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The 40th Annual Meeting of the International Federation of Stock Exchanges (FIBV) was attended by 120 delegates from 57 exchanges, together with more than 60 observers drawn from exchange customers, academia and technology suppliers.
Speaking at the conclusion of the 3-day meeting, the Managing Director of the Australian Stock Exchange (the host exchange for the meeting), Mr Richard Humphry, said that the meeting had focused on several issues crucial to the future role of exchanges in the increasingly competitive and globalised environment.
"The world's stock exchanges are determined to meet the challenges of globalisation, rapid technological change and investor demands for greater empowerment", Mr Humphry said.
Key issues canvassed by delegates included the following:
Can exchanges continue to provide the focus for price discovery for investors in the face of competition from ECNs (electronic communications networks) and the subsequent market fragmentation? Exchanges indicated they were in the process of adjusting their service offerings to ensure that their customers could continue to rely on the price discovery offered by their markets.
How exchanges, as they swap stockbroker ownership for shareholder ownership, can "unchain embedded value" for their new owners. The meeting heard from the exchanges from Australia, Hong Kong, Paris and Stockholm on their experience in a demutualised environment. In a poll of delegates, it emerged that the overwhelming majority of FIBV exchanges have either replaced stockbroker ownership with shareholder ownership or are planning to do so.
The responsibilities of exchanges to respond to the explosion world-wide in the growth of the individual shareholder base. Exchanges heard how demographics, increasing individual responsibility for retirement planning, and technology (including the Web) have combined to return the individual investor to the centre of exchange preoccupations. Exchanges agreed that appropriate investor education was a key issue and have agreed to hold a special meeting on the subject next month in Stockholm.
Exchanges rejected any notion that, in a for-profit environment they would be tempted to lower their standards of market supervision and integrity. Exchanges were unanimous in asserting that market integrity was crucial to their commercial success. Interestingly, representatives from government regulators were adamant that they were not seeking to take on the supervision role currently undertaken by exchanges, even as they move into a demutualised environment.
Mr Humphry said that this FIBY meeting successfully showcased Australia, particularly Brisbane, to the world.
"This Annual Meeting was another triumph for Australia in the wake of our highly successful Olympic Games", Mr Humphry said.
"Australia is winning the battle of changing perceptions about the ability of Australia to deliver best-quality business outcomes".
