UBS Venue Sees EU Stock Trade in London Cut in Half After Brexit
UBS Venue Sees EU Stock Trade in London Cut in Half After Brexit
(Bloomberg) -- UBS Group AG’s London platform has seen nearly 50% of its European equities business move to rivals in Amsterdam and Paris after Brexit diverted most EU share trading back to the bloc.
The Swiss bank, which decided not to open a venue for these trades within the European Union, dropped to 307 million euros ($373 million) in daily share trading last week on its UBS MTF venue, according to data from Cboe Global Markets Inc.
UBS MTF had a 1.6% share of European stock trading during the first week of December, which fell to about 0.8% as of Jan. 8, Cboe data showed.
While the loss of business is only a small part of the bank’s overall equities franchise, it highlights Britain’s reduced role for dealing in European stocks. The heads of Cboe Europe and Aquis Exchange Plc have said in recent weeks this shift out of London is permanent.
The U.K. lost its rights to access the single market on Dec. 31 and the EU has not permitted investors inside the bloc to trade shares in companies such as Airbus SE and BNP Paribas SA from the U.K. However, British and international investors can still trade EU shares from London, leaving some residual business in the city.
UBS was one of the only major platforms to not establish an EU venue as a Brexit hedge. Goldman Sachs Group Inc. launched an entity in Paris, while Cboe Europe and London Stock Exchange Group Plc opted for Amsterdam.
The Swiss bank may get a boost in the coming months after the U.K. Treasury granted equivalence to Switzerland, paving the way for shares in companies such as Nestle SA to be reintroduced to London platforms. These stocks are banned from European venues due to a spat between Bern and the EU.
A UBS spokeswoman declined to comment.
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