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Brexit fix for derivatives proposed


Stock photo: PA Wire/PA Images

Stock photo: PA Wire/PA Images

Stock photo: PA Wire/PA Images

THE European Union's markets watchdog has proposed a temporary fix to avoid uncleared derivatives contracts worth trillions of euro being disrupted if there is a no-deal Brexit next March.

Derivatives can act as a form of insurance in large-scale financings.

The European Securities and Markets Authority (ESMA) said the changes would give banks one year to "repaper" or shift their uncleared, over-the-counter derivatives positions from London to the EU.

Such moves would not trigger the requirement to clear those contracts. Customers can begin taking steps to shift contracts - which requires permission from the end-customer - but make any action conditional on a no-deal departure, ESMA said.


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