Still independent, the Luxembourg Stock Exchange (LSE) sets innovation as a strategy. Interview with its president: Robert Scharfe.
Leaders League. Despite a contained domestic market, the Luxembourg Stock Exchange plays a strategic role in international bonds listings. Why is Luxembourg so attractive?
Robert Scharfe. The Luxembourg Stock Exchange is a pillar of our country as a financial center, and has quite quickly recognized the potential of euro-bonds. Since its creation in 1936, the stock exchange has continuously developed its activities based on maintaining expert knowledge of services for international issuers. Today, we perform services and have an international footprint with over 3,000 issuers around the world from over 100 different jurisdictions. With 40,000 listings in 55 different currencies and a growing volume, the Luxembourg Stock Exchange offers its clients and international issuers a very efficient, attractive and diversified service platform.
Leaders League. Is the independence with Euronext still viable?
R. S. Our current relations with Euronext are satisfying. Thanks to the partnership established between both our institutions, we are able to offer our clients and all the Euronext network a modern and functional trading platform. Our collaboration is based on high-quality professionalism on both sides. Due to the specific nature of our main activity, which is more focused on international securities listings rather than transactions, an autonomy in our decision process needs to exist.
Leaders League. In contrast to many, you are never opposed to regulation and innovation. How could regulation help the process of value creation?
R. S. I am considering that we are active in a field where regulation is necessary or even mandatory. Especially for stock exchange and capital markets, it is crucial to create a trusted atmosphere through reinforced transparency and open information, which is a benefit to all players. To achieve this, it is necessary to establish an efficient and constructive collaboration between regulators, market players and investors. The financial crisis has shown the limits and danger of a too-liberal financial market. We are convinced that a universal, healthy, clear-headed regulation is a major component of performing, competitive and trusted financial markets. Furthermore, the regulatory weight is asking us to reshape our business models to adapt them to new constraints and change in customers' expectations. What follows is an adaptation process or even a renewal of our value proposition heading the market evolutions.
Leaders League. How is the Luxembourg Stock Exchange more innovative than its sisters?
R. S. The Luxembourg S.E. has a 40% market share of international bonds listed in Europe and 20% worldwide. Moreover, we are the European leader in high-yield listings with an estimated 60%, the Luxembourg S.E. is clearly in a leadership position and this is due to the innovation we always keep in mind. Back in 1963, we were hosting the first euro-bond listing, which created its own market. Since, we have always acted as a prime-mover ensuring global recognition from international issuers. Thus, we are the first listing center of RMB bonds outside of Asia, a market certainly in full bloom.
Luxembourg stock Exchange at a glance :
Established in 1928
1st Ranking of the Luxembourg Stock Exchange in termes of listed international bonds in Europe
70+ Countries which have at least one issue of their sovereign debt in Luxembourg
100 + Jurisdictions
3,000+ Numbers of issuers listed
26,000+ Debt securities listed
10,000+ new listings in 2014
40,000+ total securities listed
picture credit : Raoul Somers