December 3, 2018 / 2:26 PM / 9 months ago

EU states back stronger oversight of foreign derivatives clearing

BRUSSELS, Dec 3 (Reuters) - European Union governments backed on Monday a proposal that could force systemic foreign clearing houses with operations in the EU to relocate to the bloc if they want to continue servicing their EU clients, a statement said. If, “as a measure of last resort and on the basis of a fully reasoned assessment,” the EU markets regulator ESMA decided that a foreign clearing house is of systemic importance for the bloc’s financial stability, it could force that firm “to establish itself in the EU in order to be able to operate,” the EU document said.

The measure, if adopted in more talks with EU lawmakers, could concern LCH, a unit of the London Stock Exchange, which dominates clearing of euro-denominated interest rate swaps and after Brexit will be outside the EU. (Reporting by Francesco Guarascio, Editing by Gabriela Baczynska)

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