[ N E W S R E V I E W | B R E X I T ] an agreement on equivalence post-Brexit , and this has driven euro-denominated business such as EU share trading , back to the bloc . Various amendments were made to the share trading obligation ( STO ) by EU regulators pre-Brexit , finally stating in October that only stocks with a European Economic Area ISIN could trade on a UK trading venue if traded in pound sterling . This allowance accounted for only 1 % of EU share trading activity .
What ’ s more , after years of negotiations , the trade deal between the UK and the EU agreed upon on 24 December all but ignored financial services . UK based pan-European trading venues Cboe Global Markets , Aquis Exchange and the London Stock Exchange Group ’ s ( LSEG ) Turquoise found themselves facing a “ no deal ” Brexit , each opting to open European counterparties and relocate euro-denominated share trading businesses .
Most recent was Turquoise , putting in place a Brexit contingency plan for the launch of Turquoise Europe in Amsterdam in November in the event that the UK and the EU could not reach a decision of equivalence .
This decision proved itself to be make or break as on the morning of 4 January , Aquis Exchange , Cboe Global Markets , and Turquoise opened trading to find that north of 90 % of their EU share trading volumes had migrated over to their European entities . Cboe Global Markets reported that 97 % of its EU share trading volumes had moved to its European entity and with no signs of coming back .
“ What is left in the UK in EU names is really more exchange traded funds ( ETFs ) and a little bit of residual liquidity from international investors ,” explains Dave Howson , president of Cboe Europe .
Turquoise reported similar statistics , revealing that on average during the period from 4 to 28 January , 96 % of its daily activity for EEA securities was now taking place on Turquoise Europe . In the same period , an average of 69 % of notional activity was taking place on Turquoise Europe .
“ Lit trading activity of EEA stocks at Turquoise has , for the most part , seen a complete shift across to the EU venue ,” says Scott Bradley , head of business development , Turquoise and LSE cash equity secondary markets .
It ’ s never coming back If there is no decision on equivalence , these volumes are very unlikely to return to the UK . It is not impossible for the UK to be granted equivalence for share trading at some point in the future , however , that being said it is extremely unlikely and without it there is no way for these volumes to find their way back .
Brussels has proved itself keen to assert authority over euro assets that were previously under the control
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