Watchdog to act over online betting deals
THE EUROPEAN Central Bank has put forward proposals that would enhance its oversight over euro clearing, adding to fears that London is set to lose its grip on the multi-billion pound market following Brexit.
The ECB has tabled a prospective legal amendment that would give it a “significantly enhanced” role in regulating the lucrative market, which settles business and trade conducted in the EU currency.
The amendment would provide the ECB with “clear legal competence” in the area of central clearing, which is currently dominated by London firms such as LCH.
The ECB said: “These powers include a significantly enhanced role for central banks of issue in the supervisory system of central counterparties (CCPs), in particular with regard to the recognition and supervision of systemically important third-country CCPs clearing significant amounts of euro-denominated
It added that the change will allow “the Eurosystem” to monitor and address risks associated with central clearing activities that could affect the conduct of “monetary policy, the operation of payment systems and the stability of the euro”.
The move comes after the European Commission put forward legislative reforms that would impose stricter supervision of the bloc’s derivatives market and could force operators to leave London as a result of Brexit.
EU institutions and member states had raised concerns over the fact up to 75 per cent of eurodenominated interest rate derivatives are currently cleared in the UK, which will no longer be supervised transactions.” by EU regulators once it leaves the bloc.
The head of Frankfurt Main Finance, the German city’s lobby group, has recently said that euro clearing businesses are already moving accounts to the country.
The recommendation has been sent to the European Parliament and the Commission will issue an opinion on it, the ECB said.
Britain’s finance industry will warn the government next week to limit ministers’ powers to change legislation when it begins the mammoth task of converting EU laws into domestic legislation in preparation for its exit from the bloc, according to a draft report.
The government will introduce legislation to incorporate EU laws into the domestic statute book from the day Britain leaves the union, which is expected to be in 2019.
This has been described as Britain’s biggest ever legislative challenge because it must convert more than 12,000 EU regulations into British law – a step seen as necessary to ensure continuity for businesses trading across EU borders.
Though certain British politicians and business leaders voted to leave the EU to reform or abolish some EU laws, a report by law firm Linklaters for a group funded by TheCityUK, Britain’s most powerful financial lobby group, warns the government against making changes when transferring them into domestic law.
The report says that an attempt to complete the exercise in less than the two years before Britain is scheduled to leave the EU could be “an overwhelming task” and create gaps in the law, undermining legal stability.
The government is considering a line-by-line approach to amending the laws, which would leave businesses and lawyers struggling to track the number of changes, the report says. THE COMPETITION watchdog is to take enforcement action against online gambling companies suspected of breaking consumer law.
The Competition and Markets Authority (CMA) said that it is taking the action because punters are not getting the deal they expect from sign-up promotions, and some operators are “unfairly holding on to people’s money”.
Sign-up promotions are designed to attract players on to casino-like gaming websites by offering bonus cash when they put in their own money.
The move follows a joint programme with the Gambling Commission and comes amid concerns that promotions offered by some online bookies come with terms and conditions that are often “confusing and unclear and, in some cases, may be unfair”.
The CMA said: “Customers might have to play hundreds of times before they are allowed to withdraw any money, so they don’t have the choice to quit while they’re ahead and walk away with their winnings when they want to.
“Even when players haven’t signed up for a promotion, there are concerns that some operators are stopping customers taking money out of their accounts.”
The watchdog added that, having identified a number of operators engaging in practices likely to be breaking consumer law, it is now taking enforcement action and has a range of powers at its disposal to bring any illegal activities to an end.
Nisha Arora, CMA senior director for consumer enforcement, said: “We know online gambling is always going to be risky, but firms must also play fair.
“People should get the deal they’re expecting if they sign up to a promotion and be able to walk away with their money when they want to.”