(Adds more detail)
By Huw Jones
LONDON, Jan 27 (Reuters) - Clearing houses for securities in
the United States will be allowed to serve investors in the
European Union, the bloc's executive European Commission said on
Wednesday.
"This decision is a significant first step in the process of
recognising U.S. central counterparties registered with the U.S.
Securities and Exchange Commission in the European Union," the
EU's financial services chief Mairead McGuinness said in a
statement.
Clearers registered with the SEC include DTCC, ICE Clear
and London Stock Exchange's Paris-based LCH SA.
Clearing houses ensure the completion of a stock trade even
if one side of the deal goes bust, and the EU had already
granted market access for U.S. clearing houses for derivatives.
But Wednesday's open-ended "equivalence" decision by
Brussels contrasts with the time-limited access the EU has given
clearers in Britain since it fully left the bloc on Dec. 31.
UK clearers, including the London arm of LCH, only have
access for 18 months until June 2022, time the EU said this week
that banks in the bloc should use to shift chunks of their euro
derivatives positions to the euro zone.
The EU executive said U.S. securities clearers must respect
certain risk management requirements known as "liquidation
periods" and "anti-procyclicality measures" to activate EU
access.
The EU wants to avoid U.S. clearers having a competitive
advantage over European peers due to having less restrictive
versions of such rules.
(Reporting by Huw Jones; Editing by Kirsten Donovan)
