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Brexit pushes almost 100% of European share trading off UK venue

First trading day since Brexit shows early damage to London

Brexit deal | European Union

Viren Vaghela Anna Edwards & Matthew Miller | Bloomberg 

The City of London lost its rights to access the single market on Dec 31
The City of London lost its rights to access the single market on Dec 31

Aquis Exchange, London’s second-biggest venue for trading European shares, has seen almost all of this business shift into the on the first trading day since Brexit.

Chief Executive Officer Alasdair Haynes told Bloomberg TV on Monday that 99.6 per cent of its European share trading moved to its parallel venue in Paris.

“Europe has clearly won the battle for its own share trading,” he said. The shift “is a spectacular own goal as Britain is now losing its very strong position in trading of European equities in London,” he said.

The City of London lost its rights to access the single market on December 31 and the EU has not permitted investors inside the bloc to trade shares in companies such as Airbus SE and BNP Paribas SA from the UK.

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Haynes said he is pessimistic about the EU granting trading rights through the equivalence process, citing Switzerland’s troubles on the same issue in 2019. After Boris Johnson struck a Brexit trade deal on December 24, the two sides outlined a March deadline for a memorandum of understanding around the regulation of financial services, a key driver of the UK economy.

“The talk of equivalence being granted in the next few months is in dreamland,” said Haynes. “It will take years if ever to get equivalence.”

Britain will change its rules to attract issuers and investors to the UK market but won’t necessarily enable EU share trading in London, according to Haynes.

“This horse has bolted so far it’s now in a different stable,” he said. “To get it back you have to do something pretty revolutionary.”

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First Published: Tue, January 05 2021. 01:43 IST