LONDON (Reuters) - Britain won backing from its European Union partners on Monday to prevent parts of its financial services sector potentially having to relocate to the euro zone.
Britain is already taking the European Central Bank to the bloc’s highest court for its policy of requiring clearing houses which help process a significant amount of euro-denominated transactions to be based in the single currency area.
London-based LCH.Clearnet is a major clearer for instruments denominated in euros.
On Monday, EU ambassadors formally endorsed a preliminary deal they reached last Thursday on updating the bloc’s MiFID securities trading rules to take into account advances in technology and lessons from the financial crisis.
Britain, as part of agreeing to that deal, called for a new clause to be inserted and this was backed by ambassadors at Monday’s meeting.
The clause, shown on a document obtained by Reuters, says no action taken by any regulator or the European Securities and Markets Authority (ESMA) should discriminate against any member state as a venue for the provision of investment services and activities in any currency.
EU finance ministers are set to rubberstamp the MiFID deal on Friday, opening the way for negotiations with the European Parliament on a final text to take effect in 2014 or later.
Ambassadors agreed that Britain’s clause could be revisited during those negotiations following concerns expressed by countries such as France.
The deal marks a coup for Ireland in the final two weeks of its presidency, after the draft law was bogged down in disagreements for nearly two years.
Reporting by Huw Jones; Editing by Pravin Char