Bond trading volumes drop as Europe’s market digests most ambitious change in a decade.
The proposed reforms of Europe’s clearing industry would potentially increase the links between London and the rest of the EU, which is particularly contentious given that the shape of the UK’s relationship once it leaves the trading bloc is unclear. Clearing houses sit between two parties in a trade and manage the wider risk if one side defaults. The reprieves only apply to one part of the sprawling Mifid II legislation that has been almost a decade in the making and is designed to bring more transparency and competition to financial markets in Europe. The UK’s Financial Conduct Authority, which only assumed the powers to grant a delay on Wednesday, said the extension was to ensure the “orderly function” of clearing in Europe.
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