The European Commission (EC) is preparing legislation to impose control on London’s euro-clearing market, according to reports.
The proposals – described as a “power grab” by Brussels – would result in increased European oversight of the UK capital’s €850bn (£720bn) per day business in a move that supports more “centralised supervision” of clearing houses that have systemic importance by providing “critical capital market functions” to the European Union (EU), according to the Financial Times.
The EC’s legislative proposals are likely to be issued as early as next month, the FT reports, and will put pressure on UK businesses to relocate or submit to regulation from Europe.
Germany and France, the leading members of the 28-state EU, have previously suggested that the UK vote for Brexit will curb London’s dominance in euro-clearing, and now it appears the bloc is moving ahead with plans to impose restrictions on UK firms. The UK’s departure from the EU will have a “significant impact” on oversight as post-Brexit Britain will have a substantial power in the markets but be outside the EU’s regulatory reach.
For non-EU firms, there will be arrangements based on “objective criteria” that ensure any external clearing markets playing a significant role in the EU’s financial markets are subjected to EU oversight. “This includes, where necessary, direct supervision at EU level [and/or] location requirements,” adds the FT.
The US money market fund reforms came into effect in 2016 and are already dramatically shaping US fund industry with investors flooding out of prime funds and into government securities. While the reforms are similar, they are not the same. GTNews interviews Yeng Bulter, global head of the cash business at State Street Global Advisors on the differences.
There are various ways for financial institutions to benefit from advanced technologies and business models provided by FinTech's. Whether a business' approach is radical or incremental, data management can help a company to increase their return on investment, argues André Casterman, INTIX.
Due to the low interest rate environment and Basel III regulation many corporate treasurers, who may have in the past been very reliant on the banking sector to provide them with cash management solutions, have been forced to explore alternative options as banks have been refusing short dated cash deposits.
Far and away, the largest financial market on the planet is the foreign exchange currencies market, where on average individuals and organisations trade more than $5 trillion daily. In the FX world, the ability to master the market isn't considered a luxury for treasury officers–it's a necessity.