LONDON, July 9 (Reuters) - Clearing houses in the

European Union were able to cope with theoretical shocks that

included fallout from climate change for the first time, EU

regulators said on Tuesday, while underscoring the ongoing

dominance by UK operators in some asset classes.

Clearers stand between buyers and sellers of securities,

ensuring their trades are completed even if one side goes bust.

The European Securities and Markets Authority (ESMA) tested

how 16 clearing houses, including those owned by exchanges such

as Euronext, Deutsche Boerse, ICE,

London Stock Exchange Group ( LDNXF ) and Cboe,

generally coped with several theoretical disruptions, such as

multiple users defaulting.

"ESMA's fifth stress test confirmed the overall resilience

of the European clearing landscape to severe credit and

liquidity stress scenarios," Klaus Loeber, chair of ESMA's

clearing house committee, said in a statement.

Some clearers, however, need to strengthen risk management,

or how they deal with "concentration".

Market participants with large positions in a particular

asset class face "add-on" or extra requirements for margin, or

cash posted at clearers to help cover any default.

For many asset classes a single clearer accounts for the

bulk of add-ons across the market, such as for interest rate

derivatives, or forex derivatives at London Stock Exchange

Group's ( LDNXF ) LCH clearing arms in London, ESMA said.

ICE dominates commodity derivatives and emission allowance

clearing add-ons, but for stocks, and equity and credit

derivatives, there is no single dominant clearer, ESMA said.

The EU has passed a law aimed at reducing the bloc's heavy

reliance on clearers like LCH and ICE in London.

EU permission for LCH and ICE to continue serving bloc-based

customers directly from London is due to expire in June next

year, but the ESMA test results highlight the challenge of

reducing their dominance over EU rivals in a short period of

time.

The watchdog said most of the clearers have started to

integrate climate risk from assets like stocks and bonds into

their in-house stress testing.

"This exploratory analysis should be understood as a

yardstick for further action with regard to climate risks'

monitoring," ESMA said.