“Europe’s top financial regulator has demanded the US urgently amend its imminent reforms to the $633tn derivatives market, in an intervention aimed at preventing Washington from extending its reach overseas.

“The letter from Michel Barnier, the EU commissioner responsible for financial services, addresses growing industry unease and transatlantic tension over the US launch of regulated electronic exchanges for swaps, which go live on Wednesday.

“Under the Commodity Futures Trading Commission rules, a derivatives trading platform – whether based in London, Zurich or Hong Kong – must register and follow the US rule book if it trades with a US counterparty.

“In his letter to Gary Gensler, chairman of the CFTC, Mr Barnier said the requirements for non-US platforms threatened to work against the US-EU deal struck this summer, which sought to mark out regulatory turf in policing derivatives markets.”

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