CME says euro trading has moved to Amsterdam ahead of Brexit

[March 18, 2019]   By Huw Jones

LONDON (Reuters) - Euro-denominated government bond, repurchase agreement and foreign exchange trading at CME Group has moved from London to Amsterdam to avoid disruption from Brexit, the exchange said on Monday.

CME Group, one of the world's biggest exchanges, set up new units in the Dutch financial capital to avoid European Union customers being disrupted by whatever form Britain's departure from the bloc takes.

Clearing of its euro repo trades at London Stock Exchange's LCH unit in London had already moved to LCH's Paris arm in order to be inside the EU after Brexit.

Migration of trading and clearing is a blow to London as a global financial center, with more business to follow the Chicago-headquartered exchange.

While Brexit is due to take place on March 29, it now looks increasingly likely that it will be delayed.

Cboe Europe, the largest pan-European share trading platform, plans to move euro-denominated share trading from London to a new unit in Amsterdam, with trading starting on April 1.

But Cboe Europe said last week it was "closely monitoring" political discussions and would react as quickly as possible to any developments that would alter this launch date.

Britain's government is scrambling to get support in parliament for a Brexit deal ahead of an EU summit on Thursday.

Separately on Monday, EuroCCP, a clearing house for stock trades, said it had obtained regulatory approval to clear trades for the new EU entities of Cboe Europe, Aquis Exchange, and London Stock Exchange's Turquoise from April 1.
 

 An EU flag flutters during an anti-Brexit demonstration outside the Houses of Parliament in London, Britain January 28, 2019. REUTERS/Hannah McKay

EuroCCP said it had also "on-boarded" six new EU-based entities acting as clearing members, and more than 10 new EU-based trading members.

EuroCCP, which clears over 30 percent of European share trades, is incorporated in the Netherlands and owned by Dutch Bank ABN Amro, Cboe Europe, Euronext, Nasdaq, and the U.S. Depository Trust & Clearing Corp (DTCC).

The announcement means that a large chunk of clearing in euro-denominated share trades, currently handled by EuroCCP and rivals like LCH in London, is also set to move to Amsterdam.

Clearing refers to a third party that ensures completion of a trade even if one side goes bust.

EuroCCP said it would activate the new clearing arrangements in EU-listed securities as soon as the new EU-based venues are ready

"While the uncertainty continues and despite the increasing likelihood that there may be a delay to Brexit, we are still focused on our preparations in case the UK leaves the EU on 29 March,” said EuroCCP Chief Executive Cécile Nagel.

Aquis is opening a new hub in Paris for trading euro-denominated shares, while the Turquoise unit is in Amsterdam.

(Reporting by Huw Jones; Editing by Louise Heavens/Mark Heinrich)

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