EU Fails to Agree on Markets Law Amid Swaps-Clearing ClashJim Brunsden
European Union nations must resume talks on a draft law to overhaul the bloc’s financial market rules, after ambassadors failed to resolve a clash between the U.K. and Germany on competition in derivatives clearing.
Ireland, which holds the EU’s rotating presidency, will seek to broker compromises on the measures, which would toughen oversight of high-frequency trading, and impose limits on traders’ positions in commodity derivatives markets, according to three European officials who aren’t authorized to be cited by name, in line with policy.
Michel Barnier, the EU’s financial services chief, proposed overhauling the EU’s Markets in Financial Instruments Directive, or Mifid, to counter “speculative trading activities” and implement agreements reached by the Group of 20 nations. His plans would also boost competition by forcing exchanges to hand over trade data to rival clearinghouses, so that they can compete in processing derivatives transactions.
The data-access plans are supported by the U.K. government, which says that greater competition will reduce costs for investors. Germany has resisted, arguing that the move would fragment markets and harm financial stability. The competition issue is the main one sticking point in the talks, said the officials.
Ireland’s EU presidency will continue efforts to reach consensus on the draft law, said a spokeswoman, who also couldn’t be named, in line with government policy.
She said Ireland also aims to start negotiations with the European Parliament on the measures. The final version of the law must be agreed on by governments and by the EU assembly.