The World Federation of Exchanges (WFE) recently launched a “first of its kind” course to address a major knowledge gap in how market infrastructures connect. We speak with Nandini Sukumar about why the Market Infrastructure Certificate (MIC) Program is unique in financial services and what some of the ambitious goals are.
While exchanges, central counterparties (CCPs) and central securities depositories (CSDs) sit in the center of capital markets, there’s surprisingly no specific educational certifications that address these integral aspects of the industry. Now, after some two years in development, WFE has teamed up up with Bayes Business School as MIC’s university educational partner to provide a professional qualification for graduates that can also be used as credits towards an advanced degree.
“People don’t understand how things work, how they fit together, how the ecosystem works, etc, (and) as a non-profit industry utility organization, our mandate is to educate our industry and stakeholders about what exchanges and CCPs do,” Sukumar said. “For us, it is not a commercial enterprise, it is about fulfilling the educational mandate from and on behalf of the industry.”
Expressions of Interest
The initial uptake has been from WFE’s membership as well as other capital market participants, including those working in the crypto and digital asset space, some of which are embedding MIC into HR training and development modules. But along with exchanges and clearing houses, the course is designed for mid-career professionals from across a broad spectrum — such as regulators, central banks, finance ministries, academia and consultancies — who find themselves interacting with market infrastructures.
At this stage, those who have expressed interest are all mid-level and she described this first cohort as “people with managerial responsibility, working from a particular department in the exchange who are looking for a more holistic perspective and also a more formal educational one.”
Much of the course is delivered online as a “blended” program for working pros across six broad themes: exchanges and market microstructure; market infrastructures; regulation and governance; environmental, social and governance (ESG) investing; technological innovation; and ethics. There is a “residential academic” week in London at Bayes, which will incorporate WFE’s working groups on current issues and trends, and a “practitioner” week hosted by Chicago’s Cboe, where senior leaders will be speaking to the students personally about trends in the industry, leadership and vision for the future of the industry.
“Chicago was a great place for it because we want it to be in a space where there is a big exchange presence and Chicago has a very storied history and tradition within the exchange industry,” Sukumar explained. “And Cboe have a lot of experience in education, because the options markets in general have been a shining role model in terms of how education, especially to retail investors, can build a market.”
Knowledge exchange dynamics
It’s an understatement to say that WFE’s membership base is comprehensive and diverse: of its 250 global members, 33% are in Asia-Pacific, 29% in Europe and the Middle East, 21% in the Americas and 17% in Africa. There are 91 member CCPs that hold some $1.3 trillion equivalent of resources in the form of initial margin and default fund requirements, while its exchange members list over 57k companies with a collective market capitalization of $101.2 trillion.
She added that before choosing Cboe, WFE polled its members and what came back was that everyone wants to understand how US exchanges work, while those from western exchanges were more geared to get a better grip on how Asian markets work.
There is an eye to expand the residential component to Asian markets, but based on demand, the first two of three committed years in establishing the course will stay in the US. Wherever the location is, the feedback was clear that interested candidates want to learn from big exchanges, which in Asia could include Hong Kong and China, Singapore, India, Japan or Korea, for example.
In terms of evaluating MIC’s success, some of the measures are rate of adoption as well as gauging interest in other courses with a similar structure, and potentially ones that are more introductory if demand rises. In the long-term, the WFE team wants the certificate to be a kind of “passport”.
“Exchanges tend to hire not so much from each other, but more from the financial markets, and therefore there were (job) candidates who came in with understanding of markets and finance but not particularly of the industry that they were entering, which is a specific industry with unique and defining, distinguishing characteristics. We would love to see this as the professional qualification that you can take to exchanges,” Sukumar said, adding that this could relate to CCPs and any other part of market infrastructure.