Brexit Prompts London Trading Venue to Threaten Move to Ireland

  • LMAX plans Ireland filing unless U.K. can guarantee access
  • Market operator says it has customers in 22 EU countries

A currency-market operator has thrown down the Brexit gauntlet: Ensure market access to Europe or we’re moving to Ireland.

LMAX Exchange said Tuesday it will file with Irish regulators in January unless U.K. politicians take heed, joining the ranks of London-based firms looking to the island as a gateway to European Union access once the U.K. leaves the bloc.

LMAX follows Bats Global Markets Inc.’s European unit -- which operates from the U.K. and is the biggest pan-European stock exchange -- in saying it may open another office in the EU, potentially in Dublin, to make sure its business isn’t interrupted.

Executives are weighing their options amid concern that Prime Minister Theresa May will not favor the City of London in her Brexit plans, even though the U.K.’s financial-services sector accounts for almost 12 percent of economic output and 1.1 million jobs. If negotiations resulted in a so-called hard Brexit, companies from banks to stock market operators could be left without a sure a path to EU customers.

“Our European counterparts are opportunistically targeting the current U.K. capital markets franchise, and it is vital we proactively address the regulatory passport issue immediately,” said David Mercer, chief executive officer of LMAX Exchange, which has customers in 22 EU countries. “We urge the government to make this top of their agenda as they consider the time line to an exit from the single market and provide guidance to our industry as soon as is practicable.”

Convergex Ltd.’s U.K. brokerage has also said it’s looking at Dublin as a way to keep unfettered access to the EU. ICAP Plc CEO Michael Spencer said over the summer that Brexit won’t alter the structure of his company, although he may move some sales staff to other European cities if clients relocate their trading operations.

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