CBOE GM and CME Group leave the island. Amsterdam is becoming the new financial center of Europe

Because of Brexit, financial companies do not have much choice but to leave Britain. This also applies to FX trading centers and equities that are beginning to move their trading infrastructure to the continent.

CME Group Inc. will shift its FX, forwards and swaps centers through an average of $ 15 billion a day from London to Amsterdam. At the same time, CBOE Global Markets Inc. will replace most of the stock trading in the Danish capital after Brexit.

This move follows CME's decision last year to move its short-term finance market to $ 227 billion a day in Amsterdam. The shifting of the shopping centers to the continent is part of a trade-off equalization procedure that requires trades to be traded on an approved European market and CBOE goes to the Danish capital to maintain their liquidity.

"We rather divide rather than duplicate stock trading to avoid liquidity fragmentation that may disrupt the normal market rhythm." - says David Howson, senior market analyst at CBOE Europe.

Companies that trade European stocks on the CBOE market - the busiest on the continent - will have to contact the Amsterdam office. CBOE shares are worth about $ 8 billion each day. Businesses in London will continue to process UK and Swiss equities worth 3 billion euros a day. Revenue from transaction fees, which so far goes to the UK treasury, will go to the authorities in Amsterdam.

CBOE will test its new, enlarged market in February and March, with the majority of customers ready to trade from the new location.

The FX division of CME-EBS will remain in London, handling deals worth $ 76 billion a day. FOREX forwards and swaps allow companies to protect themselves from future serious changes in currency values. Developments alongside Brexit will most likely increase the pound rate against the euro this year, with CME expecting the market for these derivatives to grow.

CME and CBOE are still awaiting approval by the regulator and the Danish authorities for the financial markets.

Source: Bloomberg Finance L.P.

Graphs: Used with permission of Bloomberg Finance L.P.

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