This Wednesday the Financial Conduct Authority issued guidelines concerned with share trading obligation (STO). The guidelines will allow British companies to address EU exchanges for the trading of shares after the Brexit transition period comes to an end.
Only “mutual equivalence”, as said by the FCA, will allow UK businesses to abide by the share trading obligations. Plan B brought about by the FCA, is the usage of the Temporary Transitional Power (TTP) which will allow for firms to continue shares trading in the EU trading venues.
All this allows UK investors to access the EU trading venue after the Brexit transition period. However, both the FCA and the EU will have to come up with regulatory guidelines.
The guidelines will ensure that UK companies will be free to execute trades where they see fit.
“At the end of the transition period, the UK’s and EU’s regimes will be the most equivalent in the world, but as it stands this has not been recognized by the EU…“We have taken this approach to ensure UK-based investors and asset managers continue to have the freedom to find the best possible trading terms and to get the best outcome for themselves and their customers.” the FCA released.