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MNI BRIEF: EU To Require Local Accounts For Derivatives

(MNI) Brussels

The European Commission today announced new steps to reduce reliance on London-based and other non-EU clearing houses, proposing measures to oblige participants in EU financial markets to hold a minimum proportion of their derivative exposures in an active EU account.

The proposals, which will now be submitted to member states for approval in the Council of Ministers, are designed to encourage EU clearers to increase their offer of services and for external clearers to relocate operations to the bloc, a senior EU official said, adding that the move would contribute to boosting “strategic autonomy”.

Market participants would be obliged to open an active account in the EU as soon as the legislation comes into force while Market regulator ESMA would have 12 months to decide where the minimum would be set.

The official said that the new proposals made it less likely that the EU would extend its equivalence ruling for UK clearers, although he noted that that decision would be for the next Commission to take in 2025. (See MNI: EU Looks At Collateral, Holds Course On Clearing-Sources)

While the proposals do not provide for punitive measures for participants who fail to move enough of their clearing exposures to the EU, they do make clear that banks which do fail to do so could face higher capital requirements.
MNI Brussels Bureau | david.thomas.ext@marketnews.com
Policy NewsCentral Bank NewsHomepageStoryCEEMEAEurozoneBriefEuropean Central BankRegion
MNI Brussels Bureau | david.thomas.ext@marketnews.com
Policy NewsCentral Bank NewsHomepageStoryCEEMEAEurozoneBriefEuropean Central BankRegion

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