WORLD FEDERATION OF EXCHANGES SEEKS INPUT ON TRADING OF OTC INSTRUMENTS

Posted November 3, 2008

MILAN – The World Federation of Exchanges (WFE), an organization of 56 of the world’s largest securities exchanges is offering to help scrutinize the extent to which certain over-the-counter (OTC) instruments can lend themselves to trading and settlement in the regulated exchange environment, as global financial policy makers examine the role of exchanges in addressing the current economic crisis.

The WFE has addressed its offer in a letter to the International Organization of Securities Commissions (IOSCO), the Financial Stability Forum, the Organization for Economic Cooperation and Development (OECD), the Bank for International Settlements and the International Monetary Fund (IMF).

The WFE letter also emphasizes that:

• Regulated exchanges remain critical providers of liquidity to the world’s capital markets, in addition, they afford transparent price discovery for much of the world economy’s financial assets;

• The combination of exchange-listed and traded securities, options and futures has led to considerable innovation and efficiency in financial markets;

• The leaders of WFE exchanges are committed to maintaining regular trading hours so far as possible so that markets can continue to function properly during the crisis, fulfilling their role as continuous open markets for establishing and disseminating prices for exchange-traded instruments;

• Regulated exchanges’ post-trade arrangements, including the use of clearing central counterparties to guarantee trade execution, allow for certainty of transactions and allow exchange-operated markets to remain open and dependable;

• Short selling contributes to liquidity and the practice should be allowed to continue.