Aquis Exchange revises no-deal Brexit share trading strategy

FILE PHOTO: The Canary Wharf financial district is seen at dusk in London
FILE PHOTO: The Canary Wharf financial district is seen at dusk in London, Britain, March 26, 2019. REUTERS/Marika Kochiashvili/File Photo

April 9, 2019

By Huw Jones

LONDON (Reuters) – Aquis Exchange has revised its no-deal Brexit strategy in an effort to steal a march on rivals in the face of curbs on where investors can buy and sell stocks.

The pan-European stock trading platform said on Tuesday that customers would be able to trade EU27 listed stocks in London as well as on its new Paris platform from Monday morning if the UK leaves the European Union without an exit deal. UK and Swiss shares would continue to be offered in London only.

Britain is due to leave the EU on Friday unless it secures a “standstill” transition agreement to avoid a disruptive departure. Prime Minister Theresa May will ask an EU summit on Wednesday for a delay until at least the end of June.

“Most volume in EU27 stocks would probably be done in London,” Aquis Chief Executive Alasdair Haynes said in a statement.

It originally planned to offer EU27 stocks in Paris only to avoid harming prices by splitting trading.

Larger rivals Cboe and London Stock Exchange’s Turquoise, which have new EU hubs in Amsterdam, have announced similar changes. Aquis says it was going a step further by offering EU27 shares in London immediately after a no-deal Brexit to stop national exchanges in the bloc taking the business.

Cboe and Turquoise have said they would seek to reintroduce EU27 shares in London later in the year.

The EU’s markets watchdog ruled last month that fund managers could only trade 6,200 shares in the bloc if Britain leaves without a deal. These are mostly EU27 listed stocks but also include 14 from Britain.

If Britain’s Financial Conduct Authority takes tit-for-tat action to require UK and many EU shares to be traded in Britain, it would give Aquis an early advantage over Turquoise and Cboe.

Such a retaliatory move was “highly likely”, Haynes said. The FCA has declined to comment on its plans.

Aquis will revert to its preferred plan of trading EU27 shares only in Paris when it is clear the FCA won’t introduce trading curbs, Haynes said.

“My understanding is that the UK government does not want to see EU27 business move from London to Europe and will do whatever it can, unless some form of equivalence or financial services deal is agreed, to allow business to remain in London,” he said. Trading in European government bonds and repurchase agreements on CME’s London unit has already moved to Amsterdam.

(Reporting by Huw Jones, editing by Mike Harrison)

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