THE WORLD FEDERATION OF EXCHANGES ISSUES POSITION PAPER ON IMPORTANCE OF VALUING STOCK MARKET DATA CORRECTLY

Hamilton, Bermuda – 25 July, 2019:  THE WORLD FEDERATION OF EXCHANGES ISSUES POSITION PAPER ON IMPORTANCE OF VALUING STOCK MARKET DATA CORRECTLY, the full filing stated the following;

PRESS RELEASE

THE WORLD FEDERATION OF EXCHANGES ISSUES POSITION PAPER ON IMPORTANCE OF VALUING STOCK MARKET DATA CORRECTLY

London, Thursday 25 July 2019 – The World Federation of Exchanges ("WFE"), the global industry group for exchanges and CCPs, has today issued an update on the importance of valuing stock market data correctly. This expands the federation’s January 2019 statement where the WFE discussed some of the reasons why such data has economic value to some market participants. The WFE sets out the key questions and considerations within the framework of the current policy debate for a coherent approach to pricing.

As today’s statement underlines, stock-market data exists only because exchanges create it and has particular value:

a)       because market participants can profit from using it; and

b)      because of the care that exchanges take in creating it, consistent with their role in society and the economy.

The WFE note specifies the value-enhancing activities that stock exchanges undertake as part of their mission that creates the market data. The WFE challenges the notion that regulation should engineer any value transfer from those who create the product; to those in the financial markets who wish to exploit it for their own commercial ends.

In particular, the WFE includes a brief discussion of why each of the following aspects of an exchange’s activity increases the value of the data that exchanges create:

1.       Legal organisation and governance;

2.       Regulatory framework;

3.       Equal treatment for market access;

4.       Listing and admission to trading;

5.       Trading;

6.       Technical infrastructure, including security and cyber resilience;

7.       Supervision, surveillance and enforcement; and

8.       Dispute resolution and complaint handling.

The statement discusses how an exchange prices data as a ‘joint product’ with trade execution. In other words, the data product is integral to the totality of what the exchange does, namely organising markets that maximise open and fair participation.

Nandini Sukumar, Chief Executive Officer, WFE said: “There needs to an open, honest and public debate. At present this is lacking. This matters - not just in terms of correctly representing the economics of stock-market data - but also because there is a wider issue at stake: ensuring that capital markets are as vibrant and inclusive as possible. We should recognise the benefits that exchanges uniquely bring to society. In that context, distorting the market for share-price data would be unjustified and damaging.”

You can read today’s WFE position paper in full here.

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About the World Federation of Exchanges (WFE):

Established in 1961, the WFE is the global industry association for exchanges and clearing houses. Headquartered in London, it represents over 200 market infrastructure providers, including standalone CCPs that are not part of exchange groups. Of our members, 37% are in Asia-Pacific, 43% in EMEA and 20% in the Americas. WFE exchanges are home to nearly 48,000 listed companies, and the market capitalisation of these entities is over $70.2 trillion; around $95 trillion (EOB) in trading annually passes through the infrastructures WFE members safeguard (at end 2018).

The WFE is the definitive source for exchange-traded statistics, and publishes over 350 market data indicators.  Its free statistics database stretches back more than 40 years, and provides information and insight into developments on global exchanges. The WFE works with standard-setters, policy makers, regulators and government organisations around the world to support and promote the development of fair, transparent, stable and efficient markets. The WFE shares regulatory authorities’ goals of ensuring the safety and soundness of the global financial system.  

With extensive experience of developing and enforcing high standards of conduct, the WFE and its members support an orderly, secure, fair and transparent environment for investors; for companies that raise capital; and for all who deal with financial risk. We seek outcomes that maximise the common good, consumer confidence and economic growth. And we engage with policy makers and regulators in an open, collaborative way, reflecting the central, public role that exchanges and CCPs play in a globally integrated financial system.

For more information, please contact:

Anna Watson

Head of Communications, The World Federation of Exchanges 

Email:     awatson@world-exchanges.org

Phone:   +44 20 7151 4137 / 7850 287 685

Twitter:   @TheWFE

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For more information on the Bermuda Stock Exchange (BSX), contact Nancy Vieira at 1-441-292-7212 or info@bsx.com. Information is also available at bsx.com and on Bloomberg at BSX the BSX was founded in 1971 and is the world’s leading fully electronic offshore securities market. The BSX list equities, mutual funds and bonds, depository receipts and derivative warrant securities. The BSX is a full member of the World Federation of Exchanges (WFE) and an affiliate member of IOSCO. In addition, the BSX is recognized by the U.S. Securities & Exchange Commission (SEC) as a Designated Offshore Securities Market under Regulation S; The Financial Services Authority in the UK as a Designated Investment Exchange; HM Revenue & Customs in the UK as a Recognized Stock Exchange; The Bermuda Monetary Authority as a Recognised Investment Exchange and as an Approved Stock Exchange under Australia’s Foreign Investment Funds (FIF) taxation rules.