The Dutch capital Amsterdam attracts fintechs and trading houses in particular and is currently ahead of the pack when it comes to IPOs and the coveted SPACs. Global investors appreciate the comparatively lax regulation, which is more similar to that in the US than in the rest of Europe, and the widespread English.
The stock exchange, with its headquarters on Beursplein 5, now accounts for around a fifth of the daily share trading volume in Europe of 40 billion euros, as the latest data show. That is about twice as much as before Brexit. Amsterdam has also overtaken London in derivatives trading in euro securities. The Dutch are competing with Deutsche Börse, which also wants to have a part of the pie in this area.
Handelskultur in Amsterdam
“There is a whole trading culture in Amsterdam and being close to it is very positive for us,” says Robert Barnes, Managing Director of the London Stock Exchange (LSE) trading platform Turquoise, which after Brexit chose Amsterdam instead of Paris as its new headquarters . “You will find large institutional banks, specialized brokerage houses, a dynamic trading community and you are also in the heart of Europe.”
The city’s new heyday with its widely branched canals is reminiscent of the time 400 years ago when Amsterdam was the center for goods trading in Europe. The Amsterdam Stock Exchange was founded at the beginning of the 17th century. In 2000, it merged with the Brussels and Paris Stock Exchanges to form Euronext.
David Howson, head of the derivatives exchange Cboe Europe, sees clear advantages in Amsterdam. In the coming weeks, the European subsidiary of the US group, which has previously been based in London, will move its headquarters there. People in Amsterdam speak English more often than in cities like Paris or Frankfurt, he said. In addition, the regulatory requirements are not quite as strict as at the other financial locations. This also attracts many companies that are planning an IPO.
In Amsterdam, the Polish InPost succeeded in its largest European IPO this year with a volume of 2.8 billion euros. The French billionaire Bernard Arnault and the former Commerzbank boss Martin Blessing want to launch their SPACs there. In the course of the year, the Intercontinental Exchange (ICE) will also move its European headquarters from Great Britain to the Netherlands.
Less bonus for investment bankers
However, many new jobs in the financial sector are not being created in Amsterdam. According to studies, just around 1,000 new jobs have been added. That is only a fraction of the almost 10,000 jobs that have been relocated from the City of London to other cities in continental Europe since the Brexit vote. The reason for this is that it is mainly specialist retailers who choose Amsterdam.
Big investment banks like Morgan Stanley, JPMorgan or Citigroup chose Paris or Frankfurt as their new European location and are relocating entire departments with many employees, explains Michiel Bakhuizen from the Dutch Chamber of Commerce and Industry.
This in turn has a very trivial reason. “We have a law here that limits the bonus payments for bankers,” adds Bakhuizen. Since 2015, banks in the Netherlands have been allowed to pay out a maximum of 20 percent of the base salary as a bonus. In the case of the banks, this stirs up the tendency that many highly paid investment bankers would run away from them.