Traders warn of confusion on clearing of credit derivatives under EC plans

DERIVATIVES traders yesterday gave a broad welcome to the European Commission&rsquo;s (EC) proposals on measures to improve transparency, but warned against the creation of a central European clearing house.<br /><br />The EC&rsquo;s proposals include standardisation of derivatives products and a central data repository for the &pound;363 trillion industry. But European regulators are also considering expanding a central clearing house already proposed for credit-default swaps to include all derivatives.<br /><br />Critics say creating a second clearing house alongside one already planned for the US would be confusing. Manoj Ladwa, a derivatives trader with ETX Capital, said: &ldquo;I see no need for more than one clearing house. It would complicate matters as differences of opinion and definition could arise.&rdquo;<br /><br />The International Swaps and Derivatives Association has also cautioned against pushing derivatives trading onto exchanges, as has been planned in the US.