FCA Delay Rules for Trading EU-Listed Shares in London


It seems the U.K. regulator, the FCA is delaying while waiting for the EU summit scheduled for October 15-16 to decide on rules for trading EU-listed shares in London.

October 1, 2020 | AtoZ MarketsThe Financial Conduct Authority’s (FCA) will wait at least until the European Union summit this October before deciding on its rules for trading EU-listed shares in London from January.

Banks seek clarity on EU-listed shares after full Brexit

U.K. banks now seek clarification on where they must execute customer orders for EU-listed shares after the expiration of Britain’s Brexit transition arrangements in December.

Cboe Europe, Aquis Exchange, and Turquoise are among the platforms which offer one-stop trading both in shares listed in Britain and from across the EU.

This week, EU member states and their executive body discussed their share trading obligation (STO) which sets out where EU-based brokers must trade EU-listed shares from January.

The STO would determine the extent to which the City of London could be blocked as the EU builds “autonomy” in capital markets after the departure of its biggest financial center.

While the FCA welcomed these talk, Nausicaa Delfas, Executive Director of International said on Thursday that “equivalence” or full two-way share trading access, would be the best solution and avoid any “overlaps.”

“We will set out our own approach to the STO”

Yesterday, a senior EU official said that Britain’s decision to diverge from some EU rules was making it difficult to access its financial services. The FCA will also have to establish its own policy on share trading. For this reason, banks fear being the target if it overlaps with the EU plans.

The U.K. regulator is monitoring trade talks ahead of an EU summit scheduled for October 15-16. According to Delfas, the STO is the “remaining issue” in the FCA’s preparations for a full Brexit.

Read also: ESMA Will Review New UK Financial Markets Rules after Brexit

“We will set out our own approach to the STO … before the end of the year, including our expectations on how firms can comply with the reciprocal requirements. It’s important to maintain open markets and liquidity to enable best execution,” Delfas said.

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