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Bourses urge EU to speed up rulings on clearing houses 

September 3, 2015

Huw Jones, Reuters

The European Union should speed up recognition of non-EU clearing houses to avoid compounding emerging market volatility and fragmenting the $630 trillion derivatives market, a global exchanges body said on Wednesday.

The World Federation of Exchanges (WFE) said delays by Brussels in deciding whether to allow non-EU clearing houses to continue serving European users risk a capital flight from some emerging market economies.

Clearing houses stand between two sides of a trade to ensure a transaction is completed even if one side goes bust. Regulatory approval is becoming more pressing because mandatory clearing of some derivatives contracts starts next year, meaning customers must decide soon which clearing house they will use.

The EU's executive European Commission must deem a third-party country's clearing house rules to be "equivalent" or as strict as those in the 28-country bloc.

Read more: Reuters

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