The Financial Sector of London began to feel the negative effects of Brexit on the very first trading day after the exit of the UK from the common market. On January 4, transactions with shares of companies from the EU countries almost € 6 billion moved from City to sites in continental Europe.
International investors have long been accustomed to trade without any restrictions nominated in the euro shares in the main financial center of Europe - London. Bidding walked on platforms such as CBoe Europe, Turquoise and Aquis Exchange. However, after the final placement of the UK with the EU in London, bidding with shares of companies such as French Total, German Deutsche Bank or Spanish Santander, according to Refinitiv, were transferred to their origin for them - to Paris, Frankfurt and Madrid or to continental electronic platforms.
The latter created units in the EU at the end of last year, waiting for the end of the transition period, which lasts a year after the official Brexit. CBoe Europe has 90% of the volume of trading in the euro, or more than € 3.3 billion, 4 January was committed in Amsterdam. In the same place, the transactions and Turquoise, which controls the London Stock Exchange Group. Aquis reported that the New Year holidays transferred to Paris "almost all" turnover.
Until January 4, trading in shares of companies from the EU at the continental sites of these electronic stock exchanges practically did not go.
"It was an extraordinary day. Translate liquidity [to another place] - one of the most difficult tasks. And this is not even a "big explosion," said Aquis CEO Alicender Haynes, recalling the name of a large-scale exchange reform of the 1980s. in London. "This is an explosion - and everything is lost." City lost its business in European shares. "
True, this is not the largest sector in London's exchange trading, but its disappearance means the loss of tax revenues from this activity for the British government. In addition, companies will now have more incentives to place shares on the Exchange of Continental Europe, learning from more active trade and high liquidity, Haynes believes.
Trade systems and large investment banks in London not one decade played a leading role in cross-border trade; Up to 30% of transactions with shares of EU companies held through City. But in the Trade Agreement between the United Kingdom and the EU, signed at the end of December, for the sector of financial services, there was practically no place. Brussels refused to recognize most of the financial regulation systems by the "equivalent" of their own, so it became impossible to carry out transactions with shares in euros from January and trade moved to the territory of the Union. The organizers of trading in London, however, providing it, in recent years prepared for moving.
Brussels insisted on strengthening his supervision for operations with all asset nominated in euros. Since this activity is considered strategically important, the EU intends to reduce its dependence on London in the financial sector. On Monday, the regulatory authorities also withdrew the license of six British credit rated agencies and four trade repositarians - organizations carrying out the collection and storage of data on operations with financial instruments. European companies and investors will now have to use the services of EU organizations.
Haynes doubts that the EU in the foreseeable future will be allowed to return the bidding with shares of European companies in London - if at all allowed someday.
Translated Mikhail Overchenko