PARIS/LONDON (Reuters) - Societe Generale SOGN.PA is opening a Paris hub this month to clear derivatives in the European Union in the latest sign of euro business moving from Britain to the bloc ahead of Brexit.
Customers were asking for their trades at the bank to be cleared in the EU, a SocGen spokeswoman said. LCH SA will be used for clearing credit default swaps, and Eurex will clear interest rate swaps (IRS), she said.
The French bank currently uses clearing houses in London, and also has clearing services in New York and Hong Kong.
The bank did not specify how many people it would be hiring to staff this new offer, nor whether it would be relocating employees from London to Paris.
Clearing in euro-denominated transactions has become a political battleground since Britain voted to leave the EU.
It unclear what sort of trading relationship Britain will have with the EU after March, though Brussels has said it would allow EU market participants to continue using clearers in London if Britain crashed out of the bloc without an agreed exit deal.
“Societe Generale works with clients daily on listed derivatives and OTC (over-the-counter) clearing by adapting its offering to their changing needs within the current uncertain regulatory environment,” said Christophe Lattuada, Global Head of Prime Services.
LCH’s London arm clears over 90 percent of euro-denominated IRS, and policymakers in the bloc want chunks of this moved to the continent after Brexit.
French central bank governor Francois Villeroy de Galhau said last month the clearing of euro denominated repurchase agreements was already moving from London to Paris.
“More generally, we would like to see the development in Paris of an enhanced and extended clearing services offering in the area of interest rate derivatives,” Villeroy said.
LCH in Paris has no licence to clear interest rate derivatives, meaning SocGen will have to use Eurex in Frankfurt for these contracts.
SocGen has said it would relocate or hire as many as 300 staff in continental Europe, mainly in Paris, because of the Brexit.
Reporting by Inti Landauro in Paris; Additional reporting by Huw Jones in London; Editing by Sudip Kar-Gupta and Mark Potter
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