Publications on Europe
City Guide to a UK Euro Changeover

Contents

The City Guide is intended for use by market practitioners in their preparations for possible UK entry to EMU. The Guide has been drawn up in consultation with market practitioners in the City Euro Group. It updates, to September 2005, guidance given in Practical Issues. The guide is in two sections.

	Section A focuses on the changeover in sterling wholesale financial markets, if the UK joins EMU. (58k)
	Section B considers the interdependencies between wholesale and retail markets during the transition period after UK entry. (148k)

The assumptions about a UK euro changeover on which the guide is based are set out in Chart 1. H M Treasury’s third outline National Changeover Plan, published in June 2003, gives an illustrative timetable for a UK euro changeover, in which: the period from a Government decision to join (D) to a Referendum (R) is at minimum 4 months; if there is a positive vote in a Referendum, the period between R and the beginning of the retail transition period (RT) is around 20 months; the period between RT and the introduction of euro cash (E) is around 10 months; and the period between E and the end of legal tender for sterling cash (S) is 2 months. The Government's preference is for E to be on 6 April of the relevant year.

Click chart to enlarge

Notes: D = Government decision to join; R = Referendum; T = UK entry: fixed conversion rate; sterling wholesale financial markets in euro; RT = full-scale retail payment and transaction processing infrastructure and services available; E = end of transition period; euro notes and coin introduced as legal tender in the UK; S = end of legal tender for sterling notes and coin.

City Guide as a single PDF document (9,760k)

Contents


A.1		Sterling wholesale financial markets (58k)

A.2		Financial instruments issued before, and outstanding at, entry (104k)
		(i) Nominal values
		(ii) Cash-flow payments
		(iii) Market conventions

A.3		New financial instruments issued after entry (86k)
		(i) Nominal values and cash payments
		(ii) Market conventions

A.4		Financial transactions undertaken before entry but settled afterwards (86k)

A.5		Financial transactions undertaken after entry (57k)

A.6		Responsibility for conversion (45k)

Box 1		Bank of England preparations: summary (99k)

Box 2		Business days and holidays after entry (104k)

B.1		Wholesale/retail interdependencies: technical issues (148k)

B.2		Gilts and equities (133k)
		(i) Gilt and equity transactions
		(ii) Gilt coupons and redemptions
		(iii) UK companies' dividends and share capital

Box 3		Banking services under a managed transition (88k)

B.3		Guidelines to help UK companies (100k)
		(i) Timing of share capital redenomination
		(ii) Declaration and denomination of dividends
		(iii) Methods of redenominating company share capital
		(iv) Share option schemes

B.4		Interest day-count conventions (57k)

Box 4		Interest day-count conventions (74k)

Box 5		Redenomination of sterling bonds and company share capital (60k)

Box 6		UK euro changeover: summary (109k)