WORLD EXCHANGES ASSOCIATION PLANS BEST PRACTICES GUIDELINES, STUDIES MARKET QUALITY AND USE OF CIRCUIT BREAKERS

Posted February 2, 2009

PARIS – The World Federation of Exchanges (WFE), a trade association, has set three main priorities for 2009: Helping the International Organization of Securities Commissions (IOSCO) set best practices for short-selling and securities lending; clarifying the use of circuit breakers in volatile markets, ensuring they are predictable and temporary; and studying the effects of fragmentation and its impact on market quality.

”We are at a critical juncture in the evolution of our global markets, and WFE is well positioned to share knowledge of exchanges with international governing bodies,” says William J. Brodsky, Chairman of WFE. “Our overriding goal is to examine what has and has not worked in the midst of recent market turmoil. Despite unprecedented volatility, our member exchanges have fulfilled their roles as transparent marketplaces, disseminating prices for the essential functions of capital formation and risk management. We believe our collective experience and knowledge can be a valuable resource as global policy makers and regulators grapple with the difficult challenges ahead.”

In addition, WFE and the Organization for Economic Cooperation (OECD) are working on a joint project concerning improvements to the corporate governance of the 45,000 issuers of securities on the WFE exchanges. More than 17 billion future and option contracts were transparently traded on-exchange, with proper post trade risk management and guarantees.