The Lemon Fool

Hi all

Wondering if anyone knows what may happen to our ability to trade foreign stocks after Brexit? Once we leave the EU we also leave the 750 other treaties including those that provide rights to hold foreign stocks, for example we have a treaty with the US to hold their stocks however we have no such treaty with India hence its not really possible to hold those stocks from UK brokers.

I tweeted IG, who got back to me privately to say:
'As far as we are aware at this stage, all foreign shares held in an IG account will still be tradeable, regarding of the negotiations outcome. If anything drastic were to change, you would be notified in advance.'

Not amazingly comfortable with that response, has anyone had any better clarity or understands the mechanics of how this works to better prepare?

thanks

I can tomorrow simply go and buy financial instruments from countries 'we do not have treaties with', from Japan to Argentina and scores of points in between. Same as you could if you set up the account/s. I don't imagine that the EU will volunteer to surrender easy liquidity by opting to cut themselves off from the biggest financial market in Europe.

'But what do I know, I'm just a retired international banker'

Thanks DiamondEcho

I assume this is without a uk broker going directly to those countries to setup accounts,
Any thoughts about UK brokers losing access not just to EU markets but the US also for example,

Cheers

I thought I'd seen a thread started on this board about this a few days ago but it seems to have disappeared.



In the event of a nodeal brexit there would be no financial equivalence regime and hence the UK would be in a worse position than Switzerland which the EU provided with a one year renewable equivalency regime

https://www.ft.com/content/574ce2e6-c49d-11e8-bc21-54264d1c4647


The Brexit effect: Brussels tries to blunt the Swiss model
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By extending EU market access for Swiss equity traders — but pointedly limiting it to just a year— the commission was able to manufacture the sort of leverage that would be taken seriously in Bern. One finance executive in Zurich warns that a blow-up with Brussels over share trading would “rip the heart out of the Swiss financial system”.


https://www.ft.com/content/fb5e8ec8-e660-11e7-97e2-916d4fbac0da


Switzerland accuses EU of bias in finance dispute
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The equivalence arrangement will allow stock exchanges in Zurich and Bern to continue trading shares in EU companies for another year from January 4. An agreement recognising the status of Switzerland’s bourses was needed ahead of the introduction of new EU financial rules, known as Mifid II, that come into force next month. The Swiss arrangement is weaker than that Brussels has with Australia, Hong Kong and the US, whose stock exchanges enjoy unlimited access to EU markets.


Hence in the event of a nodeal it would look likely that UK brokers would not be able to trade in EU companies on EU stock exchanges post brexit unless they had setup subsiduaries in the EU. Does anyone know whether the most popular UK brokers have taken such steps ?

All of the European governments are extremely reliant on the City of London when it comes to selling their debt instruments to finance their budgets. Whilst I don't "know" what the legal situation is with respect to treaties etc., in a world of reciprocity, and the very big implications for them should they not be able to issue such debt, I would imagine a "work around" solution would be found very swiftly.

Avalaugh wrote:Thanks DiamondEcho
I assume this is without a uk broker going directly to those countries to setup accounts,
Any thoughts about UK brokers losing access not just to EU markets but the US also for example, Cheers

A pleasure. My a/c is with Interactive Brokers, a US HQd but a global discount broker. I've maintained my a/c with them for c15 years whilst resident across Europe, S-E Asia, the Middle East, and now back home to the UK. ('this diplomatic lifestyle' - sigh).
I know it's US HQd, but I log-on and it might as well be a UK broker, as it does everything I could want (and more) vs UK markets, then offers the vast international range of markets too.
All of this is offered from my one single account.
I haven't heard talk of UK brokers losing access to EU/US etc. Sounds like scare-mongering not least as presumably it would be reciprocal ie to others' detriment.