Regulators should approve crypto-related products for retail investors: The WFE responds to IOSCO’s Final Report on Investor Education on Crypto-Assets

 

PRESS RELEASE

Regulators should approve crypto-related products for retail investors: The WFE responds to IOSCO’s Final Report on Investor Education on Crypto-Assets

London, 11 October 2024 – The World Federation of Exchanges (“WFE”), the global industry group representing over 250 exchanges and CCPs which operate established, trusted and highly regulated trading venues, commends IOSCO’s Final Report on Investor Education on Crypto-Assets.

IOSCO is right – with crypto-assets, enhanced investor education is still necessary. 

Crypto-asset investments might lack basic investor protections, as those offering crypto-asset investments or services may not be complying with applicable law, including registration and licensing requirements," IOSCO notes in the report published this week. 

These things are fundamental, especially for retail customers. 

However, the benefits of crypto-related financial products, such as crypto-ETFs and crypto-derivatives, can be safely realised when traded on better regulated markets,  such as exchanges, due to the the higher level of investor protections that come with the more stringent oversight exchanges are subject to. 

Regulators should therefore approve crypto derivatives and ETPs for retail investors. By offering these products within regulated markets, exchanges help mitigate some of the key risks IOSCO has identified in its report. The necessary compliance with licensing, registration, and transparency requirements that govern trusted exchanges provides the safer option on which retail investors can trade these assets.

Nandini Sukumar, Chief Executive Officer of the WFE, said, “Broadening the pool of investible securities is always beneficial for investors as it provides more choice. The complexity lies in ensuring those investible securities are suitable to trade and operate within appropriate, and secure, parameters. Crypto-assets have been a case in point. Exchange-traded public markets, and products, place investor protection at the heart of their model. As an industry, we look forward to fulfilling our traditional role with crypto-assets too: offering markets & products that are open to all, while still operating in transparent ways with great integrity.” 

Richard Metcalfe, Head of Regulatory Affairs at the WFE, commented, “By opening access to these products, regulators will broaden the horizons of retail investors within their jurisdictions by offering new capital allocation and risk management opportunities, traded within a trusted environment.”

For more information, please contact:

Cally Billimore +44 7391 204 007

Communications Manager [email protected]

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 the providers of over 250 pieces of market infrastructure, including standalone CCPs that are not part of exchange groups. Of our members, 36% are in Asia Pacific, 43% in EMEA and 21% in the Americas. The WFE’s 87 member CCPs and clearing services collectively ensure that risk takers post some $1.3 trillion (equivalent) of resources to back their positions, in the form of initial margin and default fund requirements. The exchanges covered by WFE data are home to over 55,000 listed companies, and the market capitalization of these entities is over $111tr; around $124tr in trading annually passes through WFE members (at end-2023).

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.

Website: www.world-exchanges.org

Twitter: @TheWFE

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