Goldman Sachs plans EU trading venue in Paris as Brexit nerves grow
Banking giant Goldman Sachs is set to launch a European stock-trading destination in an effort to make sure transactions in EU equities can continue smoothly even if there is no post-Brexit agreement.
Goldman said today that it has asked regulators for permission to launch Sigma X Europe, a platform to be based in Paris. It said it intends to launch before 4 January 2021.
It comes as the City grows increasingly anxious about the lack of agreement between the UK and EU on how financial services will work after the Brexit transition period ends in December.
The EU looks unlikely to grant the UK “equivalence” in a number of areas. Without this technical ruling, many EU investors will not be able to do business in London as usual.
In an effort to create as little disruption as possible, firms are moving staff and assets to the bloc. The European Central Bank (ECB) last week encouraged companies to speed up their transition plans.
Goldman: UK to lose most of EU trading volumes
“It’s critically important for us to have the capabilities in place for all our clients,” said Elizabeth Martin, global head of futures and equities electronic trading at Goldman Sachs in an interview with Bloomberg, which first reported the news.
Martin said Goldman believes there “will be a changing of the liquidity landscape in Europe and the UK post-Brexit”. She said she thinks the UK will lose most of its trading volumes in EU stocks.
Sigma X Europe will be a private multilateral trading facility. Subject to approval, it plans to allow trading across 15 markets and will accept all firms regulated by the EU’s market rules.
Goldman already has Sigma X, a trading facility launched in the UK in 2011. It is the second biggest “periodic auction” in Europe, and will continue to list UK and EU stocks.
The move by Goldman follows similar steps by Cboe Europe and London Stock Exchange (LSE) to beef up trading venues in the EU.
LSE said in October that it would shift trading in EU shares to a new Dutch hub if the UK loses key market access.