February 12, 2020 / 11:01 AM / 9 days ago

UK hopes for EU green light for derivatives after Brexit-BoE's Woods

LONDON, Feb 12 (Reuters) - Britain is optimistic that it will get permission from the European Union for British clearing houses to continue processing trillions of pounds of derivatives for customers in the bloc, Bank of England Deputy Governor Sam Woods said.

Britain left the EU last month and a “standstill” transition period is due to end on Dec. 31.

The London Stock Exchange’s LCH unit holds positions worth 57 trillion pounds ($74 trillion) on behalf of clients in the EU and needs permission to continue clearing for them after December.

“Unfortunately, that issue will come back again in September because firms need a bit of time to act if the solution is not put in place,” Woods told British lawmakers on Wednesday.

“I’m cautiously optimistic that our colleagues in the EU will deal with that one,” he said when asked about the biggest risks to Brexit disruption in financial services.

Without permission from the EU, known as equivalence, LCH would have to serve notice on its customers in the bloc by September that they should shift their positions to a clearing house recognised by the EU. ($1 = 0.7703 pounds) (Reporting by Huw Jones and David Milliken Editing by William Schomberg)

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