

In this statement we intend to set out the exchange industries view of the Savings and Investment Union initiative. In summary: Simplification and burden reduction are good objectives. Developing principles-based regulation going forward can help achieve this. The push to go further than international standards often harms this goal. Consolidation of financial market infrastructure should be led by market forces. Competition and fragmentation go hand in hand; it may be valuable to look again at the regulatory consistency between bilateral and multilateral venues. Central supervision of trading venues and CCPs is not a panacea that will attract investors to European markets so perhaps it should not be a priority. On the other hand, the tax-advantaged account is an excellent idea that could stimulate investment and growth. Investors, including retail investors, should be further empowered to make their own decisions and use derivatives to manage risk. A 93 page, 370 question consultation is not targeted.
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Response to Delegated Act on the adjustment of the threshold for the notification of significant net short positions in shares

11 Aug 2021

Please see attached feedback from the World Federation of Exchanges.
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Response to Digital Operational Resilience of Financial Services (DORFS) Act

12 Feb 2021

Please find attached the response of the World Federation of Exchanges to the EU Commission's proposals regarding digital operational resilience.
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Response to Delegated regulation on comparable compliance for systemically important third-country Central Counterparties

9 Jul 2020

We believe that the outcome-based orientation of comparable compliance is an important means of realising the G20 commitment to regulatory deference. In this regard, we feel that the draft legislation could be strengthened by adopting a holistic approach to comparable compliance that focuses on the achievement of policy outcomes EMIR seeks. At a minimum, to provide more clearly for an outcomes-based approach, we suggest the following amendments to subparagraph (b) of the second paragraph of Article 1: (b) the reasons why the Tier 2 CCP’s compliance with the applicable third-country framework satisfies compliance with the relevant [outcomes achieved by the] requirements set out in Article 16 and Titles IV and V of Regulation (EU) No 648/2012; Furthermore, to achieve this, we suggest the following amendments to subparagraph (b) of the second paragraph of Article 3: (b) The Tier 2 CCP complies with all [requirements under the third-country framework that are comparable to the outcomes achieved by the] relevant elements set out in Annex I to this Regulation. Furthermore, to achieve this, we suggest the following additional subparagraph in the second paragraph of Article 5: [(b) and/or, such rules or processes, if established, would be unenforceable under third-country insolvency laws;] We believe the legislative intent of EMIR 2.2 was to recognize the clear relationship between the Commission’s third-country equivalence decision and ESMA’s comparable compliance assessment; we believe greater clarity in the legislative instrument is required to achieve this. Particularly, the comparable compliance assessment for Title IV of EMIR should focus on areas where the European Commission has adopted an equivalence decision subject to specific conditions. A broader approach would be a duplicative effort on the part of European institutions and agencies, and give rise not only to unnecessary uncertainty but also the problematic possibility of a Commission agency coming to a conclusion at odds with that of the European Commission. It is unclear whether ESMA would begin tiering and comparable compliance processes in respect of UK CCPs ahead of UK’s exit from the EU; we believe this would be extremely challenging. The decision on the date of the final adoption of these Delegated Acts should therefore be taken considering legal consequences for any equivalence decision adopted before their promulgation.
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Response to Systemic importance of third-country central counterparties

