(Adds more detail)
LONDON, Sept 15 (Reuters) - The European Union is expected
to grant clearing houses in Britain access to the bloc's market
for 18 months from January, industry sources said on Tuesday.
Britain left the EU in January and unfettered access under
transition arrangements ends on Dec. 31, meaning EU banks would
not be allowed to use clearing houses like the London Stock
Exchange's LCH and ICE Clear Europe from January.
LCH clears the bulk of euro-denominated interest rate swaps
and the EU has acknowledged that a sudden cut-off in access
could undermine financial stability as users sought to shift
large derivatives positions at short notice.
Industry sources said they expected the bloc's executive
European Commission to agree an 18-month extension, subject to
confirmation following a consultation with EU states launched on
Monday.
"This is going to be good news," one industry source said
after market concerns that a shorter period was on the cards.
Euro clearing has long been a point of tension between
Britain and the EU, where policymakers want the activity
relocated to the euro zone under the eye of the European Central
Bank.
Temporary access is aimed at putting pressure on banks to
shift positions from London's financial hub and to give more
time for euro zone based clearers to build up capacity in an
orderly way.
The European Commission had no immediate comment.
(Reporting by Huw Jones; editing by Jason Neely and Mark
Potter)
