Exchange group warns over too much transparency
A trade association for the world’s stock exchanges says there is a danger of too much transparency when it comes to dealing with cyber threats.
The World Federation of Exchanges (WFE), which represents stock, futures and options bourses and post-trade infrastructures, said on Monday that “transparency for transparency’s sake is not always a desirable outcome.”
The comments came in response to a joint paper by the Committee on Payments and Market Infrastructures (CPMI) and the International Organisation of Securities Commissions (IOSCO).
Both regulators have set out principles for financial market infrastructures, one of which (PFMI 23) notes that “all relevant rules and key processes shall be publicly disclosed."
However, in a read across to cyber-related matters, WFE says that disclosing all rules on risk, fees and costs could undermine CMPI-IOSCO’s wider objectives of enhancing safety and efficiency in payment, clearing and settlement.
“Whilst acknowledging the benefits of transparency generally, any requirement to publicly disclose details on cyber resilience could be potentially detrimental," WFE said.
“Disclosure must be conducted in a carefully considered manner to ensure information doesn’t better equip potential attackers and increase cyber resilience related risk.”
WFE’s paper, entitled “Guidance on Cyber Resilience for Financial Market Infrastructures” added that different markets are at different stages of development, and this needs to be taken into account when drawing up standards.
It also cautioned against being too prescriptive – whether in terms of strategies, frameworks, documentation, or recovery/resumption expectations.
Found this useful?
Take a complimentary trial of the FOW Marketing Intelligence Platform – the comprehensive source of news and analysis across the buy- and sell- side.
Gain access to:
- A single source of in-depth news, insight and analysis across Asset Management, Securities Finance, Custody, Fund Services and Derivatives
- Our interactive database, optimized to enable you to summarise data and build graphs outlining market activity
- Exclusive whitepapers, supplements and industry analysis curated and published by Futures & Options World
- Breaking news, daily and weekly alerts on the markets most relevant to you