UK Subsidiaries In The EU Will Bear The Front Of A No Deal Brexit

It seems that the whole UK government is scrambling to find a solution for Brexit, but no matter how one looks at it, it seems that coming up with a plan is always trumped with in-house bickerings, political opposition, or just plain impracticality. Therefore, in order to extend the period during which negotiations can continue, Theresa May is planning to travel to Paris, followed up by Berlin, to convince major EU leaders to give the UK more time, specifically, 2 more months until June 30th to come up with a plan.

Not much hope

The EU is extremely irritated by the whole Brexit issue at this point. It has interfered with trading, with currency exchange rates, and overall is a real pain in the back. No matter which Brexit happens, deal or no deal, everyone just wants it to get it over with. Therefore, May needs to come up with a miracle to convince everyone to give her more time.

However, the UK firms and institutions are not too confident in the Prime Minister’s chances of scoring an extra 2 months. The LSE (London Stock Exchange) has announced that it will direct all Euro-based trading to its Amsterdam subsidiary, Turquoise. The same goes for dozens of financial companies, among which are notable names such as Hargreaves Lansdown, Bank of Scotland, JPMorgan, Goldman Sachs and etc.

Companies to the rescue

Those companies and institutions are trying their best to minimize the losses for themselves, sure, but in the process, they are actually delivering some value to their UK and EU-based customers. Thanks to the London Stock Exchange’s motion to transfer  Euro-based trading to Amsterdam, both customers will be able to continue trading without much hassle.

In case of a no-deal Brexit, the LSE will start listing some EU shares on its platform for UK citizens to trade. All in all, the exchange is prepared for both cases of affairs.

Will the EU agree?

At this point, it is very hard to expect the EU to express its “goodwill” towards Brexit. Why? Because they’ve already done so. The extension of the deadline was already a testimony to the EU’s willingness to cooperate. But at this point, it's hard to see whether they will agree to a 2-month extension when a 2-week extension itself was done reluctantly. Overall, it is practical to believe that everybody is just tired of hearing about Brexit and seeing markets react to even a small headline containing the word. Everyone just wants it to be over. Therefore, it is most likely that the world will be seeing a no-deal Brexit this Friday.