Britain’s European Union exit to affect business climate
LONDON: Bats Global Markets, which runs the United States and European stock markets, warned in a filing that a withdrawal by Britain from the European Union, or ‘Brexit’, could damage the London business climate enough to drive some or all the company’s operations out of the UK.
UK Prime Minister David Cameron has pledged to hold a national referendum by the end of 2017 on whether Britain should remain in the EU. He’s seeking to renegotiate terms of membership before then and has hinted the vote may come as soon as the middle of this year.
“Should the United Kingdom vote to withdraw from the European Union, there may be an unfavourable business environment for companies with operations in the United Kingdom that do business in the European Union,” Bats, the parent company of European arm Bats Chi-X Europe, said in a January 29 filing.
“In such a case, BATS Chi-X Europe may move some or all of its operations to the European Union and the related costs and expenses could have a material adverse effect on our business,” Bats said.
Bats amended its US public offering filing to reflect the risk. It joins a list of businesses warning that a vote to leave the EU could drive jobs and investment out of the UK Hannah Randall, a spokeswoman for Bats, declined to comment.
Investment losses
The ‘Brexit’ debate has already cost the UK some foreign investment, according to senior corporate directors at BT Group and Barclays. The discussion began almost three years ago when Cameron pledged to hold a stayor-go referendum as a way to stop members of his Conservative party from defecting to the UK Independence Party, which pushes for separation from the bloc.
Britain leaving the European Union is the biggest threat the UK economy faces, according to some economists.
Polls suggest many British citizens feel the trade-offs no longer serve their interests and may prefer the idea of living outside the EU, which is the status of Norway and Switzerland. A large poll by former Conservative lawmaker Michael Ashcroft published in December found close to a third of the electorate had yet to make up their minds.
Lower burdens
The Leave.EU campaign, meanwhile, argued in January that the City has “everything to gain” because London already leads the way in some global financial markets and leaving the EU would reduce regulatory burdens. Mark Astaire, one of Barclays’s senior investment bankers, told British lawmakers on Jan. 6 that the capital would “continue to thrive” even if the UK was outside the EU.
The vital question is whether the UK will continue to have access to the single market, which doesn’t have a simple answer, Xavier Rolet, chief executive officer of London Stock Exchange, said in a March Bloomberg Television interview. Rolet is a member of Cameron’s advisory group.
“Without the UK, Europe would be in a very difficult situation,” Rolet said last month in an interview said.
Bats had 284 employees globally as of September, according to the SEC filing.