The European regulation was originally intended to increase the robustness of the over-the-counter derivatives market, by forcing all OTC trades through a clearing house. But some policymakers now want the new rules to cover derivatives listed on an exchange, turning the Emir text into a battleground over competition in the European derivatives market.
Roger Barton, founder and director of the Financial Reform Consultancy, said: “The inclusion of listed derivatives is creating a very potent political cocktail, creating opportunities for some and significant risks for others. The merger of Deutsche Börse and NYSE Euronext makes it even more political, as the rule change could potentially threaten the deal valuation.”
The inclusion of listed derivatives would break open the lucrative vertical silo model operated by Deutsche Börse, where trades executed on the exchange are automatically cleared through its own clearing house, Eurex Clearing. Analysts say this could affect the value of the $10bn deal.
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