9 Jul 2020

We welcome the effort of the European Commission to provide a clear nexus to the EU in the determination of CCPs which are systemically important to the Union. We believe that the policy intention could, however, be strengthened by providing additional clarity on the exclusion of non-EU entities / non-Union currencies. First, we believe that the intention of the draft legislation is to exclude sterling-denominated assets and UK-entities from threshold calculations, such as in the first paragraph of Article 6, subparagraphs (c) and (d). Given that the UK left the Union on 31 January 2020 and that from 1 January 2021 UK CCPs will be subject to the tiering regime under EMIR 2.2 as third country CCPs, the inclusion of sterling-denominated assets and UK-entities as having a per se nexus to the Union would be inconsistent with the core purpose of EMIR 2.2 to reduce systemic risk in the Union. However, given the evolving process around UK withdrawal from the Union and the lookback period built into the legislation, we believe additional clarity on the exclusion of sterling-denominated assets and UK-entities would provide welcome legal certainty. Similar clarity surrounding the exclusion of the Swiss Franc and Swiss-entities should also be given, especially as the Act has EEA relevance. It is relevant to provide legal clarity on this aspect due to previous consultations showing some confusion relating to the treatment of the Swiss Franc. This clarity is both important to give predictability and to ensure effective and uniform calculations by the actors involved. To achieve this, we suggest the addition of the following paragraph to Article 6: [3. For the purposes of subparagraphs (c) and (d) of the first paragraph of Article 6, no entity whose primary consolidated supervisor is outside the Union shall be treated as a Union entity, nor shall any currency whose primary central bank of issue is outside the Union be treated as a Union currency.] Second, in the first paragraph of Article 6, subparagraph(d) of the draft legislative instrument regarding tiering, we believe the third country CCP’s nexus to the EU could be additionally strengthened by clarifying that payment obligations in non-Union currencies are excluded. We believe that, in line with the Commission’s commitment to regulatory deference, it is the intention of legislation to exclude obligations to third country CCPs in non-Union currencies from the threshold calculation. The case for this is particularly strong for those EU entities which have central bank liquidity access and commensurate supervisory oversight from the third country in question. To achieve these aims, we suggest the following amendments to the first paragraph of Article 6, subparagraph (d): (d) The estimated aggregated largest payment obligation committed by entities established in the Union or part of a group subject to consolidated supervision in the Union, converted into EUR, over a period of one year prior to the assessment, in total for each Union currency that would be caused by the default of any one or two largest single clearing members (and their affiliates) in extreme but plausible market conditions is more than EUR 3 billion.
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Meeting with Andrea Beltramello (Cabinet of Vice-President Valdis Dombrovskis) and NASDAQ and

22 Oct 2019 · MIFID II

Response to Fair taxation of the digital economy

16 May 2018

The World Federation of Exchanges (WFE) is the global industry association for exchanges and clearinghouses. Established in 1961, we represent over 200 market infrastructure providers around the world. WFE members include stock, futures, options and commodity exchange groups as well as standalone clearinghouses. Our members are both local and global, operating the full continuum of market infrastructure in both developed and emerging markets. Of our members, 41 percent are in the Asia-Pacific region, 40 percent in EMEA and 19 percent in the Americas. The WFE works with global standard setters, policy makers, regulators and government organizations to support and promote the development of fair, transparent, stable and efficient markets. The WFE supports the efforts of the OECD and G20 to understand digital transformation and to develop and implement a resilient framework that fosters a positive and inclusive global economy and society. We believe that reform to global tax principles should be responsive to changing economic patterns and business models, and supportive of healthy risk management and capital formation. Furthermore, tax policies should avoid precipitating unhealthy economic distortions or an unlevel playing field between foreign and domestic suppliers. In this regard, the WFE supports the Commission’s rationale for exempting trading venues from the tax as articulated in the recitals to the proposal: “the user does not play a central role in the creation of value for the entity making available a digital interface. Instead, the value lies with the capacity of such an entity to bring together buyers and sellers of financial products under specific and distinctive conditions which would not occur otherwise… “[…] the regulated services which are excluded from the scope of this Directive aim at providing a safe environment for financial transactions… “[…] such services have the essential and distinct objective of facilitating funding, investments or savings.” The EU already recognises the value of trading venues and seeks to exempt them in the draft legislation. WFE strongly agrees with this approach. There is considerable academic literature that finds positive links between well-functioning exchanges and economic growth, economic development and financial stability. The WFE is, however, concerned that the drafting of the proposal would inadvertently capture non-EU trading venues that are accessible, under established supervisory arrangements, to clients in the Union. This concern arises from the fact that the exemption in the draft text is applied only to “a trading venue or a systematic internaliser of any of the services referred to in points (1) to (9) of Section A of Annex I to Directive 2014/65/EU.” Given that trading venues and systemic internalisers are defined in MiFID II as EU-authorised entities (as opposed to third country trading venues), there is a risk that non-EU entities would suffer discriminatory treatment, even if they have been recognised by the EU authorities in other ways. Third country venues are no less valuable than EU venues and allow EU investors to diversify their investment portfolios. We encourage EU policymakers to preserve investor choice and maintain a level playing field for market infrastructures by ensuring all regulated trading venues are exempted from the legislation irrespective of their place of establishment. The WFE welcomes well-designed international efforts to create a fair and coherent system of taxation. We fear however, the draft legislation may diverge from broader principles of non-discrimination and policy coherence, make international coordination more difficult, raise the prospect of retaliation from trading partners and lessen the availability of financial products and services to EU citizens.
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