Tuesday 27 September 2016

London mega-trading exchange hints at Dublin move amid City unrest

Huw Jones

Published 27/08/2016 | 02:30

An employee looks at financial data on computer screens, in front of a view of The Shard building
An employee looks at financial data on computer screens, in front of a view of The Shard building

One of Europe's biggest stock exchanges, Bats Europe, could open a base outside London following Brexit, with Dublin a possible contender - voicing doubts about whether the City of London would secure sufficient access to the European market.

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Bats Europe accounts for about 24pc of daily trading in European shares and a shift of UK operations of one of the financial sector's biggest success stories would be a blow to London's prestige as a global financial centre.

Barring a clear sign that Britain will get full access to the single European market, Bats will begin work on setting up a second base next year if Brexit is expected in 2019, Bats Europe chief executive Mark Hemsley told Reuters.

He said while no firm decision had been made on whether to relocate some operations to the European Union if Britain leaves the bloc, there was no real alternative as things stand.

"If I look at the current scenarios, the only one that does give certainty to your customers is to actually have an entity within an EU country," Mr Hemsley said, citing Dublin as a possible location.

"Until we see a path that tells us otherwise, that will be the most likely outcome at the moment."

Uncertainty about what kind of trade deals Britain will be able to negotiate with Brussels is forcing many companies with pan-European businesses to come up with contingency plans.

The comments by Bats Europe's ceo are the latest sign firms are wary about waiting too long for fear of losing customers.

Financial firms based in London use a so-called EU passport to offer services across the bloc from one base, but few expect to have continued full access to Europe's single market after Brexit.

While Britain will negotiate new trade terms with the EU, Mr Hemsley said all the scenarios aired so far - being part of the European Economic Area like Norway, bilateral deals like Switzerland and Canada, "equivalence regimes", or relying on World Trade Organisation rules - were problematic.

British Prime Minister Theresa May has talked of a "bespoke" deal with Europe but so far there have been no details and much hinges on what terms EU member states will accept.

Bats Europe was created in 2011 when US Bats snapped up Chi-X Europe, then a four-year-old trading platform that had became one of Europe's biggest exchanges, eclipsing national exchanges that are centuries old in some cases.

Mr Hemsley said he was open-minded about which country Bats would chose but said Dublin was attractive.

"We are looking at the underlying legal framework of a country and Ireland is quite attractive because it's the most similar to the UK structure," Mr Hemsley said.

"We look at local tax environments, labour laws, availability of personnel. We are open minded, but Dublin is attractive on a number of those levels." (Reuters)

Irish Independent

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