Paris and Frankfurt are teaming up to challenge London’s dominance of the euro clearing market.
Lobby groups Paris Europlace and Frankfurt Main Finance today issued a joint statement wading into the bitterly-fought euro clearing debate.
They suggested that European authorities should ensure that clearing houses fall under the jurisdiction of the European Court of Justice (ECJ), which the UK is set to leave as part of Brexit.
They also called for clearing houses to have to operate within the European Market Infrastructure Regulation (Emir) legal framework.
The groups drew criticism in the UK for stating that the UK will “in all likelihood lose access to the common market” after Brexit.
Anthony Belchambers, chairman of the honorary advisory council of the Financial Services Negotiation Forum, said: “That, I think, is a deeply inappropriate statement to make when the negotiations haven't even started. To try and pre-empt the outcome of the negotiations in that way in inappropriate.”
The groups said: “Frankfurt Main Finance and Paris Europlace urge the responsible European authorities to clarify their position without delay and by doing so, bolster certainty in this systemically relevant pillar of the European financial system.”
The statement comes after the European Commission last month laid out new proposals for euro clearing, setting the scene for the London-dominated market to be uprooted and moved to the continent.
Stephane Boujnah, the chief executive of France-headquartered pan-European exchange Euronext, yesterday voiced his support for the proposals at a Europlace conference in Paris.
“I think the European Union and the regulators have made the point extremely clear,” he said. “[The proposals] tell the UK: this is your choice, you decide.
Either you believe that Brexit does not mean Brexit for clearing, and you accept that for clearing purposes Brexit will stop and you will accept the jurisdiction of the European Court of Justice, the regulation of the ECB, et cetera., and you will be regulation takers. And that’s fine – and then the world can continue as it used to be.
Or you believe that Brexit means Brexit, even for clearing, and that you want to take back control, and that therefore you are going to walk away from the regulatory environment of the previous world. And then [euro clearing] cannot stay any more outside of the European Union.