The World Federation of Exchanges (WFE) welcomes the PRA’s proposals on the definition of recognised exchanges outlined in Consultation Paper CP3/25.
As the PRA notes, regulators can have confidence that the listing and trading environment on exchanges is orderly, transparent, and supervised. Therefore, the WFE supports moves to empower banks to identify recognised exchanges and hold them to account where they fail to meet these obligations.
The WFE also supports the PRA's subsequent thematic reviews which should help provide guidance. This approach promotes proactive risk management and ensures that firms remain vigilant in monitoring the liquidity profiles of their exposures whilst ensuring UK banks have more access to overseas investments.
These enhancements underline the value of principles-based regulations over strict rules-based regulations.
In summary, the WFE endorses the PRA's proposed amendments, recognising their potential to enhance the resilience of the financial system while maintaining the UK's position as a leading global financial centre.
