STORY CONTINUES BELOW THESE SALTWIRE VIDEOSLONDON - Leading users of derivatives markets in the European Union called on the bloc on Thursday to scrap a plan that would force them to shift euro derivatives clearing from London to the EU.
Its executive European Commission has proposed a draft law that would require banks and asset managers in the EU to have an active account with a clearer based in the bloc - in practice Deutsche Boerse's Eurex Clearing in Frankfurt - to shift business from LSEG to Eurex. "The proposed active account requirement would negatively impact EU capital markets by introducing fragmentation and loss of netting benefits, and make the EU less resilient to market stresses, with no benefit to EU financial stability," they said.
AAR would put EU firms at a competitive disadvantage compared to third-country firms, which would still be able to transact in global markets without restriction, the industry bodies said.