European Union regulators are considering amending rules on central clearing of derivatives trades in a bid to end a long-running dispute with the U.S. that threatens to fragment markets.

The European Securities and Markets Authority (ESMA) on Monday proposed to reduce the amount of collateral needed to cover potential losses to one day's activity on a position as in the U.S., from two days as is currently the situation in Europe. The rules would apply to gross omnibus accounts and individual segregated accounts for exchange-traded derivatives and securities—essentially futures and options—and doesn't affect the swaps market, where contracts are traded bilaterally.

Central clearing companies stand between traders, holding capital and collateral to ensure losses at a trading firm don't harm its counterparties. They're seen by regulators as a firewall to prevent a repeat of the 2008 crisis, when interconnections between firms threatened the financial system. The EU-U.S. dispute is over how much collateral—known as initial margin—should be put up when a trade is initiated.