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UK successfully challenges European Central Bank policy on location of clearing houses

T-496/11: United Kingdom v ECB. The General Court of the European Union has ruled that the European Central Bank (ECB) was wrong to insist that euro clearing houses should be based in the single currency area.

On 4 March 2015, the General Court of the European Union (Fourth Chamber) allowed an application for annulment brought by the United Kingdom relating to a challenge to a location policy, adopted by the European Central Bank, for Central Clearing Counterparties (CCPs). The General Court ruled, contrary to submissions from the ECB, that the UK's challenge was admissible. The UK was able to bring the challenge even though it was not a party to the Eurozone arrangements. It also upheld the UK's challenge to the competence of the ECB to adopt the location policy. The location policy required CCPs clearing a specified volume of Euro a day to be located within the Eurozone. The General Court ruled that the ECB does not have the competence necessary to regulate the activity of securities clearing systems. The location policy was accordingly annulled on the basis that the ECB had no power to make it. The UK had mounted the challenge against the ECB policy arguing that the policy went against the EU's single market establishing the free movement of goods, people, services and capital. It would have forced the London Stock Exchange's LCH.Clearnet clearing house to move its euro-denominated operations to continental Europe.
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