A week after the referendum sent us into Brexit, there remain more questions than answers on what will become of the UK and – more pertinently for us – the City of London’s trading community. No-one truly knows how this will play out. We may collectively remain in the dark for some time.
Many Remainers seem to be consoling themselves that nothing will happen for two years, which is how long the UK has to negotiate its exit once Article 50 is submitted to the powers that be. That may or may not be the case, but my big fear is that we are entering an extended period of stasis, as participants delay much-needed investment until the dust settles (whatever that means).
The FCA earlier this week told financial institutions to continue full speed ahead with their preparations for new regulatory requirements – most notably in our space MiFID II. That’s encouraging, and surely helpful should the City’s institutions find themselves seeking to enter the EU’s single market once we’ve Brexited.
Whether trading technology investment will continue apace remains to be seen. But I’ve been discouraged to hear that German regulator Bafin has ruled out the possibility of the merged LSE-Deutsche Boerse locating its headquarters outside of the single market. This statement came on the back of the news that clearing in euro-denominated transactions will move from London to other European centres once the UK leaves (and most probably before).
From where I’m sitting here on the Isle of Dogs (formerly known as Canary Wharf South), it all feels a bit gloomy. I’m sure the typically British weather doesn’t help. Let’s hope I’m wrong.