Britain's FCA plays for time on EU share trading in London

© Reuters. FILE PHOTO: The Canary Wharf financial district is seen in east London

By Huw Jones

LONDON (Reuters) – Britain’s financial watchdog will wait at least until a European Union summit this month before deciding on its rules for trading EU-listed shares in London from January.

Banks are seeking clarity on where they must execute customer orders for EU-listed shares after Britain’s Brexit transition arrangements expire at the end of December.

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

EU states this week discussed their so-called share trading obligation (STO) which sets out where EU-based brokers must trade EU-listed shares from January.

This would determine the extent to which the City of London could be locked out as the EU builds “autonomy” in capital markets after the departure of its biggest financial centre.

Although the Financial Conduct Authority (FCA) welcomed these talk, its head of international, Nausicaa Delfas, said on Thursday that “equivalence” or full two-way share trading access, would be the best solution and avoid any “overlaps”.

A senior EU official said on Wednesday that Britain’s decision to diverge from some EU rules was making it harder to assess access for its financial services.

The FCA will also have to set out its own policy on share trading and banks fear being caught in the crosshairs if it overlaps with the EU plans.

The watchdog is monitoring trade talks ahead of an EU summit on October 15-16, and Delfas said the STO is the “remaining issue” in the FCA’s preparations for a full Brexit.

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“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,” Delfas told Reuters.

“It’s important to maintain open markets and liquidity to enable best execution,” she added.

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