FCA tells EU that action is required to avoid Brexit disrupting financial markets
The UK Financial Conduct Authority has told the EU it must be more accommodating to avoid overlapping share trading rules damaging markets ‘to no good end’.
The UK Financial Conduct Authority (FCA) said that overlapping British and EU share trading rules will see market liquidity damaged ‘to no good end’ on Monday.
Officials in Brussels have warned that in the event of a no-deal Brexit, investment firms in the EU will be forced to trade approximately 6,200 euro-denominated stocks in the block, with the majority heavily trade on the London.
'It is therefore easy to conclude that for those shares, market liquidity would be damaged to no good end,' Financial Conduct Authority CEO Andrew Bailey said in a speech at Bloomberg.
FCA urges Brussels to permit temporary trading equivalence
To avoid the overlap from fragmenting trading, the FCA has requested the EU grant temporary equivalence, allowing cross-border share trading to continue in the event of a no-deal Brexit – something that Brussels has already granted for derivatives clearing.
However, the EU has so far rejected permitting temporary equivalence to rectify the issue.
FCA: EU and UK must advance no-deal preparations
The FCA admitted that financial sector preparations for a no deal Brexit have advanced over the course of this year, but that several issues remain one form or another which require further action, either in the UK or the EU.
Britain is set to leave the EU on October 31 and, as it stands, will bail out without a deal, with the UK government yet to agree a withdrawal agreement with the bloc.
‘We stand ready to enter into dialogue with our European counterparts before we finalise our approach,’ Bailey added.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Trading around Brexit
Find out how Britain’s EU exit continues to affect traders, and discover:
- How you can trade on Brexit
- The markets you should be watching
- Brexit trading strategies for key assets
Live prices on most popular markets
You might be interested in…
Find out what charges your trades could incur with our transparent fee structure.
Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.
Stay on top of upcoming market-moving events with our customisable economic calendar.