LONDON, June 24 (Reuters) - The European Union said it has delayed the introduction of rules aimed at increasing competition in derivatives clearing after concerns that the COVID-19 pandemic has hindered market preparations.
Representatives of EU states and the European Parliament cited "adverse circumstances arising from the COVID-19 pandemic", a statement from the Council of EU states said.
The rules would allow market participants to choose where they want to clear their listed derivatives trades, pitting clearers like the London Stock Exchange's LCH, Deutsche Boerse's Eurex, and ICE against each other.
The rules, part of the EU's MiFID II securities law, were due to come into force on July 4 and will now be delayed a year until July 4, 2021.
They were controversial in the making, with lawmakers' concerns over the potential impact on financial stability disputed by proponents of greater competition in markets.
The European Securities and Markets Authority said on June 11 that market disruption from COVID-19 could increase operational risks by limiting the capacity of clearers to assess access requests and manage the migration of transactions.
Britain's Financial Conduct Authority said it backed ESMA's stance.
Clearing houses ensure a securities transaction is completed even if one side of the deal goes bust. (Reporting by Huw Jones Editing by Gareth Jones)