Minister claims Romania has “first chance” for London Stock Exchange relocation

Romania’s Government has been negotiating for over six months the possible relocation of London Stock Exchange to Bucharest after Brexit, said Ilan Laufer, the minister for business environment and entrepreneurship in a talk show at Antena 3 news station, on Tuesday evening, December 19.

There is no public information, however, that the London Stock Exchange, one of the biggest stock market operators in the world and the biggest in Europe, is even considering relocating from London, where it has functioned from 1801. British and international companies with a total capitalization of over USD 3.5 trillion are trading on the London Stock Exchange, which is the centerpiece of Europe’s main financial center.

The Antena 3 show’s host said he knew from trustworthy sources that the Government and minister Laufer himself were negotiating the relocation of London Stock Exchange to Bucharest. He asked Laufer if he could confirm the information.

“It’s a confidential matter. What I can say is that there are talks at this moment and that Romania’s Government, through the Business Environment Ministry has been carrying out these talks for quite a while. We started the negotiations with them about 6-8 months ago and I can confirm this evening that Romania has reached the grand final,” Laufer said.

“We don’t have an official information yet. An announcement will be made at the beginning of 2018. Until we have an official confirmation, I can only say we have the first chance,” the minister added.

The only talks related to Brexit have been related to EU control or possible relocation of clearing houses operating in London, including the London Stock Exchange’s LCH. A clearing house stands between two parties in a deal, protecting the rest of the market if a trader defaults on payment. France and Germany have been trying for years to end London’s domination over the clearing of transactions in euro. However, this does not mean that the London Stock Exchange is moving away from London, which would cause an unprecedented shift in the world of international finance.

Romania has one of the least developed capital markets in the European Union, a so-called frontier market, trying to get accepted into the emerging markets group. The Bucharest Stock Exchange has a market capitalization of some USD 41 billion and daily trades of some USD 12 million. Some of the biggest companies listed in Bucharest, such as state-controlled gas producer Romgaz, electricity distributor Electrica, and investment fund Fondul Proprietatea, are also listed on the London Stock Exchange.

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