UBS warns of Brexit trading hiccups

Swiss bank UBS issued a warning on June 21 that it may have difficulty accommodating trading in the run-up to, and in the wake of, this week’s UK vote on European Union membership.

UBS has warned over heightened volatility before and after the UK referendum on June 23

UBS said in an emailed notification that while it’s difficult to predict market conditions just before the June 23 vote and immediately after results are expected the following day, “we may see an increase in volatility and an impact on trading volumes”. That could lead to a situation where prices become “non-tradable” for certain periods, the bank said.

Automated foreign exchange trades won’t execute while prices are non-tradable, UBS said. It added that in the event of “extreme market moves” UBS might not be able to fill so-called limit orders, which are placed to buy or sell at set prices, or to fill orders to close out positions once prices vary to specified degrees, in ways “expected in normally functioning markets.”

“UBS may adopt other approaches as it deems appropriate and feasible under the given circumstances,” the bank said. “Any determinations we make will be made in good faith and in a commercially reasonable manner.”

A UBS spokesman declined to comment.

The UK referendum on whether or not to leave the EU has already moved markets in equities, debt and currencies, based on shifting poll data. However, the most significant moves by investors are expected after the vote results are announced.

Write to John Letzing at

This story was first published by The Wall Street Journal

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