"Amsterdam after Brexit, the capital markets center of the European Union"

After the Brexit, Amsterdam becomes "the commercial center" of the European Union for capital markets. The Dutch Financial Markets Authority (AFM) is waiting for this on the basis of license applications from London companies wishing to open a new office in the EU in the Netherlands. "There is a silent upheaval in the European capital markets," said Merel van Vroonhoven, president of the AFM, at a press conference in Amsterdam.

The AFM has received more than twenty permit applications from London businesses. And there are big companies in between. This concerns, for example, stock exchanges and platforms for bond trading. This is how the Cboe Europe Stock Exchange goes to Amsterdam. CBOE, a little-known company, trades more shares than the more well-known stock exchanges in London, Paris and Frankfurt. It is the largest in Europe with a market share of 21%. A smaller purse, Turquoise, also applied for a permit.

The three largest European bond trading platforms have also opted for Amsterdam. TradeWeb, part of the ThomsonReuters group, is now active with a few people in the Zuidas. The commercial arm of the American financial giant Bloomberg is installed on the Stadhouderskade, the American company MarketAxess on the Herengracht.

In addition to trade shows and trading venues, Amsterdam also attracts companies that trade on their own behalf and at their own risk, such as the American company Jane Street, located in the World Trade Center. Companies that establish financial indices also visit the AFM.

See also: A broker chooses Amsterdam by Brexit

Additional capacity

The regulator takes into account the fact that 30 to 40% of the European capital market comes from the Netherlands, measured in number of transactions and in value of these transactions. Since much of the trade is digital, the number of jobs transferred from London to Amsterdam should be limited. This usually involves partial relocations. Van Vroonhoven believes that "several hundred" jobs are created in the Netherlands.

Even though the EU and the UK reach an agreement on new trade relations, companies will remain loyal to their arrival in the Netherlands, according to the AFM. In a "no deal" scenario, London City businesses will lose access to the EU market all of a sudden on March 29th. But even with a trade agreement, the financial "passport", with which companies can be active in the EU, will no longer apply in the UK, the regulator believes.

The AFM itself needs additional capacity via Brexit, Van Vroonhoven said. The transaction volumes supervised by the AFM become "substantially larger", for example more than three times larger for equities. Currently, the regulator temporarily halts trading in a stock or other financial product once a month in the event of suspicious price movements. The AFM hopes to do this 3 or 4 times a day, based on what is currently happening in London. "Brexit has a big impact on us," Van Vroonhoven said. She said that she was talking to the Ministry of Finance about additional funds. She did not want to say how much extra staff was needed.

Up to now, the big banks have chosen Frankfurt and Paris over Amsterdam as a location after Brexit. De Nederlandsche Bank, a licensing authority for banks and insurers, says through a spokesman that there are "several dozen" license applications from DNB. Some financial institutions also require an AFM license and a DNB license.