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Leave post-Brexit shift in euro clearing to markets, industry tells EU -Breaking


© Reuters. FILEPHOTO: An euro logo sculpture is seen in Frankfurt, Germany on October 26, 2014. REUTERS/Ralph Orlowski

Huw Jones

LONDON, (Reuters) – The relocation of euro clearing to London from the European Union should be market-led rather than mandated, according to Eurex Clearing’s head on Tuesday.

Following Brexit, EU Market Participants will be unable to Clear Euro Derivatives in London After June 2025. The EU cited a need for the EU to cut its dependence on the London market, just as it is cutting Russian dependency.

Brussels plans to propose a law this year that will provide “incentives” for euro clearing. London Stock Exchange The dominant euro clearing broker, X, will be traded at Eurex in Frankfurt using an unlikely mix of voluntary and mandatory measures.

Erik Mueller, chief executive of Eurex Clearing said that market participants desire competition. Eurex currently accounts for 27 trillion euro ($28.83 trillion), a 20% market, in euro swaps contracts.

Mueller said, “The trend has been clear”, and added that there will be more volume.

We will continue to push for the market-led solution, which would result in the best possible outcome for all.

Julien Jardelot (Head of Europe, London Stock Exchange Group) stated that EU companies clear more money in other currencies than the euro. They need to continue to have access to London in order to prevent rising costs and risk.

Julia Kolbe, Head of Markets Policy at Deutsche Bank (ETR) The European Pension Funds Association stated that requiring EU-based pension funds to resolve their derivatives within the bloc, and expanding the list of cleared products, would increase liquidity. This is a crucial EU goal.

Kolbe said that it was necessary to allow EU liquidity providers to access clearing pools in other countries after June 2025.

Donna Rix is the general counsel Europe for Citadel Group. She stated that it was impossible to underestimate the value of having all currencies and clearing risk in one spot. Splitting clearing between two operators could lead to higher costs.

Bruce Savage (head of Europe’s derivatives industry organization FIA) stated that “we strongly advocate voluntary market-driven actions.”

($1 = 0.9367 euros)