The City of London is once more Europe’s largest hub for trading in European listed shares by value, narrowly edging a lead over Amsterdam. Amsterdam traded the largest volume of European listed shares on public exchanges in Europe in January, when EU rules against trading EU listed companies’ shares on foreign exchanges kicked in.
As Brexiteers have wearily come to expect, while certain media outlets trumpeted the bad news in January they’ve been noticeably reticent to cover this more positive development. As we noted at the time, the change in January was largely meaningless. The January figures didn’t include off exchange transactions such as dark pool or SI trades. Meanwhile, infrastructure, jobs and revenues remained largely unaffected.
Nonetheless, like the England team’s performance in the European Championships, it is a welcome piece of symbolism. Welcome, too, is the fact that one of the sources of the increase came from Swiss shares. As readers may recall, until the UK left the EU the City was barred from hosting Swiss shares in an attempt by Brussels to bully Switzerland into accepting a new, more onerous trade deal which would undermine its autonomy and labour market protections.
More broadly, London’s success illustrates a couple of broader points. Firstly, as the FT article linked above notes, it reflects the government’s ambitious plans to facilitate new forms of finance, which will strengthen the City’s offering in comparison to an over-regulated EU. London has successfully stolen a march in other areas – it was second only to San Francisco as a centre for new FinTech investment in 2020 – partly by benefiting from a more flexible and intelligent regulatory regime.
Secondly, it indicates that the European Commission’s attempts to throttle the City have largely failed. While Brussels has tried to use the offer of Equivalent status to prevent the UK from stealing a regulatory lead, UK regulators have realised not only that the EU will never deliver on its offer, but that the offer isn’t worth much anyway. The EU has once again demonstrated its unreliability and bad faith – as it has with its refusal to show the necessary flexibility for the Northern Irish Protocol to function. If the results in finance are anything to go by, the EU will fail here as well.