LSEG outlines Brexit contingency plans

LSEG reports a strong first half of the year, with its plans for a Brexit ’no-deal’ already underway.

The London Stock Exchange Group (LEG) has laid out its plans for a ‘no-deal’ Brexit scenario within its half-year results.

As negotiations surrounding the UK’s departure from the European bloc continue, the exchange operator stated that it is currently executing contingency plans which includes establishing new EU entities and applying for authorisation to operate within the EU.

“The complexity and the lack of clarity of the application of a hard Brexit may decrease the effectiveness, or applicability of some of these contingency plans. As is the case with all change, these contingency plans introduce some change management risk,” the LSEG said.

The exchange added that it has also formed a Brexit programme, aimed at engaging with UK and EU Brexit policy leads to advise on the certain market infrastructure matters.   

Last month, LSEG told Reuters that it has already applied for several trading and trade reporting licenses in Amsterdam so that it can carry on serving clients based in the EU. The applications were for Turquoise, TRADEcho and UnaVista, according to Reuters.

“LSEG’s key objectives are maintaining London’s position as a global financial hub and providing continuity of stable financial infrastructure services.”

Revenues were up 12% year-on-year at the LSEG in the first six months of the year, from £853 million in 2017 to £953 million. The exchange reported double digit growth in its information services, LCH and capital markets segments, up 16%, 18% and 13% respectively compared to the first half of last year.

Chief executive at the LSEG, David Schwimmer, also explained that his focus after starting his new role in April is to meet with colleagues, clients, shareholders and stakeholders to ensure the exchange continues to focus on driver ‘operational excellence’ across the business.

David Warren, LSEG’s chief financial officer, added that the company has delivered strong results in the first six months of the year, with growth across all business units.

“LCH has launched new products and set new records for clearing levels in the SwapClear and ForexClear services, while FTSE Russell has produced another good result,” Warren said.

“Capital markets performed well with increases in primary and secondary markets activity. We are in a strong position as we work to execute on our strategy and to meet our financial targets while continuing to invest for further growth.”