The European Securities and Markets Authority (ESMA) said last month that if Britain leaves the bloc without a deal, asset managers and other investors based in the EU would have to trade over 6,200 shares, including 14 listed in London, on platforms inside the bloc.

"I would expect the FCA to bring in some form of share trading obligation which matches the ESMA's share trading obligation for a no-deal Brexit," Aquis Exchange Chief Executive Alasdair Haynes told Reuters.

A trading obligation from the FCA would mean that liquidity in many shares would be split if there is a no-deal Brexit, he said. The FCA had no immediate comment.

"I believe there is a turf war going on, which is politically motivated," Haynes said.

London is the biggest share trading centre for many European shares and the bloc is seeking to build up its own capital market now that Britain is leaving the bloc.

A tit-for-tat move by the FCA would mean that market participants authorised in Britain would have to trade thousands of shares from across Europe in London, and not on platforms based in the bloc.

Three leading pan-European share trading platforms based in London, Cboe Europe, London Stock Exchange's Turquoise, and Aquis have all opened new platforms in the EU for clients to avoid disruption from Brexit.

Trading in euro-denominated shares is expected to move from London to the new hubs to keep liquidity intact, which would mean a loss of business for Britain.

Turquoise and Cboe said last week that share trading at new Amsterdam hubs had not started because Britain did not leave the EU on March 29 as originally planned.

(Reporting by Huw Jones; Editing by Kirsten Donovan and Emelia Sithole-Matarise)

By Huw Jones