Brexit: Hopes for a market-led exit from UK derivatives clearing

Halloween has arrived and the UK has not crashed out of the EU. But within the financial services sector a Brexit battle continues between Frankfurt and London regarding the clearing of euro-denominated derivatives, a business worth some $660 trillion (€603 trillion).

European venues, namely Deutsche Boerse’s derivatives arm Eurex Clearing, have ramped up their efforts to encourage both EU and UK-based market participants to switch their business from London to the continent.

Asset managers are large users of derivatives for portfolio management purposes and managing risks such as currency exposure.

However, Matthias Graulich, Eurex Clearing executive board member, tells Funds Europe the hope is that any migration will be market-led. “No one in the market wants forced relocation of clearing from the UK to an EU 27 venue. We see a superior path in a voluntary and market-led migration,” he says.

Our full report, ‘A UK horror story’ can be found here.

©2019 funds europe

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