WFE Board Urges Consistent Regulation And More Transparency

Paris, France - 22 September, 2009 - The World Federation of Exchanges (WFE) Board of Directors urged leaders of the G20 nations at their upcoming summit in Pittsburgh, Pennsylvania (USA), to press for market reforms that enhance transparency and create more uniform rules between exchange-traded and less-regulated markets.

In a letter to the G20 signed by WFE Chairman William J. Brodsky, the WFE Board applauded the efforts of the G20 leaders to improve unregulated markets and products by advocating the use of clearing houses and exchanges where risks can be better managed and prices are transparently set. Mr. Brodsky is Chairman and CEO of the Chicago Board Options Exchange.

"At the end of the day, all investors need to have confidence in the reliability of information reflected in the prices at which securities transactions occur," said Mr. Brodsky. "The heightened opacity of certain market operations in many countries inhibits price discovery and may lead to negative outcomes, such as increased volatility."

Specifically, the WFE urged G20 leaders to focus on the following points:

·       Absence of a Level Playing Field: WFE recommends that the G20 leaders consult with investor organizations about how they would wish to see orders executed in the markets, and determine whether alternative trading venues have reduced the total costs of transacting by investors.

• WFE also asks G20 leaders to assure a level playing field for the responsibilities assumed by all securities market order execution venues. This would remedy many capital markets uncertainties, assuring greater transparency, greater fairness and a more level competitive field.
• Reduced Market Transparency: Impact of Dark Pools The WFE Board asks that G20 also focus on issues related to dark pools and take remedial action in those countries concerned.
• WFE, the Financial Stability Board (FSB), and global financial standards bodies: the WFE Board expressed its support for many of the capital markets reforms being circulated by the Financial Stability Board; WFE also supports the FSB objective of having independent financial standards bodies set robust norms for our global financial system.

Importantly WFE asked that the G20 should agree on ways to avoid regulatory arbitrage between national financial market regulations around the world.

"Since the first months of the financial crisis, the WFE Secretariat has regularly made itself available to the FSB as an information resource on exchange-operated markets - reviewing the key statistics, and also commenting on the changing composition of those numbers. We stand ready to continue to play this role and to assist in any way that we can in the reform and rebuilding of the global financial system" Mr. Brodsky concluded.

A full copy of the WFE's letter to G20 can be accessed at 

ABOUT THE WFE:

The World Federation of Exchanges, based in Paris, France, is the trade association of more than 50 publicly regulated stock, futures and options exchanges. WFE conducts research on issues pertinent to its members and holds workshops and conferences around the world. WFE market operators are responsible for the functioning of key components in the financial world. WFE exchanges are home to about 46,000 listed companies (as of31 July 2009).

At the end of June 2009:

 The total market capitalization listed companies was approximately USD 40 trillion.

 Approximately USD 46.8 trillion in equities were traded on WFE stock exchanges.

 More than 5 billion future and option contracts were transparently traded on-exchange, with proper post trade risk management and guarantees.

Media Contacts:

 WFE: Peter Clifford, +33 (0) 1 58 62 54 01, pclifford@world-exchanges.org;

     Or +33 (0) 1 58 62 54 00 Sibel Yilmaz syilmaz@world-exchanges.org  

 CBOE: Carol Kennedy, (312) 786-7323, kennedyc@cboe.com  

 Intermarket Communications: Andrew Yemma, 212-754-5450, ayemma@intermarket.com  or Stephanie DiIorio, 212-754-5181, sdiiorio@intermarket.com