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EU eying rules that could move key London financial market

In keeping with traditional practice, Colonel Geoffrey Godbold, center, the City of London Corporation’s Common Cryer and Serjeant-at-Arms reads out the Proclamation of the Summons for a new Parliament on the steps of the Royal Exchange, in the City of London, Thursday, May 4, 2017. All 650 seats in the House of Commons are up for grabs in the June 8 election. (Matt Dunham / Associated Press)
By Danica Kirka Associated Press

LONDON – The European Union is preparing new rules that could force a key financial market, and potentially thousands of jobs, to leave London once Britain exits the bloc.

The European Commission says it will present next month new rules on the oversight of this market, the so-called clearing of euro-denominated trades. In financial markets, clearing is the business of acting as an intermediary in a trade to reduce the risk of default.

When asked Thursday whether clearing companies would be forced to leave the U.K. if they wanted to continue handling euro-denominated trades, Commission Vice-President Valdis Dombrovskis said the EU was “looking at this issue.”

He said: “The bulk of EU denominated derivatives are cleared in the U.K., and therefore we need to assess what implications it has for financial stability.”