The New York Stock Exchange owner has again warned that trading could move away from Europe if the continent pursues new rules in the coming days to introduce more competition for derivatives. Lawmakers want to introduce competition and flexibility for listed derivatives. Among the changes will be a move that could break the link between some exchanges' control of both their futures trading and clearing products. It would allow customers like fund managers and banks the choice to open a position on one market and close it on another — a move known as “open access".
"One thing the market fails to understand between equities and derivatives is that the NYSE never invents or creates a product," Jeff Sprecher, chief executive told FT Trading Room. "We don't make the decision about where companies want to list their shares. We run a utility business. It's very different from listed derivatives where the exchanges decide to list the products. The real solution is to leave it to exchanges to decide what to allow to be netted with others. Right now there’s tremendous competition for listed products."
Some large fund managers, brokers and the London Stock Exchange Group have been among those calling for the changes. However, the policy is likely to depend in part on the final wording of the legislation, against which policy makers will balance clearing houses' need to manage risks in the financial system. Publication of the planned technical standards is expected in the coming days.
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