UK Clearing under the spotlight in the EU

By Paul Kelly

Linear Investments is a clearing, custody and execution house providing access to most global equity markets and all key financial instruments: Equities, ETF’s, Fixed Income, Futures, Options and all the structures needed to support these instruments – SWAPS/PB/Stock Loan and derivative instruments.

EU banks and fund managers have long used established clearing houses in the UK, and despite the advent of Brexit, still continue to do so. The BoE has recently commented on this following the initial EU deadline of June 2022 that was set for its banks and fund managers to find alternatives within the bloc to London’s clearing services. The EU indicated it was less comfortable being dependent on a non-EU country for what is a critical financial infrastructure, but all the time the BoE continues to perform as an excellent regulator, EU firms are unlikely to see a move to EU clearing houses as necessary or viable. In some cases it would lead to split trading books which is less efficient.

London leads the way in both technology and service; key drivers in global banks and fund managers choosing the city for their clearing needs. Europe’s securities regulator, Esma, has supported EU banks and fund managers, ruling in December that moving business from London to within the EU held more risks than benefits. It seems likely that transactional business in London from the EU will remain the norm for the time being at least.

Linear has become a highly recognised brand in the financial market over the last 10 years, supporting market structure as our global client’s scale. We provide a quality of service that differs from bigger institutions, addressing the industry’s mid-market requirements and offering a reliable solution to smaller firms. Operational excellence also means customers can rely on timely and accurate updates on their business; Linear’s reporting and monitoring processes reflects our customers expectation. Our primary day to day focus is to provide efficiently managed client centric solutions, ensuring a seamless experience for all functions that the business provides. Linear is a clearing, execution and custody provider, working with a global client base.