THE WORLD FEDERATION OF EXCHANGES RESPONDS TO EUROPEAN COMMISSION’S CONSULTATION ON DIGITAL RESILIENCE

Hamilton, Bermuda – 20 March 2020:  – The World Federation of Exchanges (“WFE”), the global industry group for exchanges and CCPs, has responded to the EU Commission’s consultation paper on Digital Operational Resilience Framework for financial services: Making the EU financial sector more secure.

The WFE’s response covers a number of key areas including:

·         Information and communications technology (ICT) and security risk management framework based on key common principles: The WFE believes that internationally recognised common principles and standards are key to ensuring that the global markets and firms which engage with the EU, and beyond, are well positioned to understand the requirements that are made of them. The consideration of existing frameworks, such as NIST and ISO, would be key for compliance with any such proposal.

·         ICT and security incident reporting: The WFE notes that market infrastructures in the EU are currently subject to strict incident reporting requirements, mandated by the National Competent Authority (NCA) in the jurisdiction they operate. Changing the approach to create a centralised, harmonised reporting structure for the EU might introduce problems due to a potential lack of background information or context and non-familiarity with local markets. The WFE is, however, supportive of a move towards harmonising security testing requirements, given the cross-border nature of the threat and the likelihood of an organisation needing to operate in more than one jurisdiction. The WFE would also support efforts to promote an international standard (i.e. one that is globally applicable and adoptable) for security-testing requirements, based on a principles- and outcomes-based approach.

·         Communication between supervisors: Whilst the WFE supports the sharing of information between public authorities, it advocates that this be ad hoc, high-level and thematic, rather than a standing mechanism to exchange detailed reports, incident by incident. It argues that the former would not only be more effective but also would not run against confidentiality requirements (with respect to reporting financial entities).

Nandini Sukumar, Chief Executive Officer, WFE said: “As the stewards of global public markets, ensuring their continued stability and safety, members of the WFE operate at the very highest level in terms of digital operational resilience. The WFE therefore welcomes the opportunity to engage with the EU Commission’s work in this area, and supports policymakers and the wider industry’s efforts to enhance operational resilience and to improve practices across the whole of the financial services sector.”

The WFE operates a dedicated cyber security working group (GLEX) to promote the sharing of information and to generate best practice among the industry. The WFE is always open to discussing what the sector is doing and how its members share information and best practice, with the EU, other regulatory jurisdictions, and the international standard setters.

Please click here to read the full WFE response.

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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 250 market infrastructure providers, including standalone CCPs as well as those that are part of exchange groups. Of our members, 35% are in Asia-Pacific, 45% in EMEA and 20% in the Americas. WFE’s 57 member CCPs collectively ensure that risk takers post some $800bn (equivalent) of resources to back their positions, in the form of initial margin and default fund requirements. WFE exchanges are home to nearly 53,000 listed companies, and the market capitalisation of these entities is over $93 trillion; around $88 trillion (EOB) in trading annually passes through WFE members (at end 2019).

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