Brexit forces bankers move European stock trading out of London

Britain’s membership of the EU allowed the region’s banks and investors to bypass domestic stock exchanges such as Paris-registered luxury goods giant LVMH Moët Hennessy Louis Vuitton SE and Just Eat Takeaway.com NV, listed there in Amsterdam, the major food delivery company, and traded in London over other establishments. These outlets included Turquoise, a majority trading facility with the London Stock Exchange Group PLC, and the competing platforms Aquis Exchange PLC and Cboe Global Markets Inc.’s

European market place.

But with the Brexit trade agreement coming into effect Jan.1, that option came to an end.

The bloc was pushing for more control of EU stock trading during Brexit talks as part of its efforts to better compete with London, historically Europe’s main financial center.

Trading centers had been ready for the EU stock trade move after Brexit. The LSE’s Turquoise, for example, set up a European hub in Amsterdam in late November to trade European stocks. Cboe also has a center in Amsterdam. Aquis operates a platform in Paris for the same purpose. While jobs are unlikely to suffer, at least in the short term, numbers leaving London indicate that other city centers can compete effectively and support comparable services without lumps.

The LSE declined to comment on the trading volume levels of its Turquoise platform in Amsterdam on Monday. For Cboe, about 90% of its trading books of European stock had moved to its platform in Amsterdam on Monday. Prior to that, all of that measurement was handled in London. As for the Acquis, almost 100% of its European stock had shifted to Paris activity. That is up from a small level when the UK was still part of the EU.

“It’s an overnight moving business,” said Belinda Keheyan, head of marketing at Aquis.

The UK’s separation with the EU has already drawn a £ 1.2 trillion withdrawal, equivalent to around $ 1.6 trillion, of funds to Continental Europe since the 2016 Brexit vote, and has led to banks, exchange operators and other financial institutions to transfer and expand hundreds of employees. or set up new offices in Frankfurt, Paris and other European cities.

Officials at some exchanges say it is too early to determine whether European domestic stock markets will reap significant gains in trade volume on their exchanges as a result of the shift in activity to the mainland. -country. This is reflected in the market share data of various operators. For example, trading volume on the Deutsche Börse Xetra exchange currently represents around 14.4% of the total amount across European markets, according to Cboe, which monitors the data. That’s up from around an average daily allowance of 13.9% in December. However, Bolsa de Madrid ‘s market share in Spain and Euronext NV’ s European platforms segment include those in Amsterdam and Paris currently down from their December averages.

The movement in trading numbers of EU stocks coincided with a weakness in the pound, which traded 1.5% lower against the euro.

Jane Foley, Rabobank’s head of foreign exchange strategy, said that while the change in trade center could put pressure on the pound, news of the release of Covid-19 and vaccines against it hides the impact bith.

“Perhaps during this year that could be a little more obvious,” Ms Foley said. “We need more time to really look through the key factors. It’s very difficult to identify the factors that are slowing down either side. ”

—Caitlin Ostroff added to this article.