A panel of European Union lawmakers opposed draft rules for over-the-counter derivatives trading amid concerns that the measures would burden businesses and contravene EU law.
The European Parliament’s economic and monetary affairs committee voted against the measures today in Strasbourg, France. Committee members dismissed warnings from Michel Barnier, the EU’s financial-services chief, that such a move may leave banks and other financial firms at a “competitive disadvantage” by forcing them to comply with competing sets of national rules.
European lawmakers are concerned the draft technical rules, which flesh out EU legislation from 2012, would force non-financial companies to pass their trades through clearinghouses even when the transactions aren’t systemically important, according to documents on the Parliament’s website.
Global regulators are seeking to toughen rules for the $639 trillion market for OTC derivatives, which became a target for oversight after the 2008 collapse of Lehman Brothers Holdings Inc. and the rescue of American International Group Inc., two of the largest traders in credit default swaps.
The EU Parliament committee’s verdict today sets the stage for a vote by the full assembly, which has the power to block the measures. The vote by the 754-seat Parliament has yet to be fixed and could take place later this week.
Should the full Parliament exercise its veto, the European Commission, with input from the European Securities and Markets Authority, would need to make a new proposal for scrutiny by the assembly and EU national governments. The Brussels-based commission is the 27-nation EU’s regulatory arm.