Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Banks warn EU of disruption in derivatives markets in January

Published 12/10/2020, 02:52 AM
Updated 12/10/2020, 02:55 AM
© Reuters. FILE PHOTO: EU flags flutter in front of the European Commission headquarters in Brussels

© Reuters. FILE PHOTO: EU flags flutter in front of the European Commission headquarters in Brussels

By Huw Jones

LONDON (Reuters) - Financial markets will be disrupted in January unless the European Union allows the bloc's investors to use derivatives trading platforms in London, a group of seven financial industry bodies have said.

Britain has left the EU and transition arrangements giving continued full access end on Dec. 31.

Brussels has so far not granted "equivalence" or permission for platforms in London, the world's major centre for derivatives trading, to continue serving banks and companies in the bloc from January 1.

The industry bodies told the EU's financial services chief Mairead McGuinness in a letter dated Dec. 9 that without access, EU financial services firms would end up having to use platforms in the United States, which already have EU permission.

"In the absence of action from policymakers, there will be disruption in the market as of 1 January, as not all clients across the industry will be ready to put in place alternative solutions on that date, despite best efforts," their letter said.

Market participants in the EU "at best" face reduce choice on where to trade, and avoidable extra costs and operational complexity, the letter said.

"Together, these factors may lead to lower returns for investors," it added.

The letter was signed by the International Swaps and Derivatives Association, Electronic Debt Markets Association, European Venues and Intermediaries' Association, AIMA, FIA, Association for Financial Markets in Europe, and the Securities Industry and Financial Markets Association.

© Reuters. FILE PHOTO: EU flags flutter in front of the European Commission headquarters in Brussels

McGuinness warned the City of London earlier this week to expect only limited access to the EU at best given Britain has decided to leave the single market.

Latest comments

The EU should be dissolved its a joke
See? The EU needs the UK far more than we need them. I see a line of countries busting to do trade deals with the UK. How many can be bothered to endure the tortuous years of bullying, delaying tactics and other dirty tricks employed by the EU? Er, none that I know of
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.