Domestic exchanges to gain with effort towards integration: SAFE


Mar 01, 2017 (LBO)- Leaders from South Asian capital markets, the South Asian Federation of Exchanges (SAFE), have called for improved integration of regional markets, sharing their views on the way forward for exchanges in South Asia.

Chief executives of stock exchanges from around South Asia expressed these views when they gathered in Colombo for the executive committee board meeting and workshop of SAFE.

“As we all know, capital markets globally, regionally and even in our nations, are constantly evolving and embracing transformation. The role and impact of an exchange today, is well beyond what was defined at the inception of SAFE as an organization,” Vajira Kulatilaka, chairman of SAFE and CSE said.

“This is even more so for emerging and developing countries, which many of us are a part of. It is therefore quite relevant that SAFE today looks at evolving as an organization.”

Our diversity is our strength, he says and our ability to learn from each other through collaboration and knowledge sharing is a key benefit of being a part of an organization of this nature.

Smaller exchanges in the region, for instance, have the ability to benchmark more developed peers, while our more developed peers have the privilege of shaping the future of fellow regional exchanges – a process that is brought into the table through affiliation, he added.

Commenting on the success story of the Bombay Stock Exchange (BSE), Nayan Mehta, CFO of the exchange said that the government’s strong commitment to reform sparked transformation of the exchange from several operational low points to the largest operation in India and South Asia today.

“Stakeholder management, investment in technology and a strict commitment to compliance and transparency were key drivers that propelled the exchange.”

On the topic of demutualization, Aftab Ahmed, secretary general of SAFE said that it is an important step in handing vested interest to the investor.

“It is critical that we also improve the governance of our exchanges and in our region through demutualization, mainly to relieve brokers from the governance aspects of the exchange so that the exchanges have the ability to provide products and services that are in the best interest of the investors.”

He also went on to highlight the importance of South Asian exchanges embracing the increasing influence of SMEs and startups in global affairs, stating that exchanges around the world are already reaping the benefits of providing fund raising opportunities to such enterprises.

Quality primary market key to success of the capital market, said Shaifur Rahman Mazumdar, managing director of the Chittagong Stock Exchange.

“The regulators have worked to change the rules and regulations to create a strong and transparent primary market,”

“We therefore now have the platform ready to create a robust IPO market and we have experienced a strong demand for IPOs in our country. A number of large companies are in the pipeline of getting approval from regulators for listing on the exchange.”

Shalini Gokhool, manager, Stock Exchange of Mauritius said regulation and market development are inextricably linked.

“I would say that regulation and market development are inextricably linked. Too much regulation can stifle market development, hence the need for the right balance,”

“To take the example of Mauritius, since 2010 we have embarked on an internationalization strategy where we are trying to innovate in terms of products and getting more players to come to our market.”

We have had the very strong support of our regulator the Mauritius Financial Services Commission to bring many changes so that we could implement our new strategy, he added.

SAFE which aims to foster collaboration and co-operation among its members in order to develop their respective capital markets presently has members comprising of stock and commodity exchanges across South Asia and several depositories and clearing houses in the region as associate members.

Sri Lanka has held the Chairmanship of the SAFE Secretariat since 2015.