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Top trading hubs in Europe this year

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By Una Polastri

London and Amsterdam

At the start of 2021, Amsterdam was Europe’s largest share trading hub. While the position was previously occupied by London for quite some time, it seems that the start of the year brought about change and dislodged London from its historic position. Confidence has long been high that Amsterdam would most likely benefit from Brexit, which was realized at the top of the year. Since as far back as 2017, multiple stocks and bond trading venues that had previously chosen London as their EU base were said to be moving away and turning to the Netherlands. In fact, the Dutch financial markets regulator went as far as upgrading its surveillance system; this was in anticipation of the much talked about influx of business that would result from the impact of Brexit. Therefore, the movement in the ranking of the trading hubs did not come as much of a surprise, but it has put both London and Amsterdam under the spotlight.

However, the positioning was short-lived as London reclaimed the spot in June. According to reports, this was mostly attributed to the gain in volumes from Swiss equity trading. Moreover, an average €8.92 billion of shares were traded on London venues during that month, which was only slightly more than the €8.8 billion recorded from trade on the Dutch venues. Although London’s performance improved, it failed to meet its previous standards as the June trades were said to only be a fraction of the levels it recorded before the impact of Brexit.

Not long thereafter, however, Amsterdam shot to the top yet again, reclaiming the position from London and becoming Europe’s top trading hub. In July, Amsterdam ousted London, which has fast become known as its main rival. It is quite clear that 2021 has been a continuous back-and-forth between Amsterdam and London to occupy the top spot; however, that should not deter people from investing in the UK and FTSE 100 companies. The consist changes in trading volumes between the two cities does not necessarily have a material impact on the bottom line for brokers and trading platforms. It is worth noting that key industry players, such as the London Stock Exchange Group and Cboe, operate in both London and the EU, therefore, they are able to profit and capitalise on market activity irrespective of the location of the top trading hub.

The impact of Brexit

As already alluded to, the impact of Brexit on London’s trading activity cannot be denied. With Brexit having been a heavily debated and contentious matter from the get-go, it has subsequently been described as a disruptive experience that impacted and threatened business decision-making a lot. February 2021 reports on the matter highlighted that the new Brexit rules led to EU-based banks wanting to buy European shares not being able to trade via London, which further exacerbated the decline. Amid all the activity and uproar, the UK government has continuously reaffirmed its commitment to re-establishing London as a global trading hub that welcomes and attracts international investors. Despite certain drawbacks and the adverse impact of Brexit, some have reiterated that there is an upside to London distancing itself from the supposedly restrictive EU rules.

Amsterdam, Brexit, Business, European Shares, London, Netherlands, Stocks, Trading

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