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World Exchange Congress 2016: Navigating a volatile financial landscape

Article - March 1, 2016

This year’s meeting of the World Exchange Congress (WEC) on March 22-23 takes place as stock markets around the world are being roiled by the collapse of oil prices and the slowdown of the Chinese economy.

These market-moving events aside, exchanges today are facing ongoing challenges to their efficiency, security and their very position as the primary venues for equities trading. With “dark pools” and other off-exchange venues taking an ever-greater share of stock trading, bourses are seeking alternate revenue streams and ways to attract a new generation of investors and a wider range of issuers.

At the same time, they must adapt to the disruptive technologies that are transforming the nature of securities trading worldwide. This means harnessing the opportunities that innovation offers, while protecting the markets from rising threats to security.

Now in its 11th consecutive year, this edition of the WEC will address all these and other issues through a series of in-depth presentations and discussion panels. Specific topics include market integrity, big data, crypto currencies, crowd funding, blockchain technology and post-trade automation. The conference will also explore the ways in which exchanges and financial centers can benefit from collaboration, by examining the advantages these partnerships offer and the obstacles to their success.

Held at ETC Venues, 155 Bishopsgate, London, UK, this year’s Congress will be attended by over 300 CEOs and CTOS from established and emerging exchanges, as well as market regulators, at an event that has become known as the “unofficial AGM” of the financial services industry. The WEC provides them with a unique opportunity to hear how colleagues around the world are responding to the changes in the financial landscape, which can be summarized in the overarching themes of the event: new customers, new revenues, new partnerships.

New customers

A generation of young people has grown up in the midst of a financial crisis that has lasted, in some cases, for almost half their lives. At the same time, they have seen how IPOS and acquisitions in the technological sector – read Google, Skype, YouTube, Facebook – have created youthful millionaires overnight. How do you convince skeptical millennials that investing in stocks is a long-term proposition?

Given the dwindling number of IPOs in the past year, the WEC will also examine what can be done to convince more companies to go public. Particular attention will be given to SMEs and how to modify the rules for new issuers, in order to make it more attractive for them to list, without compromising market integrity.

New revenues

With the current state of the markets, bourses are obliged to look for new revenue streams. Among the options are foreign exchange and FX derivatives, which will be discussed in keynote speeches on both days of the event. Another issue is how to bring more over the counter trading onto established exchanges, particularly as alternative markets are coming under increasing pressure from regulators to make their operations more transparent.

New partnerships

The idea of cooperation between exchanges is hardly a new one, but what real advantages does it produce? This year’s WEC will hear from SEE Link, the project launched by exchanges in Bulgaria, Croatia and Macedonia to create a regional infrastructure for cross-border securities trading.

Another panel will examine the plan to create a European Capital Markets Union. Announced with great fanfare in early 2015, the CMU is meant to create a single capital market across the EU’s 28 member states, thereby making available new sources of credit to businesses and more options for investors.

Along with this goes the issue of how to increase stock market performance by attracting more investors from abroad.

A series of sessions will focus on regional opportunities in markets in Europe, Asia, the Americas, Africa and the Middle East. The liberalization of the Chinese market and the correlation between oil prices and stock market performance in the Arab exchanges will also be discussed.

Apart from these themes, the World Exchange Congress will examine the new technologies that have already begun to transform the way securities markets operate. Blockchain technology will receive special attention, given the possibility of offers to reduce risk and to shorten confirmation and settlement times.

Just as important as the presentations and panel discussions is the opportunity the Congress will provide for “speed networking” in which attendees will meet their peers from other markets, exchange ideas and explore future collaboration.

The 11th World Exchange Congress should once again prove an exciting opportunity for contacts, information and discussion of the major trends affecting the financial services industry worldwide.