The situation triggered worldwide by the spread of the Covid-19 virus also leaves its mark on the markets, which are facing more and more challenges. However, “it is crucial for markets to remain open,” a statement from the Federation of European Securities Exchanges said.
Financial markets play a very important role in ensuring price formation, transparency and liquidity, and hindering their activity can have a huge negative impact on the economy and society. The functioning of the markets is essential even in times of crisis, or they were “tested” and in 2008 when financial operations had to continue to maintain investor confidence.
The principles of FESE members are transparency and objectivity, especially in these times of uncertainty. That is, EU stock exchanges will remain open at all times, in order to ensure reliability, fairness and integrity in a safe and transparent manner.
From a technical and operational point of view, the exchanges will continue to operate in an organized, normal and transparent manner, despite the extreme trading conditions triggered by Coronavirus. Also, the protocols and the contractual conditions of distance work will be respected. The markets will work in an orderly manner by constantly reviewing the flow of news and by evaluating the securities of investors, with a view to restoring investment portfolios.
The Federation of European Securities Exchanges announces that investors must continue to expect negative news flows, restrictions imposed by government decisions, quarantines and blockages of economic and social activity, but also to positive events such as the government support provided in it. sense. Therefore, investors need to adapt to the economic circumstances in transition, and the organization and control of trading venues is essential in such volatility conditions. Investors also need to incorporate and manage their risks in a transparent and thoughtful way, and to consider hedging in these volatile conditions.
At present, the most reliable investment instruments are derivatives, which are used as proxies or hedging instruments for most OTC markets.
The members of the Federation of European Securities Exchanges carefully monitor the global developments and assure investors that they will make every effort to maintain safe and transparent market conditions in the European space.