The head of Dubai International Financial Exchange (DIFX) has predicted a wave of consolidation among the world’s stock exchanges.
Speaking at DIFC Week on Tuesday, Per Larsson said that increased competition and a need to raise standards meant that many bourses would have to merge.
Per Larsson, CEO of DIFX, said: “I think exchanges will look to be more diversified as investors want to invest in more asset classes seamlessly, and that will drive consolidation. You have to show that you can provide best execution.”
He added that most stock exchanges had been established as national monopolies, but needed to realise that they were no longer protected from competition.
“Exchanges need to change in order to be competitive. They need to realise that the walls are no longer there to protect them,” said Larsson.
Larsson added that exchanges needed to ensure they offered a range of products that would be suitable in more volatile market conditions.
He also emphasised the importance of a strong, transparent financial and regulatory environment to exchanges.
On November 19, Borse Dubai, the owner of the DIFX, received approval for its bid for exchange operator OMX from Sweden’s financial regulator.
Following the completion of its agreements with OMX and Nasdaq, DIFX plans to use its Nasdaq DIFX brand in other Middle East markets.
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