The EU is making a move on London's euro-clearing market, and has been putting together proposals to corner UK businesses into relocating or submitting to regulation from Europe.
The European Commission plans to put out legislative proposals in June affecting London's clearing businesses, the Financial Times reports.
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Both France and Germany have previously suggested that Brexit will curb London's dominance in euro-clearing, and now it appears the bloc is moving ahead with plans to impose restrictions on UK firms.
A draft policy document proposes "more centralisation of supervision" of clearing businesses in the EU if they provide "critical capital market functions", according to the FT. In addition, Brexit will have a "significant impact" on oversight because Britain will have a substantial power in the markets, but will be outside the EU's regulatory reach.
The paper says that for non-EU firms "specific arrangements based on objective criteria will be necessary to ensure that, where CCPs [central clearing counterparties] play a key systemic role for EU financial markets...they are subject to safeguards provided by the EU legal framework.
"This includes, where necessary, direct supervision at EU level [and/or] location requirements."
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