The cost of using financial derivatives is likely to increase if euro-denominated clearing is relocated from London to the European Union after Brexit, trade association ICMA said on Wednesday.
Around 90 percent of euro derivatives are cleared in London, but the EU is looking at several ways to address this as Britain prepares to leave the bloc including forced relocation of this multi-trillion euro business.
"Mandatory relocation...is likely to increase costs for end-users of the derivatives market, given current economies of scale in London from pooling liquidity in several currencies," said Paul Richards of the International Capital Market Association in its quarterly report.