The German fund industry association, BVI, is in favour of setting up active account requirements, taking an opposing stance to that of the European Fund and Asset Management Association (EFAMA) and other organisations.
Setting up active accounts would strengthen derivatives clearing in the European Union, reducing the dependence from the London Stock Exchange Group (LSEG), the association said in a statement.
Clearing house LCH, part of LSEG, still clears some 80% of euro-denominated interest rate derivatives, but the EU has lost its supervisory powers after Brexit, it said.
“Effective monitoring and the steps required in the event of a crisis can, however, only be ensured through direct access by EU supervisory authorities and the ECB [European Central Bank],” said BVI’s chief executive officer Thomas Richter.
The German fund industry association is against EFAMA’s position, which has voiced its opposition to a mandatory introduction of active accounts, mainly representing the view of large market participants on this issue, it said.
“The implementation of active accounts is an acceptable compromise to strengthen financial stability in the EU and to maintain a competitive and efficient clearing ecosystem,” Richter added.
The BVI is also against the introduction of thresholds for active accounts, it added.
BVI has the same view of the ECB, the European Commission and the European Securities and Markets Authority (ESMA), who want to make EU financial markets from clearing houses in third countries, it said.
Last December, the Commission put forward measures to amend the European Market Infrastructure Regulation (EMIR), requiring clearing members and clients to hold, directly or indirectly, an active account at EU central counterparties (CCPs), to make clearing services in the bloc more attractive and resilient, it said.