The World Federation of Exchanges, representing exchanges and clearing houses worldwide, has launched its Exchange Manifesto, a declaration aimed at reinforcing the essential role public markets play in economic prosperity, financial inclusion, and systemic resilience.
This is even as the global body cautioned that the continued decline of public markets poses a major risk to global finance, warning regulators that the erosion of exchanges could undermine the most transparent, resilient, and inclusive form of capital allocation available to economies worldwide.
Announcing the manifesto on its website on Wednesday, the WFE said that it serves as a means to codify the unique and irreplaceable value exchange groups bring to society at large.
Established in 1961, the WFE is the global industry association for exchanges and clearing houses. It is headquartered in London and represents the providers of over 250 pieces of market infrastructure, including standalone CCPs that are not part of exchange groups.
The newly launched manifesto outlines ten “pillars” of value created by exchanges for individuals, businesses and governments.
The pillars include giving people a path to financial security via inflation-beating shares:They complete their offering with other products, such as fixed income. Help companies, new and old, large or SME, to prosper. Listing is a platform for future funding, hiring and marketing, not just cash today. Provide a clear signal on the health of a country. There is a mutually positive relationship with GDP increases. By supporting growth, it contributes indirectly to tax revenues:Also, financial services, with exchanges at the core, are a value-added industry and channel funds on the necessary scale to strategic sectors (defence, medicine): Transitional and new sectors benefit too (digitalisation, AI).
Others are that exchanges form the foundation for other financial markets: exchanges have a ‘halo’ effect, which makes other financial markets more credible. Attract international investment: The profile and integrity of organised markets bring in foreign investors. Underpin insurance: Insurers need to invest in growth and value assets and manage asset-price risk. Promote public engagement: access to capital markets and data reinforces social inclusion and ensures system-wide soundness and resilience; this is funding and investment without credit crunches.
“With new governments taking office around the world, it is timely to recall the importance of these market infrastructures, together with derivatives exchanges, and how they serve the economy,” said WFE Chief Executive Officer Nandini Sukumar, who added, “With their vitality under threat, regulators must take heed of what is at stake. If we allow public markets to continue to decline, we risk losing the most transparent, resilient, and inclusive form of finance we have.”
The Federation is urging policymakers to safeguard and promote public markets by recognising their strengths, incentivising their use, and embedding their contributions in economic strategy.
“Exchanges make the future happen for savers, for companies and for whole countries. They simultaneously support economic growth and household financial security and provide the infrastructure on which all finance and economic activity are built. And they are there through the bad times (such as COVID) as well as the good, enabling capital raising and investment, even when a crisis strikes,” the statement concluded.
The Nigerian Exchange Limited closed Wednesday’s trading with its market cap at N89.56tn.
