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How should insurance, finance work if there is no wedding?



(Reuters) – The United Kingdom will leave the European Union on March 29, but so far, there is no termination agreement with the bloc to ensure an orderly departure.

London is Europe's largest financial center, with the EU as the largest export market, which means that markets, insurance, bank insurance and banking management across Europe will not remain in chaos.

But preparations are underway on both sides of the canal to avoid the worst effects of any lacking Brexit. [19659002] Temporary Solutions

The United Kingdom approves a law that allows branches of EU insurance companies and banks in the UK to continue to serve UK customers, giving them time to apply for permanent approval.

After the EU refused to return to cover UK banks doing business with European customers, EU states have begun to take unilateral action.

Germany, Italy, France, the Netherlands, Sweden, Luxembourg, Ireland and Norway are planning to have low UK finance companies to keep the company limited for a specified period after March, if there is no agreement, which will allow the new EU insurance and banking hubs to sit down.

British and EU regulatory authorities have agreed to exchange information and collaborate on non-refractive surveillance to avoid immediate disruption of cross-border derivative clearing, credit rating agencies, trade reporting and asset management.

Lloyds of Brussels

Lloyds of London insurance market has opened a subsidiary in Brussels to write European policies and avoid potential disruptions to EU customers.

Insurers like American International Group Inc. change blocks of policies from EU customers to new hubs in the EU to become Brexit-proof before March.

EU insurance guard EIOPA has estimated that there are 9 million customers across Europe who are still facing potential disruption of policies worth a collective 7.4 billion ($ 8.38 billion) if there is no Brexit, but say that it is not likely to threaten financial stability and calls for EU preparedness measures.

What are the banks?

Many international banks use London as their European base, but with the possibility of a tough Brexit in the short term and the likelihood of patchy EU access from the UK in the future, they move to open hubs in the block before March 29. [1

9659002] The banks, which trade stocks, bonds, repos and derivatives, move 800 billion ($ 1,036 billion) assets to make their new hubs in Frankfurt and Paris operational next month, according to consulting services EY. [19659002] The new hubs may continue to book some business centrally in London at the moment, provided they build up business and staffing within their new business in the next few years.

Derivatives on ICE [19659002] ICE Futures in London is one of the Eu rep's two major derivative exchanges – the other is Eurex in Frankfurt, Germany.

Unlike stocks and bond trading platforms, ICE has no plans to move trade to the continent. Instead, you get permission from individual EU states such as Germany and the Netherlands to allow customers to continue trading at ICE in London.

The banks are replacing some outstanding derivative contracts for EU customers from London to new hubs in the block. 19659002] Delegation wins a repression

UK asset managers feared that a non-business Brexit would prevent them from managing funds listed in Luxembourg, Dublin and elsewhere in Europe, a cross-border activity called delegation

. But UK and EU regulators agreed on a pact this month to share information in the event of a lack of Brexit to allow the delegation to continue and trigger a major slack in the sector.

Stocks going Dutch

London-based CBOE Europe, the largest pan-European stock exchange, opens a new hub in Amsterdam where its trading of euro-converted shares will go from early April, regardless of w Hat variety of Brexit agree.

The pan-European turquoise platform of the London Stock Exchange also opens a hub in Amsterdam at the end of March and can move trade in euro-converted shares there.

Aquis opens a new hub in Paris to which it will move its euro-denominated stock trading. Changing trade can be followed by a similar relocation in some clearing to EuroCCP in the Netherlands.

However, cutting off the UK would interfere with the operation of EU rules that ensure transparency of stock trading.

Euroband and repos return to their roots

CME-owned BrokerTec, a trading platform for repurchase and repurchase (repo), moved its 210 billion euros per denominated trade to a new Amsterdam hub on the 18th March to avoid fragmented liquidity, even though there is a Brexit deal.

Likewise, MTS will shift Italian bond trading from London to Italy.

Spot support but forward flying

Spotexport is set to stay in London even if there is no wedding.

But the CME unit EBS moves currency exchange and exchanges from London to Amsterdam by March 18, even though there is a Brexit deal.

Likewise, Refinitiv transfers its currency derivatives of $ 300 billion a day deals to Dublin from London, while leaving its $ 100 billion per day spot trading in London.

Fine fettle metals for now

London Metal Exchange has applied for German and Dutch regulators for exemption from the requirement to be licensed as a foreign trading venue so that customers in these two countries can continue to use the British-based platform for trading copper, aluminum and other metals.

No such license is required in France, Cyprus, Ireland or Norway.

The EU has said that if there is no business, customers in the block could continue to clean their metal trading on LME for up to one year.

What happened to the Euro Declaration? ]

London dominates the settlement of derivative instruments in euro, but it would be impossible to transfer trillion euros of contracts to the continent in March to avoid disturbances from a lack of mining that could threaten financial stability.

Brussels has acknowledged saying that in the event of a tough Brexit, it would allow EU customers to continue to use UK-based clearing houses like LCH until the end of 2020 to provide more time for switching positions and for rivals as Eurex in Frankfurt to build

EU securities regulators and the Bank of England have also agreed on a co-operation pact for the monitoring of cross-border clearing operations.


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