Reuters: No EU access for UK clearing houses after June 2025, McGuinness says

11 February 2022

There will be no access to the European Union for Britain's derivatives clearing houses after June 2025, the bloc's financial services chief Mairead McGuinness said on Friday. Britain's departure from the EU has largely severed the country's financial services ties with the bloc.

But clearing in London of euro-denominated derivatives for banks and asset managers in the EU was allowed to continue because of the risk of market disruption if the huge volumes involved had to be moved in a short time.

The London Stock Exchange's LCH business holds 92 trillion euros in euro interest rate swaps positions, compared with 11.4 trillion euros at Deutsche Boerse in Frankfurt.

Brussels on Tuesday extended "equivalence", meaning UK clearing access, until June 2025 for a final time to reduce heavy "over-reliance" on clearers in London. read more

Bank of England Governor Andrew Bailey said on Thursday that Brussels should not have set a time limit on clearing access, and that seeking to fragment the international financial market cannot be justified. read more

McGuinness said the EU had an open financial market and wanted to build up its own capital market.

"I am very clear that June 2025 is the end of equivalence for UK clearing houses," McGuinness told a Politico event....

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