© Reuters. New 20 Euro banknotes are presented at the Austrian national bank in Vienna

By Huw Jones

LONDON (Reuters) - The European Union is expected to propose that clearing of euro denominated securities should be moved from London to the continent after Brexit, Euronext (PA: ) chief executive Stephane Boujnah said on Friday.

The European Commission is due next month to propose a draft law on regulating foreign clearing houses, which stand between the two sides of a trade to ensure its orderly completion.

"If the decision is taken to relocate clearing of euro denominated within the European Union, then clearly we will make sure it has the best impact for the Euronext market and Euronext players," Boujnah said during an earnings conference call.

"I believe this option is likely to prevail."

Rival London Stock Exchange's (L: ) LCH clearing house clears most euro denominated interest swaps, a common derivative contract used by companies across the EU to insure themselves against adverse moves in borrowing costs.

Industry bodies and policymakers in Britain have warned that a forced relocation of clearing would split pools of trading that currently offer efficiencies.

A top European Central Bank official said on Thursday that euro zone central banks must consider "action" to maintain control of euro denominated clearing outside the EU after Brexit.

Boujnah said 40 to 70 percent of trading in euro denominated assets is done in London and this will become an anomaly after Britain leaves the EU in 2019.

"We should expect one way or the other to have relocation of a significant part of trading and clearing of euro denominated assets."

Euronext said it was already helping its biggest customers, such as euro zone banks with operations in London, about what to do after Brexit.

"Their expectations are that they will need to clear more business in the euro zone than previously," said Lee Hodgkinson, Euronext's head of markets and global sales.