The World Federation of Exchanges (WFE) has called for common approach to issues among International Organisation of Securities Commission (IOSCO) and G20 nations.
Reacting to the European Securities and Markets Authority’s (ESMA) Discussion Paper on Distributed Ledger Technology (DLT), WFE said it supports the objective of a coordinated European approach to DLT.
According to its published position, urged ESMA to work alongside international regulatory organisations and groupings, such as IOSCO and the G-20, to firstly develop a common approach to ensure a level playing field amongst current and potential DLT providers and participants; and secondly, to ensure any policy-formation in this area is complementary and does not encourage regulatory arbitrage.
WFE said: “Given the evolving nature of DLT, it is important that regulators follow industry developments in the design and application of DLT to the financial system, as ESMA and other market authorities are proactively doing.
“This will be important and helpful in ensuring the market moves together, and that investor protection is in focus from the outset.
“The WFE encourages regulators to continue to collaborate with all parts of the industry to better understand the development of DLT, and to minimise unintended consequences from any subsequent policy formation”, among others.
Chief Executive Officer of WFE, Nandini Sukumar said: “As an industry, financial market infrastructures are studying DLT and its potential benefits to the capital markets.
“As the global industry association for exchanges, CCPs and CSDs, the WFE will seek to devote significant time and attention to forging consensus amongst its members on DLT-related issues, specifically formulating guidelines, codes of conducts and industry best practice as use cases and issues emerge. There is still much to come in this space.”
Head of Regulatory Affairs, Gavin Hill, said: “Markets are dynamic and continue to innovate. Developments in this space should continue to be market-led and not unnecessarily hampered. However, it is important that stakeholders continue to engage, and as such, the WFE will endeavour to facilitate an open dialogue between regulators and its membership regarding the evolution of the technology, and the sharing of information and best practice.”