FIN. TeamESMA has published a statement on the revised scope of the EU’s share trading obligation (STO) under a no-deal scenario, following their initial announcement on 19 March 2019.
ESMA stated that although its prior statement on the issue significantly reduced the scope of the STO on a no-deal Brexit; its new statement is intended to further mitigate potential adverse effects of the application of the STO and to reflect concerns raised by some stakeholders about its earlier guidance.
In response, the FCA has published a statement in which it says that although it is encouraged by ESMA’s revised approach, it believes that applying the EU STO to all shares issued by firms incorporated in the EU would still cause market disruption, leading to fragmentation and reduced liquidity in both the EU and UK.
The FCA will continue to consider its approach to the implementation of any STO that is needed in a hard exit.
