Monday's meeting of EU states and the European Parliament to get a deal on derivative laws has been cancelled after the states failed to reach a negotiating position.

The meeting had been arranged to strike a deal to tighten laws on the $700trn derivatives market after the EU, the US and other leading world economies agreed to finanlise a crackdown on derivatives by December 2012.

Monday was supposed to see a final round of negotiations with parliament over a definitive legal text but now EU finance ministers hope to break the deadlock at their regular meeting in Brussels on Tuesday.

While Germany is against giving binding mediation powers to the European Securities and Markets Authority in disputes between national regulators, the UK wants an amendment to ensure that firms from outside the EU can do business in the bloc if their home regulatory regime is "equivalent," or just as strict which France opposes.

The draft law aims to push the vast majority of teh $700 OTC derivatives trading into clearing houses which can cover in case one side of the trade goes bust.

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