“This is absolutely key to us", Javid said in an interview with Bloomberg News. The UK is pushing for “more competition and greater transparency on exchanges. A key part of that is not tolerating monopolistic practices by certain exchanges or clearinghouses".
European Union nations have repeatedly clashed over how far the EU should go in forcing exchanges such as Germany’s Deutsche Boerse AG to open up their derivatives clearing services to competition as part of an overhaul of the bloc’s financial market rules.
While governments including the UK, the Netherlands and Finland have argued that greater competition will reduce costs for investors, others including Germany and Spain have said that the plans would fragment markets and harm financial stability.
Many trading venues, including two in Britain, and one elsewhere in Europe “are tied to certain clearing venues", Javid, who used to work for Deutsche Bank AG before entering Parliament three years ago, said. “We want to see more competition and greater ease of access, in a non-discriminatory way, for all market participants.”
Michel Barnier, the EU’s financial services chief, proposed the competition-boosting measures in 2011 as part of a broader overhaul of EU market legislation known as MiFID. Barnier’s plan seeks to challenge the model used by some exchanges where trades, once agreed, are automatically channelled through an exchange’s in-house clearing service. Talks on the draft law by national officials earlier this year brokered a compromise, which scaled back some of Barnier’s open-access provisions. The final version of the law must still be negotiated with the European Parliament, which has argued for an even more restrictive approach toward access to trade-feed data. Javid has said he hopes this can be done by year-end. “It’s still possible to reach a successful conclusion on this", Javid said.
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