The European Securities and Markets Authority said May 29 it will revise its share trading obligation, or STO, in case of a no-deal Brexit and will now only apply it to stock issued by companies incorporated in the European economic area, or EEA.
Only shares that carry an international securities identification number, or ISIN, beginning with a country code of an EU 27 member state — or ISINs from Iceland, Liechtenstein and Norway which are part of the wider European Economic Area — will fall under the STO's purview now. The EU 27 refers to the 27 countries that are part of the European Union.
The change means that ISINs with a U.K. country code will no longer fall under the scope of the EU 27 STO as was previously determined and EU banks and funds can continue trading the 14 key U.K. stocks that were included in the previous list, in London. Furthermore, ESMA no longer intends to publish a list of ISINs that will be subject to the STO.