The London Stock Exchange (LSE) will move part of its government bond trading to Milan ahead of Brexit.
Part of LSE's electronic government bond trading platform, MTS Cash, which trades an average of €13.4bn per day (£11.9bn) will return to Italy in preparation of Britain's exit from the EU.
The move, first reported by the Financial Times, would enable cross-border trading to be unaffected by a potential no-deal Brexit.
The LSE group acquired MTS Cash when it bought Borsa Italiana – Italy's only stock exchange – in 2007.
MTS began life as a partnership between the Bank of Italy and the Italian Treasury for banks to bid for bonds.
British government bonds will still be traded through the London wing of MTS but all European dealings would shift to Milan.
It could be effective from March 1, a source close the matter told Reuters yesterday.
Rival BrokerTec, part of CME, is also moving trading in euro-denominated repos and government bonds from London to a new hub in Amsterdam.
The LSE unveiled its no-deal contingency plans earlier this year, which included applying for licences in Amsterdam for its Turqoise, TRADEcho and UnaVista platforms.