REUTERS/Russell Boyce/File Photo
Traders from BGC, a global brokerage company in London's Canary Wharf financial centre react, as European stock markets open.
The FT, which has seen the report, says the report estimates that 31,000 sales and trading jobs at banks could go and 18,000 back office legal and accounting roles could be lost.
The report also thinks that 15,000 jobs in wealth and asset management could be at risk and 12,000 positions at companies that provide technology to finance firms.
The report is a "worst case scenario" that sees the City fail to gain "equivalence" rights to still operate across the EU post-Brexit and lose all euo clearing activity. EY estimates the job losses would take 7 years.
The report was commissioned by the London Stock Exchange (LSE), according to the FT, and has been shown to government officials and MPs, although specifics were not given about who exactly has seen it.
EY and the LSE were not immediately available for comment when contacted by Business Insider. Both declined to comment to the FT.
Clearing houses in London manage credit risk, acting as a middle-man in swaps and derivatives trades to guarantee the contract in the event that one of the parties involved in the trade goes bust.
The acceptance of English law and widespread use of English language has made London a hub for clearing globally. It controls 70% of clearing involving euro-based deals, according to Sky News. Bloomberg says London processes $570 billion (£460.9 billion, €511 billion) worth of trades daily.
British-based firms that handle euro clearing currently do so under EU "passporting" rules, which allow companies to operate across the 28-nation bloc using the financial licence of their local country rather than getting regulated in each market.
It is looking increasingly likely, however, that Britain will lose its passporting rights after Brexit. EU officials have repeatedly signalled that Britain cannot retain passporting rights without also accepting freedom of movement, something that Prime Minister Theresa May appears unwilling to do. She is prioritising control over immigration.
Britain has repeatedly had to defend its right to clear trades, given that it does not use the euro itself. The UK last year won a court battle to continue clearing in London.
However, France has repeatedly signaled that it wants to steal the business from London. President Francois Hollande said Britain couldn't retain its key clearing role shortly after the June 23 referendum. France's finance minister Michel Sapin also told Sky News last month: "One thing is sure, no one in the Eurozone will accept that the main clearing place will be outside the European Union."
France is trying to lure British finance firms to Paris, promising to fast-track regulation applications. Paris, London's nearest rival for clearing, handles 11% of all euro trades.