Cees Vermaas, CEO of The International Stock Exchange (TISE), looks at how business leaders should consider today’s uncertain environment in the context of emerging opportunities in technology and sustainability.

On the face of things, there are several reasons to be less optimistic about the near future.

We are living in an environment conditioned by Brexit, we continue to feel the (after) effects of the global pandemic and now there is a military conflict in Europe. The injuries and loss of life from both COVID and the war are horrendous and they are the most important impacts.

Beyond that though, there are increasing global supply chain problems, which have now also reached energy products at a time the world is trying to wean itself off fossil fuels. Across the board, prices are being pushed up and in turn, central banks are seeking to tackle these inflationary effects by raising interest rates. There is so much uncertainty about how this all will affect markets in the medium to long term.

“We should continue to execute our strategy in a careful but positive way because we need to recognise that adversity and uncertainty in markets drive innovation and enterprise.”

It is these macro conditions which business leaders, such as myself, must consider as we seek to execute our strategies during the coming year and beyond. We should continue to execute our strategy in a careful but positive way because we need to recognise that adversity and uncertainty in markets drive innovation and enterprise. For example, some of the biggest challenges facing us might be at least partly solved through the two distinct but connected themes of technology and sustainability. Embedding technological change and sustainable action within an organisation is crucial for addressing the current challenges and maximising the potential opportunities which they may offer.

At The International Stock Exchange (TISE), which is headquartered in Guernsey, we once again set new annual records for listing volumes and financial performance in 2021. We remain focussed on what we are good at – the efficient and secure listing of bonds – and have taken steps to expand our geographical reach and scale up our listing business in the UK, Europe and globally. Besides this, we are exploring ways to develop and grow our product and service offering across the exchange value chain, including through the opportunities offered by technology and sustainability.

Technology

Building on our position as a major European professional bond market, we have enhanced our international bond listing proposition through the introduction of our Qualified Investor Bond Market (QIBM). As well as a revision of the listing rules and fees, we have improved our operational processes to maintain the very highest standards of client service across our expanding market. These changes have enabled us to introduce the TISE Guarantee, which is an industry competitive standard of a “3+1” day timeframe for the review of listing applications across both our bond and equity markets.

We are also investing in technology that will provide us with an operating platform which enables us to add significant scale in our core markets and service a diversified range of products. Our online member services portal, MyTISE, provides a secure and efficient tool for the submission of listing applications and we have been working hard behind the scenes on upgrading the supporting technology to expand the functionality it provides our members.

“We are also investing in technology that will provide us with an operating platform which enables us to add significant scale in our core markets and service a diversified range of products.”

In addition, we have launched our new bespoke auction trading system, NOVA. This state-of-the-art auction platform provides an automated price discovery and transaction model which is an attractive addition to our equity market and is central to our efforts to improve liquidity in our secondary market. It enables us to deliver even greater value to our current equity issuers of REITs, funds and ‘domestic’ equities, and provides a flexible platform which can be adapted to support new products and services for a whole new range of potential clients and participants in the equity capital markets arena. We can see the potential to attract more retail focused REITs and funds which want (expanded) secondary market trading. 

Sustainability

As a Partner Exchange of the United Nations’ Sustainable Stock Exchanges Initiative (UN SSE), TISE has sustainability as a key strategic theme, both in terms of how we operate as a business and as a facilitator of global capital flows. We have put that into action by launching a comprehensive sustainable market segment, TISE Sustainable, to encourage greater sustainable investment.  

Recent admissions have included the first humanitarian catastrophe bond covering purely volcanic eruption; green bonds issued by the largest sustainable property developer in the UK, Canary Wharf Group, and UK telecommunications company VMED O2; sustainable bonds issued by a sovereign, The Isle of Man Treasury; and sustainability-linked bonds from several international companies across a range of industries.

“We have… a comprehensive sustainable market segment, TISE Sustainable, to encourage greater sustainable investment.”

During the last year alone there were more than £8 billion of new listings on TISE supporting environmental, social and sustainable initiatives. This demonstrates both the supply and demand for investment which supports the environment and/or society, and a common feature of many underlying initiatives is the use of technology to transition to a more sustainable future.

Through strategic action on sustainability and coherent investment in new technology, at TISE we have now laid the base for a more diversified and scalable business model which puts us in an excellent position to make the most of the opportunities which emerge in a post-Brexit, post-pandemic world.

This article was originally published on FT.com, April 2022