FESE Response to IOSCO Consultation on “Exchange Evolution”

02 June 2006

FESE issued its response to the Consultation Report: “Regulatory Issues Arising From Exchange Evolution” agreeing with the key recommendations of the Consultation Report, but believing that there is no need for IOSCO to revise any of the standards referred to in the report. Also, there is no need for national authorities to review and supplement the measures in place in their jurisdictions.

FESE is also cautious against regulators taking over SRO tasks and intervening unduly in the internal structure of exchanges. Finally, the Report should more explicitly recognise that evolution does not only mean demutualization or conversion to for-profit structure; it includes, for example, the emergence of systematic internalisers and MTFs/ECNs. These developments raise some problems which also need to be taken into consideration in any analysis of the evolution of the role of exchanges.

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