Brussels to extend equivalence for London clearing houses in the new year – POLITICO


Brussels will extend equivalence for UK clearing houses in the new year, EU Financial Services Commissioner Mairead McGuinness said on Wednesday following industry warnings of a possible market disruption.

The move will allow EU banks and investors to continue using London clearinghouses beyond June next year despite the European Commission’s goal of moving clearing from the euro to the continent after Brexit.

“I will be proposing an extension of the equivalency decision for UK CCPs early in 2022,” McGuinness said in a statement. declaration, without specifying the extension run time.

“The extension of equivalence should be long enough to allow us to revise the EU supervisory system for CCPs,” she added.

Clearing houses are the only remaining area of ​​UK financial services to benefit from post-Brexit equivalence due to fears of disruption in the economically critical area of ​​euro interest rate swaps.

The Commission has so far failed to bring clearing from the euro to the mainland – but McGuinness said it remains the goal.

The Irish commissioner said she will propose measures next year to make EU-based clearing houses “more attractive to market participants”, including by increasing liquidity and expanding offerings.

There should also be stricter supervision of clearing houses, “including a greater role for supervision at EU level,” said the EU’s chief financial officer.

“This proposed way forward strikes a balance between preserving short-term financial stability – which requires making an equivalency decision to avoid a cliff face for EU market players – and preserving financial stability in the medium term – which requires us to reduce this risk of excessive dependence on a third country, ”said McGuinness.

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