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BREXIT Puts London Bankers Out Of EMIR`s Reach. Good Or Bad?

Summary:

  • The Brexit leaves also to exiting the EMIR-Zone
  • Exiting EU means also no more EMIR, meaning no more paperwork for traders but also no more transparency
  • Is that good or bad?

In an article found here (Source:www.cer.org.uk/insights/seven-blunders-w...) Agata Gostyńska-Jakubowska, a research fellow at the CER, mentions the implications for London Bankers regarding EMIR (European Market Infrastructure Regulation): Anyone who trades currencies institutionally remembers the EMIR registration requirement. Gostyńska-Jakubowska believes when the UK leaves the EU, Traders would continue to be bound to their EMIR agreement in force and trading could be construed as "illegal". Luckily for myself, having traded on average 8 yards per month in EURUSD and EURCHF back in 2014 when EMIR was a topic, I used special purpose companies that were all incorporated outside of the EU. It meant I was not required to register with EMIR and not required to do all the nasty paperwork. So in that point I can just confirm a Brexit would be positive. As London Traders are smart, they would simply notify their EMIR Agents and EMIR Registration Entities (yes, there are member entities that act as a sort of notifying agent between the trading entity and the EMIR Database so to speak in legal layman terms) and inform them about a change in seat of incorporation, namely having moved outside of the European Union. Based on this notice, there is no further legal requirement to be registered under EMIR and London Currency and other Derivatives Traders would probably be very, very, very happy about that because it would mean no future registration required, no paperwork to submit required meaning less costs to monitor and service the legal framework meaning more time to concentrate on trading achieving more profits. But it also means no more transparency.

The real question is: Did/Does EMIR actually help market participants to have more transparency what OTHER market participants do or was/is EMIR just sending information one way towards the EMIR database but never receiving your way aggregated information regarding a transparent state of the derivative/currency you just sent yourself?

So if EMIR is/was more transparency, for whom? Does EMIR leave the market better off or worse? And if the Brexit were to become legal reality, would the changes of EMIR be good or bad for the market participants?

Comments please!

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.