Cboe Europe is to set to open an Amsterdam hub that will allow investors across the EU to trade shares of companies based in the bloc, whether or not Brexit happens as planned at the end of October.
The stock exchange group, which has an established London operation, will go ahead with its planned launch date of October 1 for a parallel Netherlands operation, even as some UK legislators this week try to prevent their country from leaving the EU without a deal.
Cboe, the largest share trading venue in the region, has received approval to operate a venue from the Dutch capital. It postponed plans to open it in March when the UK was given an extension to leaving the EU.
Mark Hemsley, president of Cboe Europe, said its customers had some outstanding challenges to address before Brexit, such as a regulatory mandate that demands that EU-registered investors have to trade certain shares only on exchanges based in the EU.
The UK is expected to draw up its own rival list of EU-based stocks that can only trade in London if there is a no-deal Brexit. “We may as well try and get our entities going and see how they respond,” Mr Hemsley told the Financial Times.
On Monday Cboe’s Amsterdam unit began accepting the reports of equity deals that had been privately negotiated. More than €1.3bn of deals were reported, with Paris-listed shares accounting for the greatest portion of that total.
The London equities market, the biggest in Europe, faces a split should Britain leave the EU on October 31 without a deal. Regulators and investors have warned that the complex network of cross-border deals would be fragmented by the UK’s sudden departure from the EU, and it may raise overall trading costs.
After October, Cboe will also trade UK and EU27 stocks in London but only trade EU stocks in Amsterdam. It has the authority to operate regulated markets, benchmark indices and trade reporting units in the Netherlands.
Amsterdam has become one of the biggest winners from the City’s need to make alternative arrangements to adjust to life after Brexit and access EU markets.
Rival equities venue Turquoise, which is majority-owned by the London Stock Exchange, and fixed income trading venues such as Bloomberg and CME Group are all setting up operations in the Dutch city, having been won over by the authorities’ pitch of extensive transport links and telecom connections.
Turquoise is waiting for further clarification on the outcome of the Brexit negotiations, a spokesperson said. Aquis, which has 12 stocks trading on its Paris venue, is due to go live with its full service of hundreds of stocks on November 1.
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