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LSE anticipates EU to extend equivalence for derivative clearing house

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LSE anticipates EU to extend equivalence for derivative clearing house

London Stock Exchange Group PLC CEO David Schwimmer has a "strong expectation" that the European Union will grant a technical extension for the company's derivative clearing house so that the bloc's customers are allowed to use it beyond March 2020 in the event of a no-deal Brexit, Reuters reported.

Schwimmer, who was speaking at a derivative conference, said that such an extension is likely to stretch to later next year, when the British group anticipates approval for a permanent equivalence-based access.

EU equivalence is set to expire in March 2020, which could result in the bloc's firms being forced to transfer positions from London at a significant cost.

Schwimmer said LSE feels confident about its proposed acquisition of U.S.-based financial data provider Refinitiv, as it will allow the company to take advantage of growth in such segments, City A.M. reported.

Earlier in September, LSE rejected an unsolicited offer from Hong Kong Exchanges & Clearing Ltd. One of the terms of the HKEX proposal was that LSE drop its planned takeover of Refinitiv, a condition which did not sit down well with shareholders.