January 24, 2019 / 7:33 AM / 4 months ago

UPDATE 2-Aquis beats rivals to EU share trade licence ahead of Brexit

(Recasts with Cboe’s Hemsley, chart)

By Huw Jones

LONDON, Jan 24 (Reuters) - Pan-European stock trading platform Aquis Exchange has secured French regulatory approval for a new hub in Paris, putting it ahead of rivals in preparing for a potentially disruptive British exit from the European Union.

With just over two months before Brexit day on March 29, Aquis and rivals Cboe and Turquoise are racing to get approval for EU hubs that would help them cope in the event of a disorderly departure.

Britain has yet to agree withdrawal terms with the EU, which are vital for cross-border trading to continue uninterrupted.

Graham Dick, currently head of sales and business development at Aquis Exchange in London, will relocate to Paris to become chief executive of the new hub, Aquis said on Thursday.

Aquis accounts for 3-4 percent of European share trading.

“We are now very well positioned to offer our members an uninterrupted service, whichever form Brexit takes,” said Alasdair Haynes, founder and chief executive of Aquis Exchange in London.

Sector leader Cboe Europe, and the London Stock Exchange’s Turquoise have yet to obtain a licence for new hubs in Amsterdam.

While the number of jobs relocating from London to the new hubs will be modest, large volumes of euro-denominated share trading is expected to shift out of Britain.

London hubs would then be left trading UK and Swiss shares.

Mark Hemsley, president of Cboe Europe, said he expected EU-based users of Cboe Europe - and UK users like banks which have opened EU hubs themselves - to trade in Amsterdam instead of London.

“We are going to put the EU27 stocks in Amsterdam, and the Swiss and UK stocks in the UK. What we are trying to do is keep the liquidity together,” Hemsley told reporters on Wednesday.

The shift in share trading could be paralleled by moves in clearing from London to venues such as EuroCCP in the Netherlands, exchange officials said.

The move in euro share trading also mirrors the fixed income market where CME’s BrokerTec is moving all trading in euro-denominated bonds from London to Amsterdam to avoid splitting up liquidity.

The London Stock Exchange will move its MTS euro-denominated government bond trading from London to Italy by March.

Deutsche Boerse’s Eurex in Frankfurt and London-based ICE dominate exchange derivatives but all of ICE Futures Europe trading takes place in London and it had no comment on Brexit plans.

Officials familiar with ICE said negotiation between ICE and Dutch and German regulators to allow cross-border business to continue in the event of a no-deal Brexit were well underway. No such agreement is needed for France.

Reporting by Huw Jones; Editing by Mark Potter

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