OCREUS Group

European regulators are racing to avoid London branches of EU banks having to route derivatives trades through New York, if Brussels fails to deem the City’s regulatory standards robust enough after Brexit. Officials are working on emergency tweaks to rules in the event the UK and the EU do not grant sufficient access rights to each other’s financial services markets, in a set of so-called equivalence decisions, before Britain leaves the bloc on December 31.

Officials are working on emergency tweaks to rules in the event the UK and the EU do not grant sufficient access rights to each other’s financial services markets, in a set of so-called equivalence decisions, before Britain leaves the bloc on December 31.

Derivatives trading is one of the biggest businesses in the City and the current rules capture deals in the EU market with a notional value of around €50tn. Swaps trading has emerged as a particular concern because of an EU rule, known as the “derivatives trading obligation”, that requires the most actively traded contracts to be traded on an EU trading venue, or one Brussels recognises as of an equivalent standard. London-based branches of EU banks may be caught in the crossfire, because it is unclear whether they would be bound by EU restrictions on trading in the City.

Last week, the UK Financial Conduct Authority said it remained open to discussing with Esma how to minimise any disruption created by overlapping requirements.

See full article here (subscription required)

WP to LinkedIn Auto Publish Powered By : XYZScripts.com