U.K. Rebuke Over EU’s Hard Line on Post-Brexit Stock Trading 

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(Bloomberg) — It’s widely assumed that a no-deal Brexit would trigger chaos for European stock markets. But the upheaval could be much worse unless the EU drops a plan to restrict trading on London exchanges after Britain leaves the bloc, the U.K. said Tuesday.

The U.K. Financial Conduct Authority warning came minutes after the Paris-based European Securities and Markets Authority said EU firms must trade certain stocks on platforms based in the bloc, and not on U.K. ones. The EU policy could apply even when a company’s main listing is in London, as is the case for AstraZeneca Plc, Rio Tinto Plc and Vodafone Group Plc.

“This statement by ESMA does fulfill its objective of providing certainty but most likely at the expense of market continuity, liquidity and definitely at the political expense of the U.K.,” said Sam Tyfield, a London-based partner at Vedder Price law firm.

The last-minute spat over equity trading stands in contrast to recent efforts by the U.K. and EU to work together to prevent a non-negotiated Brexit from disrupting markets. The EU, for example, has agreed to let European traders continue using derivatives clearinghouses based in London.

Brexit is set to happen March 29 unless the U.K. asks for a delay, and the EU agrees to extend the timeline. The bloc is expected to tell Theresa May that she must decide by mid-April whether to put Brexit off until 2020 or risk leaving in three months without a deal, a senior EU officials said Tuesday.

Read more: the plan to avert banking chaos in a no-deal Brexit

“We believe that only a comprehensive and coordinated approach can provide the necessary certainty to market actors,” the FCA said in a statement, which said firms could face overlapping obligations. “This has the potential to cause disruption to market participants and issuers of shares based in both the U.K. and the EU, in terms of access to liquidity and could result in detriment for client best execution.”

To contact the reporter on this story: Silla Brush in London at sbrush@bloomberg.net

To contact the editors responsible for this story: Ambereen Choudhury at achoudhury@bloomberg.net, Jesse Westbrook, Gregory Mott

©2019 Bloomberg L.P.

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