Focus on Consolidation of Stock Exchanges at FT/DIFC World Financial Centres Summit

One of the key themes under discussion at today’s FT/DIFC World Financial Centres Summit was the drive towards the consolidation of global stock exchanges. This was addressed in a question and answer session by Per E. Larsson, Chief Executive Officer of Borse Dubai.

Today was the second day of the summit, which gathered senior financial sector executives, corporate decision-makers and regulatory and government officials, including some of the biggest names in international finance, to discuss key issues affecting the world’s financial centres.

This event is the cornerstone of this year’s DIFCweek, underlining the progress made by the DIFC, backed by its financial services authority and fully regulated capital market, towards its goal of becoming a global financial hub on a par with New York, London and Hong Kong. This is the first FT/DIFC World Financial Centres Summit, with the second due to take place in London next year.

The question and answer session, chaired by Hilary Bowker, former CNN anchor, tackled issues including: globalisation, competition and consolidation of exchanges; investor diversification; production innovation; best execution; links  between NASDAQ and the DIFX; and the upcoming  intended listing of DP World.

Commenting on the consolidation of exchanges, Per E.  Larsson said: “There is a global trend, fuelled by increased competition, which is driving consolidation and benefitting all stakeholders. I believe we will see further consolidation from large exchanges in mature markets, as well as the emergence of new exchanges.”

“We are witnessing two mega trends in this exchange industry: consolidation and the creation of more exchanges as institutions. This has created a new trend of M&A activity in this industry that didn’t exist 10-15 years ago and which will continue to accelerate”, he added. 

Larsson highlighted the shift away from the traditional exchange business model: “Exchanges need to change in order to become more competitive and more efficient. There is now a focus on product development and innovation, with exchanges looking to be more diversified as investors become more sophisticated and seek alternative asset classes.”

“Today, the DIFX is an exchange connected to local and regional investors, as well as international investors. Under its Market of Markets strategy of diversification it introduced a structured products platform in August this year and it will continue to move into new asset classes as well as seeking more regional IPOs.  The DIFX will play an important role in the drive for consolidation, working together with local exchanges and creating linkages to support the local investment community”, he concluded.

This session was followed by a panel discussion on the risks of over-regulation, which was examined by Takatoshi Ito, Member of the Council on Economic and Fiscal Policy in Japan, David Knott, Chief Executive of the Dubai Financial Services Authority, Guy Morton, Senior Partner at Freshfields Bruckhaus Deringer and R. Ravimohan, Managing Director and Region Head of South Asia at Standard & Poor’s.

Following on from this was a keynote debate on “The Big Picture” between experts Dr. Lawrence H. Summers, Charles W. Eliot University Professor at Harvard University and Martin Wolf, CBE, Associate Editor and Chief Economics Commentator at the Financial Times.

The half-day event finished with a lunch and closing remarks from the Chair.

For further information on the FT/DIFC World Financial Centres Summit and DIFCweek, please visit: www.difcweek.ae

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