About David Howson
In February 2021, David Howson, then President of Cboe Europe, discussed the post-Brexit shift of share trading in EU-listed names from the UK to the Netherlands. He described the move as "unprecedented in its size" and occurring overnight on January 4, but stated it "wasn't unpredicted" and had been signaled during Brexit negotiations. Howson noted that Cboe had launched a Dutch venue in October 2019 to prepare for the transition, and he described the shift as "pretty much permanent," adding that it would take "a major catalyst" for the industry to move European share trading elsewhere.
Howson also addressed the lack of equivalence granted to the UK for share trading, saying he saw "no likelihood of an equivalence deal" and that "nothing really changed from the UK being equivalent on paper." He stated there was "no incentive" for the European Commission and ESMA to provide equivalence given the trading had moved to Europe. Responding to comments from former LSE boss Xavier Rolet, who characterized the loss of share trading as a "sideshow" compared to derivatives clearing, Howson argued that equity capital markets are "fundamental for democratizing wealth creation" and "at the heart of any financial services ecosystem," and should not be dismissed as a non-event.
Source: AI-verified profile updated from David Howson's recent appearances.
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Transcript (6 segments)
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Interviewer0:12
Is that how you're experiencing it at the Cboe?
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David Howson0:18
Good morning, yes. It is indeed what we've seen. The shift in share trading from the UK in the EU listed names from the UK to the Netherlands was certainly unprecedented in its size and in the fact that it all happened overnight on the 4th of January. But it wasn't unpredicted; it was certainly signaled through the Brexit negotiations, and the financial services industry saw that for share trading at least, no financial services deal would be in place. So what we've seen is that the planning that the industry and ourselves put in place has paid off. Stock exchange servicing 18 securities from 18 countries, it was really important that that financial stability, that continuation of service was really provided. And certainly we see that that shift is now pretty much permanent, and it would really take a major catalyst to induce the industry to look elsewhere to trade European shares.
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Interviewer1:37
The governor of the Bank of England has sort of been running his hands through his hair and asking the question: what is actually materially different from the rules that apply in Europe to the rules that apply in London at the moment? And he doesn't seem to understand why equivalence has not been granted. Do we assume then...
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David Howson2:12
The likelihood of an equivalence deal? As you say, overnight nothing really changed from the UK being equivalent and applying the MiFID rules for share trading through to January the 4th. So on paper there's no real difference. So you could ask the question theoretically why was his equivalence not granted? It hasn't been, and there's certainly no incentive for the European Commission and ESMA to look towards providing equivalence given that share trading has now moved, as we said, pretty much permanently to Europe.
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Interviewer2:51
David, interesting comments over the weekend from Xavier Rolet, the former LSE boss, effectively saying the loss of that...
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David Howson3:10
I'm not sure it's more relevant. It's all important. Equity capital markets are fundamental for democratizing wealth creation, for raising capital, and the heart of any financial services ecosystem. So although in notional terms on a daily basis they are dwarfed by the notional sizes of interest rate swaps and credit default swaps, which are subject to that derivatives trading obligation also, so in notional terms yes it's smaller, but it is fundamental and it is important to the financial ecosystem. So shouldn't just be waived as a non-event, and it's certainly something...
