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General News: Goldman Sachs is launching a new trading platform as an insurance policy. Here’s why.

Goldman Sachs is being forced to open a new stock-trading hub in Paris, due to uncertainty surrounding Brexit and London’s future as a European center for the trading of equities.

The investment-banking giant announced on Tuesday that it would open the new hub before the end of the year, pending regulatory approval. The facility, Sigma X Europe, will be an additional offering to an original, U.K.-based platform called Sigma X.

The Paris facility will begin trading shares in companies across 15 European markets regulated under the European Union’s framework, while Sigma X in London will continue listing both U.K. and EU stocks.

“We want to ensure that our clients continue to have access to all of our key liquidity sources post-Brexit,” said Liz Martin, Goldman Sachs’s global co-head of futures and equities electronic trading.

So, why is Goldman Sachs — like others in the financial-exchanges business — opening new facilities in the EU?

When the U.K. completes its exit from the EU on Dec. 31, at the end of the Brexit transition period, it will lose access to the bloc and be automatically excluded from the regulatory framework that has facilitated pan-European stock trading in London.

The EU requires investment firms and traders based in the bloc to trade shares in EU-listed companies on EU-regulated exchanges.

If investors want to trade EU shares on a non-EU exchange, which the London Stock Exchange and others will be in 2021, regulators from the bloc must consider the jurisdiction to have “equivalence” with EU regulations.

Regulators from the EU have yet to grant this to the U.K., meaning that, come 2021, the U.K. will lose the rights to host EU investors trading shares in most EU companies.

In the U.K., the financial regulator has said it would allow British investors to continue using exchanges in the EU after the end of the transition period.

Goldman Sachs GS, -0.40% follows the London Stock Exchange LSE, +1.44%, Cboe Europe CBOE, -0.22% and Aquis Exchange AQX, in opening new hubs in Paris to ensure access to the stock markets regulated by the EU.

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