Regulators have granted a last-minute reprieve to three clearing houses in Germany in addition to also Britain by having to give customers more choice under completely new European Union market rules that will come into effect on Wednesday.
One of the aims of the rules, known as the Markets in Financial Instruments Directive, or MiFID II, will be to make that will easier for people to choose where to clear the listed derivatives contracts they buy in addition to also sell.
This particular might be done through the “open access” rule, which stops any requirement to clear a derivative contract within the same exchange group that will traded the contract.
however Britain’s Financial Conduct Authority (FCA) said that will received applications for an open-access waiver by ICE Futures Europe in addition to also by the London Metal Exchange.
This particular means the exchanges might not yet have to make modifications to allow customers to clear contracts elsewhere.
The FCA said that will has decided to grant transitional arrangements inside the interests of ensuring there will be an “orderly functioning market.”
“Accordingly, with effect by 3 January 2018, ICE Futures Europe in addition to also LME will not be required to consider open-access requests … as they relate to exchange-traded derivatives, until the expiry of the transitional period on 3 July 2020.”
BaFin, the German markets regulator, announced late on Tuesday that will that will had granted the same time-limited waiver to Deutsche Boerse’s Eurex Clearing arm.
Open access has been a feature of share trading in addition to also clearing for many years, however its introduction to listed derivatives has proved divisive.
Some EU policymakers in addition to also Deutsche Boerse had warned about financial stability risks by opening up derivatives clearing to competition, however critics had said This particular was an excuse to prevent competition.