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The UK will have to reverse the ban on trading in Swiss shares after its exit from the European union.
The Treasury plans to enact legislation in the next few days that will take effect three weeks later if approved, according to a spokesman. History was the first as reported by the Financial Times.
“Once in force, the Swiss Secretary of State for International Financial Affairs has indicated that it will respond by removing restrictions on UK trading venues,” the spokesman said.
The move has been expected. In September, the UK confirmed that it would introduce legislation as soon as its equivalence powers came into force. Currency exchange operator Cboe Europe has said it plans to reintroduce Swiss-listed securities to the UK once British and Swiss mutual recognition has been implemented.
The UK allowing it to trade Swiss stocks will do little to overcome the exodus of EU stocks after Brexit. The three most important places in London managing European stocks saw almost all of this business shifted to the EU on the first day of negotiations after the UK ended its exit from the bloc on 31 December.
Read more: Brexit boosts most of Europe’s actions in the negotiation of major UK sites
Acquis Exchange Plc CEO Alasdair Haynes told Bloomberg TV on January 4 that 99.6% of its European shares moved to its parallel headquarters in Paris. Cboe Europe saw 90% move to its Amsterdam headquarters, while 92% of these transactions on the London Stock Exchange Group Plc turquoise platforms were within the block at three in the afternoon in London on January 4, the first day of negotiations after Brexit. The movements represent about 4.6 billion euros ($ 5.6 billion) in operations, according to data from Cboe Global Markets Inc.
Brexit deficit
More than $ 5 billion in European shares left London for EU headquarters on January 4
Source: Cboe Global Markets
A the political row led to the The Swiss stock market lost EU recognition in 2019, a move the UK had to comply with when it was still a member of the bloc. Now Brexit has freed him from these limitations.
London’s dominance as a center for investment management is also uncertain. The European Commission is studying whether to strengthen rules on how EU-based funds delegate portfolio management to investors outside the bloc. While delegation is unlikely to be banned, Brussels could make the management of funds from third countries such as the United Kingdom more expensive by increasing compliance and governance obligations.
Britain and the EU have agreed to draft a memorandum of understanding on the regulation of financial markets before March, an agreement that will complement the broader Christmas Eve trade agreement but will not be as legally binding. An agreement would still help establish a framework for granting equivalent access to each other’s markets, with predictable rules and proper consultation on any decision to withdraw access.
– With the assistance of Tom Metcalf
(Updates with FT that previously report the story in the second paragraph.)