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The
EU's executive European Commission said on Friday it has granted
so-called equivalence to the clearing houses of India, Brazil,
New Zealand, United Arab Emirates, Dubai and to those of Japan
specializing on commodities.
The Commission has also decided that rules on trading venues in
Australia, Canada, Japan and Singapore are equivalent to the
EU's.
That means clearing houses and exchanges in those countries can
now serve EU-based customers, because their home rules are
equivalent or equally robust.
If Britain pulls out of the single market when it leaves the EU,
lawyers say, seeking a similar equivalence decision from
Brussels may be the only realistic option for its banks to
continue serving continental customers.
But a Commission official stressed equivalence decisions are
taken "case by case" and no conclusions should be drawn
concerning Britain and its talks on splitting from the EU, which
are due to start by the end of March.
The official also insisted it usually takes "a long period,
often years", for the Commission to conclude its assessment of a
foreign legal regime.
Brussels can also withdraw equivalence status at short notice,
making the regime impractical over the longer term in its
current form.
Once a country is deemed equivalent, its financial firms who
want to operate in the EU must also seek approval.
Clearing houses stand between two sides of a derivatives
transaction, ensuring its completion even if one side goes bust.
Financial firms from the United States, Switzerland, Hong Kong,
Singapore, Australia and other major jurisdictions have already
been granted equivalence status in the EU in past months and
years.
(Reporting by Francesco Guarascio, editing by Larry King)
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