On 26 October 2020, the European Securities and Markets Authority (ESMA) issued a statement clarifying the application of the EU’s share trading obligation (STO) following the end of the transition period.
The statement confirms that the trading of shares with a European Economic Area (EEA) ISIN on a UK trading venue will be in scope of the EU STO. ESMA has recognised an exception for shares traded in UK pound sterling (GBP) but this does not appear much of a concession given that there a limited numbers of these. This approach carries on the EEA-ISIN approach set out in ESMA’s earlier statement in May 2019.
Commenting on ESMA’s latest statement, Norton Rose Fulbright’s Global Head of Financial Services, Jonathan Herbst, remarked that “ESMA have essentially stuck to their previous position on EU ISINs,” by confirming the manner of STO application. He went on to add, “This statement essentially repeats ESMA’s position and effectively amounts to ESMA batting the ball back across the net to the UK.”
ESMA’s full statement can be viewed here.