Connect with us

Hi, what are you looking for?

Capital Business
Capital Business


UK and US strike post-Brexit financial trades deal

Authorities in both countries have said market participants can be assured of the continuity of derivatives trading and clearing activities between the UK and US, after the UK’s withdrawal from the EU by end of March this year./FILE

LondonUnited Kingdom, Feb 25 – Britain and the United agreed Monday to maintain how multi-trillion dollar financial transactions are carried out between the two countries after Brexit, aiming to avoid market uncertainty when the UK leaves the EU.

“Market participants can be assured of the continuity of derivatives trading and clearing activities between the UK and US, after the UK’s withdrawal from the EU,” said a joint statement by authorities in both countries.

“UK and US authorities are taking measures to ensure the UK’s withdrawal from the EU, in whatever form it takes, will not create regulatory uncertainty,” it added.

The UK and US carry out trades of derivatives — securities whose value is based on an asset such as currencies, stocks and commodities — worth a combined $2.4 trillion daily, Bank of England governor Mark Carney told a press conference in London.

British finance minister Philip Hammond on Monday said that “the US and UK are fundamental to the smooth functioning of the world’s multi-trillion pound derivatives markets, with around 97 percent of the centrally cleared interest rate derivatives market located in London”.

“The action we have taken today with our partners in the US will ensure that markets can continue to thrive without disruption, and is yet another example of the special relationship between our two countries,” he added.

Carney meanwhile explained that while “derivatives can seem far removed from the everyday concerns of households and businesses… they are essential for everyone to save and invest with confidence”.

“As host of the world’s largest and most sophisticated derivative markets, the US and UK have special responsibilities to keep their markets resilient, efficient and open,” Carney said.

Derivatives trades pass through clearing houses, or intermediaries between the buyer and seller.

Chair of the US Commodity Futures Trading Commission, J. Christopher Giancarlo, said London would remain “a global centre for derivatives trading and clearing”, adding that the deal provides “a bridge over Brexit through a durable regulatory framework”.

Advertisement. Scroll to continue reading.

With just over a month to go until Britain is due to exit the European Union, British Prime Minister Theresa May has said that UK MPs will have a chance to vote again on her massively-disputed Brexit deal by March 12.

After MPs rejected her withdrawal deal last month, May is seeking ways to address their concerns about its most controversial element, the so-called Irish backstop, ahead of the UK’s planned EU departure on March 29.

Click to comment

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...


NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...


NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...


NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...


NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...