The European Union's markets watchdog seeks to enforce charges against foreign clearing houses that seek to reap benefits on the new derivatives rules. The new rules are to be introduced throughout the 28 country bloc according to an EU document exhibited last Saturday.
The move is a clear sign on the landscape the regulators operate as they struggle to implement at the soonest possible time a whole host of reforms that have been clamored by world leaders during the most recent financial crisis. One of the rules set to be implemented was to make derivatives such as credit default swaps and interest rate swaps safer. This comes after the experience in 2008 where states were asked to bailout banks who were holding large volumes of these instruments.
The European Securities and Markets Authority though had sought action from the European Parliament through a letter sent to their offices that was seen by Reuters. The letter suggested that a levy be imposed for clearing houses. These are known as CCPs or central counterparties located from outside the European Union.
ESMA Chairman Steve Maijoor confirmed the contents of the letter dated Septemnber 24. It said that the watchdog would help vet each clearing house seeking to operate in the European Union.
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