EU confirms plan to keep Irish shares trading under no-deal Brexit

Euroclear UK & Ireland could settle securities traded in Dublin until March 30th, 2021

It is expected that the Irish securities market will have migrated to Euroclear Bank in Belgium by March 30th, 2021. Photograph:  iStock

It is expected that the Irish securities market will have migrated to Euroclear Bank in Belgium by March 30th, 2021. Photograph: iStock

 

The European Securities and Markets Authority (ESMA) has rubberstamped a plan to facilitate the continued settlement of Irish shares traded for up to two years after a no-deal Brexit.

For the past two decades the settlement of trades has been carried out by a UK-based central securities depositary (CSD) called Crest, operated by Euroclear UK & Ireland in London. However, Crest stood to lose its automatic right to passport services into the Republic as the UK leaves the EU.

ESMA confirmed on Friday that Euroclear UK & Ireland in London could still settle securities traded in Dublin in the case of a no-Brexit up until March 30th, 2021, by which time it is expected that settlement of Irish shares will have migrated to Euroclear Bank in Brussels.

It had been clear for some months that ESMA was preparing this decision, as it had welcomed a European Commission decision in December that the legal framework for Euroclear UK & Ireland in the UK could also be used “for a limited period of time” to service the trading of Irish shares.

Similar decision

It follows a similar decision by ESMA to allow the London Stock Exchange’s LCH unit to continue trades for EU customers for a year under a no-deal Brexit scenario.

“Euroclear UK & Ireland’s recognition will apply from 30 March 2019 to 30 March 2021, by which time it is expected that the Irish securities market will have migrated to Euroclear Bank [in Belgium],” the company said.