London's derivatives clearinghouses could be allowed to continue serving big banks in the European Union (EU) for 12 months after a no-deal Brexit, as part of the EU's preparations to avert turmoil in financial markets, according to three people with knowledge of the matter.

The plan, if formally adopted by the European Commission, would be a reprieve for London's main clearinghouses—units of London Stock Exchange Group Plc (LSE) and Intercontinental Exchange Inc. (ICE), as well as the London Metal Exchange (LME). Industry groups and U.K. regulators had warned that without legal certainty from the commission, EU banks would need to start this month closing out contracts cleared in the U.K.

The commission, the EU's executive arm, settled on the duration of a so-called equivalence decision for U.K. clearinghouses in a meeting on Wednesday with officials from EU member states, the people said. Equivalence, a judgment that a non-EU country's rules and supervision are as robust as the EU's, is part of the procedure the bloc uses to grant foreign firms access to the single market.