EU Won’t Pull U.K. Market Access Amid Brexit, Lombard Odier Says
The European Union is unlikely to withdraw the U.K. stock market’s equivalence status as a Brexit “negotiating tool” after withdrawing market recognition from Switzerland earlier this month, according to Lombard Odier.
The U.K.’s equity market is almost twice the size of Switzerland’s and London’s clearing houses, which guarantee contracts even if one side proves insolvent, are a “core part” of Europe’s trading infrastructure, Stephane Monier, chief investment officer at Lombard Odier, wrote in a note.
“The U.K. is watching closely for any indication that the European Commission may try to use similar negotiating pressure over Brexit,” Monier said.
For now, Switzerland’s “retaliatory” measures appear to have defended the Swiss stock market, and had “little discernible impact on trading operations, in terms of both price execution and liquidity,” Monier said.
For more, Switzerland’s Stock Market Is Taken Hostage: Lionel Laurent
“The disagreement with Switzerland is required watching for anyone interested in what may lie ahead for the U.K. and the continent’s biggest trading market post Brexit.”
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