EU’s markets watchdog warns of split share trading if no-deal Brexit
05 Jun 2019

European Union preparations for a no-deal Brexit would split stock markets in Europe, although the damage could be reduced if Britain spelled out in advance its approach to trading, a top EU regulator said on Tuesday.

The EU angered market participants in March when it said that if there is a ‘no-deal’ Brexit, investors in the bloc would only be able to trade shares which are listed in continental Europe as well as 14 which have a listing in Britain.

London is the centre for share trading in Europe, even for many non-UK shares, leaving EU asset managers facing a split pool of liquidity and less competitive prices.

After a spat with Britain’s Financial Conduct Authority (FCA), the European Securities and Markets Authority (ESMA) last week partly reversed its “share trading obligation” (STO) so that EU investors could still trade the 14 shares in London.

“Despite this adjustment … the STO will fragment markets and, being a supporter of open markets, I regret that result very much,” ESMA Chair Steven Maijoor told a Federation of European Exchanges conference in Dublin.

By Huw Jones, Reuters, 4 June 2019

Read more at Reuters

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