The decision has been expected – now clarity is clear for UK clearing service providers: as the EU market regulator ESMA announced today, clearing houses such as LCH, ICE Clear Europe and LME Clear may continue to operate in the European Union after the end of March Doing business with the Union.
They would then be recognized as „central counterparties from a third country“. The British suppliers compete with Deutsche Börse’s clearing house, which has recently gained more market share in this market, which has a market worth many billions of euros.
Clearing houses are involved in securities transactions between buyers and sellers and ensure the smooth handling of transactions. Especially the clearing of euro-denominated derivatives is highly contested. Until recently, LCH had almost a monopoly position here, meanwhile Eurex Clearing’s market share is eleven percent.
Eurex is part of the Deutsche Börse Group and one of the largest derivatives exchanges in the world. According to current plans, Britain will leave the EU on 29 March. Whether there is a corresponding contract between the state and the international community is currently completely unclear. It threatens a hard Brexit.
