Amsterdam topples London as Europe’s share-trading hub

Amsterdam has displaced London as Europe’s biggest share trading centre after Britain left the European Union’s single market, and picked up a chunk of UK derivatives business along the way, according to data published on Thursday.

Stock exchanges in the Dutch capital traded 9.2 billion euros ($11.15 billion) a day in January, compared to London’s 8.6 billion, according to the Cboe exchange, which operates in both cities.

This compares with an average of 17.5 billion euros traded daily in London during 2020, when Frankfurt was second with 5.9 billion and Amsterdam sixth at 2.6 billion, Cboe said.

The City of London had long warned of the consequences of leaving

the EU single market without adequate provisions for trade in services, and notably finance, which accounted for more than 10 per cent of UK tax receipts before Brexit.

Exchange officials say the shift from London to Amsterdam is likely to be permanent since the EU has

shown no sign of reversing its position that euro-denominated shares must be traded in the EU — whose internal market Britain left on January 1.

The gap may narrow, however, as trading in Swiss shares resumed in Britain this month. It is averaging 250

million euros and is expected to build up towards over a billion euros a day - the level reached before trading of Swiss shares in London stopped in June 2019.

Separate data published on Thursday showed how chunks of trading in euro-denominated interest rate swaps have shifted from London, the world’s biggest swaps trading centre, to platforms in the EU and New York since January.

Platforms in Amsterdam, and to a much lesser extent Paris, accounted for a quarter of the euro rate swaps market in January, up from just 10 per cent last July, IHS Markit said. Over the same period, London’s share fell from just under 40% to just over 10%, with U.S. platforms doubling volumes to 20% of the total euro swaps market.

Paperwork done

As with shares, the swaps market has been fragmented by Brussels “obliging” Eu-based firms to trade interest rate swaps and credit default swaps either on a platform inside the bloc, or in a non-eu country whose platforms have been approved for use, such as the United States.