UK agrees US derivatives deal

BRITAIN and the US have agreed a deal that will ensure trading in the multi-billion-pound derivatives market continues no matter the outcome of Brexit talks.

The agreement, between the Bank of England and the US Commodity Futures Trading Commission, ensures regulatory certainty by replicating the current arrangements between the US and the EU.

It will begin on March 29 when the UK leaves the European Union. Dubbed a ‘bridge over Brexit’, it will apply even if the UK leaves without a deal.

It comes after EU regulators said earlier this month it would allow UK clearing houses to continue to provide services to firms based in the bloc, even if there was a No Deal Brexit.

US Commodity Futures Trading Commission chairman, Christopher Giancarlo, said the agreement underlined London’s status as a global financial centre, both now and ‘for a long time to come’. Derivatives are contracts that are widely used by companies to hedge themselves against unexpected moves in currencies, raw materials prices or borrowing costs.

Bank of England governor Mark Carney said: ‘Market participants can be confident that the clearing and trading of derivatives between the UK and US will maintain the high standards of today when the UK leaves the EU.’