With its four overarching objectives (fostering the global competitiveness of European exchanges; promoting public recognition of the exchanges and their contribution to the European and global economy; providing a forum for open and forward-looking debate on capital markets), FESE has adopted an action plan focused on the following priority areas of activity:

Advocacy of high-quality regulation

Efficient EU capital markets are of utmost political significance in order to deliver the Lisbon Agenda goals of increasing economic growth and employment. FESE’s overarching aim is to strengthen the competitiveness of Europe’s capital markets and to make them more attractive to both EU and 3^rd country issuers and investors. FESE seeks to improve the quality and focus of regulation by contesting excessive or misguided regulation and promoting proportionate and well-justified regulation aimed at effective investor protection and market integrity. Exchanges’ interest in high-quality regulation derives not only from their business interests but also from their day-to-day role of overseeing markets, which remains crucial to maintaining transparent and safe markets.

Promoting regulatory processes that make better regulation possible

Good regulation comes from a good process. FESE will place increasing focus on the use of impact assessments of legislation to improve the quality of existing EU and international regulatory framework and of any future regulatory initiatives. We will especially seek to ensure that EU regulation is based on a sound understanding of market practices. Furthermore, FESE shall monitor on a continuous basis the transposition process of EU legislative acts in order to identify possible inconsistencies such as gold-plating that could undermine an effective level playing field.

Enhancing competition in securities markets on a level playing field

An important objective of the FSAP legislation is to utilise the forces of competition in Europe to the benefit of investors and companies – a goal wholeheartedly supported by FESE, whose members are well placed to take advantage of the opportunities presented by a Single Market. Competition between exchange and off-exchange trading activities should take place on a level playing field. As the FSAP legislation is monitored for inconsistencies and areas of possible improvement, FESE will continue to draw attention to the impact of legislation on the conditions for competition in the EU and for the competitiveness of the European industry as a whole in the context of the global provision of financial services.

Improving the efficiency of clearing and settlement of securities in Europe

Well-functioning and cost efficient clearing and settlement processes are essential to the integration of EU capital markets and to the exchanges’ ability to facilitate current and future patterns of trading. FESE supports market-driven solutions based on sound business cases and cautions against misguided public interference with clearing and settlement services. FESE is working with the Commission to reach a market-led solution to achieve an integrated cash equity market in the context of the proposal to establish a code of conduct for the cash equity market aimed at increasing price transparency, improving interoperability and establishing separate accounting. Such a wide-reaching and potentially cost-intensive agreement can only be launched in a stable and predictable environment and must be backed with the Commission’s continued commitment to work towards the removal of tax and legal barriers, which are largely responsible for the high costs of cross-border clearing and settlement.

Improving supervisory cooperation

Good laws can turn into concrete results on the ground only if supervisors act in a coordinated manner. FESE has been a strong supporter of the Lamfalussy process and is an active contributor to its review and improvement. FESE brought attention, for example, to the problem of multiple home regulators, faced by some of our Members as well as cross-border issuers and intermediaries. FESE promotes greater clarity in the respective roles and responsibilities of supervisors, as well as greater convergence of supervisory practices and approaches to cross-border initiatives. FESE’s involvement in this discussion also reflects its members’ support for the political processes in their respective jurisdictions and for the continuing political accountability of the convergence process in the EU.

Enhancing exchanges’ ability to attract a broad range of issuers, including small and medium sized enterprises (SMEs)

The access of SMEs to capital markets is a crucial yardstick of the competitiveness of Europe’s capital markets and is intricately linked to the goals of economic growth and employment. Many securities exchanges are actively developing alternative markets aimed at SMEs. There appears to be a consensus that the needs of companies from the SME segment should be met with market-led solutions. Exchanges can make a unique contribution to the EU’s economic well-being by improving the access to funding of the most dynamic sectors of the economy. These efforts should be complemented by a policy strategy to prevent a disproportionate regulatory burden on SMEs in order to allow them to achieve their potential.

Participating in the Trans-Atlantic and global financial sector dialogue

As the European Commission and CESR continue to strengthen their respective channels of dialogue with their counterparts in the US and other countries, the securities exchanges will continue to play an important role in identifying the issues that must be tackled to ensure fair and competitive conditions for their business in such markets. A priority in this context should be to establish a welcoming and legally predictable policy framework to 3^rd country issuers.