London Stock Exchange transfers bond trading to Milan ahead of Brexit

20 Nov 2018

tradingOn Monday, the London Stock Exchange announced that it will be shifting its European government bond trading from London to Milan ahead of Britain’s exit from the European Union.

Reuters reports that the LSE’s electronic government bond trading platform, otherwise known as MTS Cash, trades an average of €13.4 billion per day. Around 20% of this figure will be moved to Milan, while trading in British government bonds will remain in London.

Seeing as Britain will not be an EU member state from March, the EU and European Central Bank want to move it to the euro zone to be able to regulate it directly. This move, which was first reported by the Financial Times, would also make room for cross-border trading to resume, should Britain leave the political block without a deal.

MTS Cash fell under the ownership of the London Stock Exchange group when it had purchased Borsa Italiana, being Italy’s only stock exchange, in 2007.

According to a close source, the move is said to take place from March 1, 2019. The same source also said MTS chief executive Fabrizio Testa informed clients that this shift and Brexit’s aftermath would not impact the way in which the markets work.

A second source said debt management offices of the countries whose bonds are affected by the move were deliberating new regulations.