The benefits of recognized exchange status in the UK seem to be
less attractive to international exchanges than was intended when
the new regime was introduced. In May, Eurex US became only the
first overseas investment exchange to obtain recognized status
since the Financial Services Authority (FSA) was given the power to
grant that status four years ago.
At the time of writing, just 12 overseas exchanges, including
Eurex US, have been recognized in the UK. Seventeen other exchanges
have designated status, which provides certain advantages for
members but not the full benefits of recognized status.
Over 80 European Economic Area (EEA)-based regulated markets are
automatically exempted from the need to become recognized in the
UK. Many electronic exchanges based in the EEA that are not
regulated markets are also likely to be excluded from the
recognition regime. A further 200 markets are listed in the FSA's
Handbook for the purposes of transaction reporting and...