Lawyer Blames The Absence Of Clarity About Financial Services In TCA
A leading lawyer says that the news that London is losing out to Amsterdam as the premier share trading hub is worrying, but not surprising given the lack of detail about the future relationship of financial services between the EU and UK contained in the Brexit trade agreement.
According to a report in the Financial Times, the latest data from CBOE Europe found that Amsterdam overtook London as Europe’s largest share trading centre last month.
It revealed that an average €9.2bn shares a day were traded on Euronext Amsterdam and the Dutch arms of CBOE Europe and Turquoise in January, a significant increase from December.
Meanwhile volumes in London fell sharply to €8.6bn, dislodging the UK from its historic position as the main hub for the European market.
The shift in power is being caused by the fact that the EU currently does not recognise the UK exchanges and trading venues as having the equivalent supervisory status as its own.
“The shift to Amsterdam is worrying for London’s status as the premier financial centre in Europe, however the shift is unsurprising and was always going to be an inevitable consequence of the absence of clarity or detail on the future relationship of financial services between the EU and UK contained in the Trade Agreement.
“The numbers should be a stark reminder to the UK Government to prioritise the continued negotiations with the EU (due to be concluded by 31 March 2021) to ensure that UK exchanges obtain unfettered access to EU financial markets and institutions or at the very least equivalence, albeit difficulties around permanency can arise with mere equivalence.
“The current situation leaves many financial businesses with a lack of clarity on how they might perform their business in the future and is leading to increased costs for many who perceive that the best option is to set up a branch within the EU rather than seeking regulatory approval in each of the remaining 26 jurisdictions.
“The sticking point is thought to be that to secure equivalence the EU is likely to demand to be notified and informed of any future changes to the way in which the UK might regulate financial services in the future. This flies in the face of removing power and oversight from Brussels. Something has got to give however and with each headline that points to huge shifts in trading to EU markets the case for conceding some oversight to the EU to obtain equivalence for such a key sector grows.”
Craig Weston – Barrister & Senior Associate
For the latest news and legal information visit our Brexit Hub by clicking here