The UK just won a major victory against the EU, as they defeated the plan to regular OTC (over-the-counter) derivatives that would have offered the EU financial supervisors the right to supervise who can trade in London.
The EU has been working to pass this directive called the Emir (European market Infrastructure Regulation) that would regulate trading complicated financial instruments. The point of the legislation was to standardize all derivatives products that weren’t trade on a regulated exchange. The French are, apparently, seething over the latest move, as the legislation would offer the Paris-based EU financial supervisor, ESMA, the control over deciding who can be a clearing house for OTC derivatives trades.
The victory is certainly significant, as explained by George Osborne, since 75% of Europe’s OTC derivative trading happens in London. As Osborne said, “Through some hard negotiating we very much improved the directive in the direction that the UK wanted to see.” He continued by saying, “Given our concerns that business should be conducted as well outside the eurozone as inside this is a significant step forward.”