The EU could force euro-denominated clearing houses in London to move to the EU during the two-year transition period after Brexit in March 2019, The Daily Telegraph reported Feb. 5, citing a British government analysis obtained by the newspaper.
The European Market Infrastructure Regulation Supervision directive is one of 37 which the government report says the EU could impose on the U.K. during the transition period.
The Daily Telegraph noted that three quarters of all euro-denominated business is dealt with by clearing houses in London.
The government analysis notes that the policy is "highly likely" to materialize and carries a "high risk." Ministers have warned that the directive risks "fragmenting" financial markets and could hamper growth, the report noted.
U.K. Foreign Secretary Boris Johnson, who in 2017 suggested that the transition must be run under existing rules, urged the government to reject the introduction of new rules by the EU during the transition period, according to the report.
However, the newspaper cited an unnamed government source as saying "... virtually all of the major laws that will be introduced during the time-limited implementation period are being negotiated now, while we are in the room."
