EU assessing divergence in London’s financial market access

© Reuters. FILE PHOTO: The sun rises behind the Canary Wharf financial district in London © Reuters. FILE PHOTO: The sun rises behind the Canary Wharf financial district in London

By Huw Jones

LONDON (Reuters) – Britain’s future access to the European Union financial market must take into account how far it will diverge from the bloc’s rules, a European Commission official said on Wednesday.

After leaving the EU in January, Britain retains full access to the bloc until the end of 2020 under a transition deal with its former partners, with both blaming each other for missing an end of June deadline for assessments on access from 2021.

Future access will depend on Brussels deciding that Britain’s financial rules are and likely to remain equivalent to or sufficiently aligned with those in the bloc.

“We need to have a forward-looking approach and have a good understanding of the intentions the UK has in terms of future financial regulation,” Andrea Beltramello told an online event organised by the Futures Industry Association, an industry body.

The London Stock Exchange’s London Clearing House clears more than 90% of euro-denominated interest rate swaps and said it needs certainty on EU access by September to avoid a “cliff-edge” that forces customers to move positions out of Britain by December, potentially undermining market stability.

Beltramello said Brussels would not wait until the last minute to make its intentions known, but that markets should prepare for all possible outcomes.

“We are very mindful of the situation and we will take the steps that are necessary to deal with financial stability risks,” Beltramello said.

Julien Jardelot, the LSE’s head of Europe government relations and regulator strategy, said he hopes the EU can give some form of legal clarity shortly.

“We are confident that both EU and UK regulators… understand the need to ensure a smooth transition,” Jardelot said.

The European Central Bank wants euro clearing moved from London to the euro zone, but Jardelot said there was “no discernible” movement to Eurex (DE:) in Frankfurt because clients don’t want market fragmentation.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Let’s block ads! (Why?)

Economy News

Leave a Reply

Your email address will not be published. Required fields are marked *