By Francesco Guarascio and Huw Jones
BRUSSELS/LONDON, Sept 28 (Reuters) - European Union member
states and their executive body are at odds over how much
trading in EU company shares can take place in London after full
Brexit in December, an EU document showed.
Britain's unfettered access to the EU market for financial
services ends on Dec. 31, which could leave the bloc's banks and
investment funds barred from London's deep stock markets if no
fix is agreed by Brussels.
The EU is deciding to what extent, if any, it will allow
banks and investment funds in the EU to trade the UK-listing of
major EU headquartered company shares on platforms in London.
EU member states were due on Monday to discuss this share
trading obligation or (STO), according to a leaked document and
agenda drawn up by current EU president Germany and seen by
Reuters.
The bloc's executive European Commission does not want to
make regulatory changes at this point "due to the implications
such an amendment could have on talks" between Britain and the
EU on a future trade deal, the document said
Those talks continue this week and offering more flexibility
now to the City of London on access to the bloc could weaken
what is seen by Brussels as a bargaining chip.
While EU states don't question that the STO might need
fixing, some states back the Commission's call to delay
discussion until an in-depth review of EU securities rules next
year, the document said.
Some states also back a fix that EU securities watchdog ESMA
has proposed to inject more flexibility into the STO.
Euro-denominated shares of EU companies are heavily traded
in London on Cboe, Aquis Exchange and the London Stock
Exchange's Turquoise platform.
All three have set up hubs in the EU, though switching
trading to those locations would fragment markets and
potentially bump up costs for users.
(Reporting by Francesco Guarascio in Brussels and Huw Jones in
London, editing by Ed Osmond)
