You are not logged in.

#1 03-12-2020 16:47:45

Admin & Trader
From: Paris - France
Registered: 21-12-2009
Posts: 3050

France asks EU for derivative product rules to mitigate Brexit shock

France asks the EU to set rules on derivative products to mitigate the impact of Brexit

France's market regulator (the AMF), has asked the EU to set up product derivative trading rules to avoid harming its own financial sector when the UK finally leave the European Union next year.

Robert Ophele, the AMF's director, says that if the rules are not changed, it will penalise EU banks that trade in the UK, which is absolutely absurd.

It sounds like a final attempt to sway the view that Britain will be somehow compromised by leaving the European Union, when in reality it will be the other way around.

Socialism reigns supreme in Europe, which is one of the reasons for the lack of modernity, the lack of commercial infrastructure and the inability to compete with the regions of the Anglosphere on many levels.

Public property, organised labor and huge taxes on corporate income and financial transactions, and poor public understanding of the financial sector are some of the factors that have impeded progress in continental Europe, while Australia, the UK, North America and the Asia-Pacific region have centralised a most effective electronic financial ecosystem that powers the world's economies.

Along with these factors, many national economies in continental Europe are on the brink and in need of constant bailout, but they find that their lack of productivity and modernity, as well as the IMF's sense of entitlement has created for them, result in repeating the same coin printing exercises, which does not encourage innovators or banks to invest.

These are just a few of the reasons why the entire continent cannot stand up to the single city of London in terms of financial market capacity.

According to the AMF, under current rules, EU banks trading in London must use an EU-based or EU-approved trading system. However, UK rules require UK counterparties to trade on a UK-approved platform, making cross-Channel transactions impractical.

Mr Ophele's comments came after the European Securities and Markets Authority (ESMA) said it would simply monitor the situation.

"If we do, it will be too late. The damage will be done," he said. "I hope that the European DTO can also be quickly adjusted" he adds.

The bulk of trades that the rules cover, he says, are in London, which means that 70% of volumes processed by EU banks in this city may be lost.

Attempting to create a deep financial market from scratch to avoid reliance on London without a "critical mass" of players would be "detrimental" to the EU, he adds.

Interesting, when you consider that the vast majority of the entire trading cycle for any trade in the world takes place end-to-end in London, with mainland Europe completely unaffected. It would be fair to consider that the AMF is concerned that the Brexit will mainly harm European entities since they are part of the same political bloc that will end on the first day of January.

In the forex business, London is the absolute power for the entire region and, in fact, one of the world centers for the entire financial services industry. It is a huge income producer and has very dedicated and knowledgeable professionals who continue to strive to move forward in very sophisticated ways.

All the cognitive prowess of London's senior executives is based on a massive and sophisticated technological infrastructure that ranges from hosting (Equinix LD4 being one of the largest electronic trading data centers in the world) to order routing systems, liquidity management and internally developed interbank and institutional trading systems, which are supported by hundreds of developers and engineers per bank.

"Anything worth having is worth going for - all the way." - J.R. Ewing



Board footer