The joint signatories are drawn from the issuer or user side of the market along with investors, brokers and intermediaries, indicating the breadth of the concern felt by those active in the European financial market.
With regulations and market conditions changing over coming years, the ACT's concern is for non-financial companies and others that use derivatives primarily as hedging instruments. They are likely to need to make greater use of derivatives traded on exchanges and other facilities rather than directly with banks. Companies will thus be concerned about competition in post-trade services including clearing.
Martin OâDonovan, Deputy Policy & Technical director at the Association of Corporate Treasurers, commented:
âThe organised trading facilities or exchanges are for a significant part of the market vertically integrated with a clearing house and do not allow access to competition from other clearers. We are already seeing significant merger activity in this space, so the impending threat to competition is very real unless safeguards for market infrastructure are in place. It is all the more pointed in that the letter to Commissioner Barnier draws support from all sides of the market.â