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EU firms slow to relocate derivatives clearing, says Esma

Created at 5 Aug · 3:36 AM1 source↑ Market-relevant
IN SHORT

European firms are complying with onshore derivatives clearing rules, but larger players are moving slower than smaller ones to shift significant business volumes into the EU, according to a key regulator.

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Who's Involved

Esma
European regulator commenting on derivatives clearing relocation

↳ Why This Matters

The pace at which firms relocate their derivatives clearing operations to the EU is crucial for the development of the bloc's financial markets and its ability to manage systemic risk.

Key facts

  • A European Union rule mandates that derivatives market participants clear a representative portion of eligible trades onshore.
  • Larger firms are meeting current compliance requirements for derivatives clearing.
  • Larger firms have been less enthusiastic than smaller players in relocating significant business volumes into the EU.

Just over a year after a European Union rule obliged its derivatives market participants to clear a representative portion of eligible trades onshore, a key regulator has stated that larger firms are complying with the current rules. However, these larger entities have so far been less enthusiastic than smaller players when it comes to moving significant shares of their business into EU central clearing houses.

Frequently asked questions

The rule requires EU derivatives market participants to clear a representative portion of eligible trades onshore within the EU.

Larger European firms are moving slower compared to smaller players in relocating significant derivatives clearing business into the EU.

Esma is a key regulator commenting on the progress and enthusiasm of firms in complying with the EU's derivatives clearing relocation rules.

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  • How It Developed

    EU rule requires derivatives market participants to clear eligible trades onshore.
    Larger EU firms are complying with current rules but are less enthusiastic about relocating significant business.
    Smaller players have shown more enthusiasm for moving business volumes into the EU.

    Sources

    T1
    Larger EU players move slower on clearing relocation, says EsmaRisk.net

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