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Brexit clash over share trading would hit markets - UK watchdog

Brexit clash over share trading would hit markets - UK watchdog
FILE PHOTO: People walk through the lobby of the London Stock Exchange in London, Britain August 25, 2015. REUTERS/Suzanne Plunkett/File Photo -
Suzanne Plunkett(Reuters)
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LONDON (Reuters) – Overlapping British and European Union share trading rules would damage markets “to no good end” and can be avoided, Britain’s top markets watchdog said on Monday.

Britain is due to leave the EU on Oct. 31, but has yet to agree a divorce settlement with the bloc.

Brussels has said that if there is a ‘no-deal’ Brexit, investment firms in the bloc must trade euro-denominated shares in the EU; many are currently heavily traded in London.

Financial Conduct Authority CEO Andrew Bailey said some of this overlap must be avoided. “It is therefore easy to conclude that for those shares, market liquidity would be damaged to no good end,” Bailey said in a speech at Bloomberg.

He reiterated comments from the Bank of England that extensive preparations for a no-deal Brexit would not mean that all disruption in markets can be avoided.

Brussels has said that EU customers could continue using clearing houses for derivatives in London until March next year if there is a no-deal Brexit.

This date was reflected Britain’s original plan to leave the EU last March. Bailey said Brussels would need to grant an extension soon if there is a no-deal Brexit.

There is no reason to “sacrifice open financial markets” and many reasons to preserve them, Bailey said.

(Reporting by Huw Jones; Editing by Catherine Evans)

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