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Global financial, investment fund and derivatives industry bodies have called on the European Union to extend permission for clearing houses in Britain to serve customers in the bloc to avoid a significant risk of market disruption.
Britain fully left the EU last December and the London Stock Exchange, whose LCH arm clears the bulk of swaps denominated in euros, has temporary permission to continue serving customers from the EU until June next year.
Brussels is considering how the activity could be shifted to the bloc where it could be directly supervised.
In a letter on Thursday to the EUโs financial services chief Mairead McGuinness, the industry associations call on her to provide certainty to the market by either extending the current temporary permission or granting open-ended permission.
If clearing permission is not extended from June 2022, the LSE would need to give EU customers three monthsโ notice to shift euro clearing outside Britain.
โWe would also request the Commission to inform EU market participants of its intention as soon as possible and before March 2022 to address the ongoing uncertainty confronting the Joint Associationsโ EU clearing members and their clients, which already negatively impacts their clearing business,โ the letter said.
