European Asset Managers Urge ESMA To Find Solution To Dual-listing Conundrum Amid Hard-Brexit Fears

If the UK leaves the European Union without a deal next month, fund managers based on the continent may no longer be able to buy and sell the London-listed shares of such companies, including Royal Dutch Shell, Unilever and Ryanair, according to The FT.

Despite being accessible through other stock exchanges within the EU, London is a more attractive option as it typically boasts a larger and more liquid market.

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Around 90 companies could be affected by the issue, the majority of which are listed in both London and Dublin, and several in Amsterdam.

According to reports, the Paris-based regulator has been under political pressure to avoid granting equal billing for London-listed shares in the event of a hard Brexit. ESMA has previously said it is "aware of this issue in relation to the trading obligation for shares and are currently looking into it".

The London Stock Exchange said EU investors would have to use local listings to trade such shares even if "liquidity is thin and the price is less favourable". 

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This complicates matters more as any restrictions on the ability of EU-based investors to access London listings could put them in breach of MiFiD II regulations, which require them to secure the best price for their transactions.

Stocks only listed in London will still be accessible to European fund managers in the case of a no-deal Brexit.