In the first day of trading since Britain left the EU, trading in euro-denominated shares has shifted away from the City to new platforms.
The City’s unfettered access to the bloc ended on New Year’s Eve, meaning EU banks and asset managers must use a platform inside the bloc for euro share trading.
The Brexit deal agreed before Christmas does not cover financial market access. Hours before the exit, the UK’s market regulator said it would temporarily allow UK financial firms to use venues in the bloc.
Without the intervention UK and EU participants would have been unable to trade swaps given the EU had refused to lift its own ban on trading swaps on platforms in London.
“The FCA continues to view the agreement of mutual equivalence between the UK and EU as the best way to avoid disruption for market participants and avoid fragmentation of liquidity in DTO products,” the FCA said in a statement.
“We will consider by 31 March 2021 whether market or regulatory developments warrant a review of our approach.”
Trading on Cboe Europe, the London Stock Exchange’s Turquoise units in Amsterdam and Aquis Exchange’s new Paris platform grew steadily in morning trade. No European trading had previously taken place on the hubs until today’s shift.