LSE prepares Dutch share trading arm in case of Brexit stalemate

LONDON (Reuters) - The London Stock Exchange <LSE.L> said its pan-European share trading arm Turquoise will offer trading in EU-listed shares on its Dutch platform from the end of next month if there is no agreement on future direct access to the bloc by then.

Brussels is assessing whether to allow Britain's financial sector to serve EU investors under its "equivalence" system, which checks if UK market rules are as robust as those in the EU.

After Britain left the EU last January, direct access to the single market under transition arrangements ends on Dec. 31.

"Turquoise can confirm that it is planning on invoking its Brexit contingency plans on Monday 30 November 2020, unless relevant equivalence decisions to allow cross-border services between the EU and UK are agreed prior to this date," the UK exchange said in a statement. All shares would still be available for trading in London as well.

The LSE set up its Dutch hub as insurance against no direct access to EU investors.

CBOE, the biggest pan-European share trading platform, which is based in London, has also set up a hub in Amsterdam that is already open for business but with little trading so far, while London-based Aquis Exchange has set up its Brexit hub in Paris.

Without equivalence, EU investors would have to trade EU companies inside the bloc, even though many of them are heavily traded in London.

Banks have warned that fragmenting trading liquidity would make markets less efficient for users.

(Reporting by Huw Jones; Editing by Susan Fenton and Mark Potter)