| LONDON, Sept 28
LONDON, Sept 28 The European Union's markets
watchdog wants to charge foreign clearing houses seeking to cash
in on new derivatives rules being introduced across the
28-country bloc, an EU document showed on Saturday.
The move is a sign of how hard-pressed regulators are
struggling to implement on time a welter of reforms called for
by world leaders during the financial crisis.
One set of new rules being phased in aims to make
derivatives like credit default swaps and interest rate swaps
safer after taxpayers were forced to bail out banks in 2008 that
held large amounts of them.
But the Paris-based European Securities and Markets
Authority (ESMA), has asked the European Parliament in a letter
seen by Reuters if it could levy an undisclosed fee on clearing
houses, also known as central counterparties or CCPs, from
outside the EU.
Clearers ensure that derivatives and other financial
transactions are completed, even if one side of a deal goes
bust, and are core to making the opaque $630 trillion swaps
market more transparent and safer.
Regulators are forcing banks and others to channel swaps
transactions through clearing houses, raising the prospect of a
big new revenue stream.
ESMA Chairman Steven Maijoor said in the letter dated Sept.
24 that the watchdog will have to vet each foreign clearing
house that wants to operate in the EU.
But this task will be "much more burdensome than originally
expected" and with "significant budget implications", the letter
It had anticipated seven foreign clearers to request
authorisation during this year and next but the watchdog has
already received applications from 34 non-EU clearing houses,
none of which was named in the letter.
Europe's top EU-based clearers include LCH.Clearnet
and Eurex Clearing but are set to face competition
from foreign rivals seeking to benefit from the new clearing
requirements now being phased in.
Maijoor said this will involve a "significant amount of
work", about 45 days per application, or about 7 extra officers.
"European taxpayers should not pay for allowing third
country CCPs to freely offer their services within the EU,"
"Fees dis-incentivise unsubstantiated applications, that is
incomplete, inaccurate and spurious applications."
European clearing houses are generally subject to fees when
they apply for authorisation abroad, Maijoor added.