Oct. 6 (Bloomberg) -- The U.K. sued the European Central Bank over plans to block trades in some euro-denominated securities from being cleared outside of the 17 countries that share the currency.
In the first such move by a government, the U.K.’s lawsuit against the ECB over its location policy for clearinghouses was registered at the EU General Court in Luxembourg. A hearing could come within two years and a ruling may take as long as three years.
The case was registered at the EU court, the region’s second-highest, on Sept. 15, according to the tribunal’s press service, the same day the U.K. Treasury said it would take action. In parallel with the court case, the U.K. is seeking safeguards in a draft EU law on over-the-counter derivatives that would protect clearinghouses from pressure to relocate.
EU finance ministers this week agreed to stipulate in the law that “no member state or a group of member states” should be discriminated against as a venue for clearing services. The final version of the rules must be hammered out in negotiations between governments and lawmakers in the European Parliament.
U.K. Chancellor of the Exchequer George Osborne said after the ministerial meeting that the draft had been adjusted to take into account his country’s concerns.
“We have inserted into the article of the draft directive an explicit reference to non-discrimination against any member state in any currency,” said Osborne said. “Of course we still have our legal action with the ECB, but in terms of the draft directive here on derivatives we have the clearest possible statement of a non-discriminatory location policy.”
The case is: T-496/11 pending case, United Kingdom v. ECB.
--Editors: Christopher Scinta, Heather Smith
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