* UK watchdog says won't replicate EU "restrictions"
* Bankers say FCA clarification minimises disruption
* Cboe says ready for UK and EU share trading regime
* LSE's Turquoise eyes Nov. 30 launch for Dutch hub
(Adds industry reaction, market share figures)
By Huw Jones
LONDON, Nov 4 (Reuters) - Banks and asset managers in
Britain can continue using exchanges in the European Union to
trade shares from January, Britain's financial regulator said,
contrasting with a more restrictive EU approach that poses a
risk to London's market dominance.
Britain left the EU in January and full access to the bloc
under transition arrangements ends on Dec. 31, leaving both
sides to decide - in the continued absence of accords on two-way
financial market access - where investors in their jurisdictions
can trade, known as the share trading obligation or STO.
The EU's securities watchdog ESMA has already said that from
January investors from the bloc can only trade EU company shares
in London if the shares have a sterling listing.
This would split markets by forcing chunks of trading in
euros to move to the EU from London, Europe's centre for
multi-currency cross-border stock trading on platforms such as
the London Stock Exchange's Turquoise, Cboe, and Aquis Exchange.
The three London-based platforms accounted for nearly 30% of
pan-European share trading on Tuesday, worth about 10 billion
euros ($11.7 billion).
Britain's Financial Conduct Authority (FCA) said on
Wednesday it would allow firms it regulates to continue trading
all EU shares on trading venues headquartered in the bloc, where
they choose to do so, refusing to mirror ESMA's currency
restrictions.
The FCA said its stance would keep international markets
open and preserve the ability of UK-based firms to execute their
share trades where they can get the best deal for customers.
"While we note ESMA’s recent clarifications to reduce the
potential overlap of an EU and UK STO, we chose this simple and
comprehensive approach rather than to replicate restrictions
based on the jurisdiction of the share issuer, or the currency
in which a share is issued," said Nausicaa Delfas, the FCA's
head of international.
The best solution would be for the EU to grant full share
trading access for Britain under its "equivalence" regime, she
said, but Brussels has yet to say if it will grant such access.
John Liver, a financial services partner at consultants EY,
said the FCA statement would prove a boost for competition and
choice in share trading that would be welcomed by the industry.
Banking and markets body AFME said the FCA statement would
help minimise disruption, and that it supported open markets and
global competition between trading venues.
Turquoise, Cboe and Aquis have set up EU hubs in
anticipation of a clash in share trading requirements.
Cboe said it was operationally ready for both UK and EU
STOs. Turquoise, which will launch its Amsterdam hub on Nov. 30
if the EU has not granted access to Britain by then, declined to
comment. Aquis had no immediate comment.
($1 = 0.8538 euros)
(Reporting by Huw Jones; Editing by Gareth Jones and Mark
Potter)
