Thomson Reuters is planning to transfer its widely used foreign exchange derivatives trading from London to Dublin to be ready for the UK’s departure from the EU next year.
In a note sent to clients, the information and trading group said it had applied to the Central Bank of Ireland, the local regulator, for a licence. It will be used to cover Thomson Reuters’ derivatives business, the largest in Europe, which trades more than $300bn a day.
Thomson Reuters will keep its spot trading market, which trades about $100bn a day, in London because this is outside the scope of Mifid II, Europe’s main markets rules. The technology for matching deals, and processing and settling them will also remain in London. It has no plans to move any employees from London or elsewhere to Dublin but was hiring new staff to meet local laws, it added.
Thomson Reuters’ decision to keep technology and systems in London will not meet the guidance from the European Securities and Markets Authority last year that market infrastructure operators’ key activities should not be outsourced outside the EU. Those activities include daily operations such as running the system that matches trades, and operations related to market data feeds. However, the industry has been in discussions with regulators about keeping the technology network in the UK, because of the cost and difficulty of splitting it up. Many EU trading venues already house important technology operations in the US.
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