By Huw Jones
LONDON, Dec 1 (Reuters) - The City of London is determined
to make sure that it remains the top centre for clearing
euro-denominated financial derivatives, a senior London Stock
Exchange official said on Tuesday, as Britain's finance industry
steps up its lobbying for permanent access to the European Union
after Brexit.
Policymakers in the bloc see Britain's full departure from
the EU on Dec. 31 as a chance to shift large chunks of clearing
in widely used euro derivatives from London to Eurex in
Frankfurt.
As banks have moved so few holdings, the EU has given
temporary "recognition" to let the LSE's LCH unit keep serving
EU customers until mid-2022 - although EU banks will still have
to shift trading of the contracts from the UK to the bloc from
Jan. 1, after a post-Brexit standstill agreement expires.
"The constant message we have had from all customers, all
clients, EU and otherwise, is that they want to continue to have
access because of the access to liquidity," LSE head of clearing
Daniel Maguire told an online event held by the U.S. settlement
house DTCC.
LCH was "pretty secure", with volumes increasing, he said.
"We need to leave the politics aside and move to the next
phase, and we are hoping to secure some degree of permanent
recognition in the months and years to come."
Before the EU decides on long-term access, its European
Securities and Markets Authority (ESMA) is reviewing whether
euro clearing is too important to stay outside the bloc.
ESMA Chair Steven Maijoor said on Tuesday this assessment
will consider the degree of cooperation in information-sharing
between the EU and LCH's home regulators in Britain.
The "base case" is that markets are global and activities
should be undertaken where there is expertise, though such
expertise was being built up inside the bloc, Maijoor told an
Afore Consulting event.
(Reporting by Huw Jones; Editing by Kevin Liffey)