Political pressure on customers to shift clearing from London could drive the activity to the United States, Rolet said. LCH is a major clearing house for such transactions in the United States. Maintaining regulatory equivalence between the EU and Britain after Brexit would be crucial for clearing in London for EU customers to continue, Rolet added. This "compression" of trades meant that risk worth US$110 trillion was eliminated by LCH last year, saving US$25 billion in regulatory capital, he said. Clearing contributes about a third of the LSE's business and the exchange is planning to merge with Deutsche Boerse in Frankfurt, which has its own clearing house.

Source: The Edge Markets November 02, 2016 15:18 UTC