Several clearers to vie for EU derivatives trade

BRUSSELS, May 7 (Reuters) - There is likely to be strong competition in Europe for clearing credit default swaps to make markets safer for investors, a top regulator said on Thursday.

The European Union's executive European Commission has extracted a pledge from dealers and banks to clear CDS contracts in Europe from the end of July.

Similar efforts are underway in the United States as part of wider, global efforts to make off-exchange traded derivatives markets more transparent and less risky.

"There will be five to six applications for central counterparties," said Eddy Wymeersch, chairman of the Committee of European Securities Regulators.

A central counterparty must be authorised and supervised. It ensures there is a buyer for every seller and a seller for every buyer with collateral posted in case of defaults.

It helps to provide an electronic archive for regulators to see who is trading, the assets involved and level of risk.

CESR will also come forward at a later date with plans to create a "warehouse" in the EU for registering CDS transactions, mirroring a similar one run by the DTCC in the United States.

"We want to have more transparency, we want post-trade transparency," Wymeersch told reporters.

(Reporting by Huw Jones, editing by David Cowell)