The European Commission said on Wednesday it will allow US financial firms to provide central clearing services in the European Union.

The decision coincides with the UK’s efforts to secure similar access to European markets.

“The European Commission today adopted an equivalence decision determining that the United States Securities and Exchange Commission (SEC) regime for US central counterparties (CCPs) is equivalent to EU rules,” said the Commission.

“Today’s decision is an important first step for US CCPs registered with the SEC to be recognised in the European Union.

“It will allow such US CCPs to apply for recognition by the European Securities and Markets Authority (ESMA).

“Once recognised by ESMA, these US CCPs will be able to provide central clearing services in the EU.”

Central counterparties (CCPs) are bodies that operate between the buyer and seller of a derivative contract, becoming the buyer to every seller and the seller to every buyer.

Their use was encouraged by the G20 following the financial crisis, to reduce risk in derivatives trading. Derivatives markets are global in nature.

Mairead McGuinness, Commissioner responsible for Financial Services, Financial Stability and the Capital Markets Union, said: “This decision is a significant first step in the process of recognising US CCPs registered with the US Securities and Exchange Commission in the European Union.

“We  look forward to continued good cooperation between EU institutions and agencies, and the US Securities and Exchange Commission.”