With the recent piercing spring frosts and winter cold reflecting the bitter, prospective doom of ruinous post Brexit ramifications, it must surely raise hope when good news is pronounced and Britain can allow its stoic determination to be intelligently optimistic once more for a much-needed brighter future.
To date, almost 1500 European firms have applied to be regulated in the UK ahead of Brexit, revealed by financial regulation consultancy Bovill, through a Freedom of Information request filed, which showed 1,476 firms applied for authorisation from the Financial Conduct Authority under its temporary permissions regime.
Around 1000 were looking to have an official base in the UK for the first time, where previously they had relied on ‘passporting’ to serve UK clients from all over Europe. As Mike Johnson, the managing consultant at Bovill added “Many of these European firms will be opening offices for the first time, which is good news for UK professional advice firms across multiple industries including lawyers, accountants, consultants and recruiters.” He further stated that it should also provide a welcome boost to the service sector, suggesting London is set to remain a key financial centre with many European firms foreseeing the benefit of retaining close working relationships with our country.
Ed O’Bree, a partner at Bovill, concluded: “In practical terms, these figures mean that European firms will be buying office space, hiring staff and engaging legal and professional advisers in the UK. This augurs well for the UK economy, as the country will retain its reputation as a prime location for financial services in Europe.”
The list reveals more than 400 insurance firms and 100 banks plan to relocate or elevate their presence in the UK, with the highest applications, geographically, coming from Ireland, France and Germany; firms from these three countries accounted for more than a third of the applications.
While it’s to be expected that Ireland, with 230 Irish firms, having had such interlinked economies and shared strengths in asset management were likely to continue being fortified, there were 186 from France, 168 from Germany, and Cyprus, a popular venue for trading platforms, saw 151; in addition Netherlands came in at 106 and Luxembourg with 101.
There have been ripples of doubt when it was observed that billions worth of trading had moved from London to Amsterdam, and derivative trade shifted to New York. Jes Staley, chief executive of Barclays downplayed this as a response to the journalists citing these figures, saying “I wouldn’t over react to the stock trading coming out of Amsterdam,” he said. “The main pool of capital that is managed out of London today is pretty much unchanged from where it was six months ago or a year ago. I don’t think you have an exodus that should make people stand up and say: oh my god, does London have a problem?
“I’m still very constructive on the City. There’s competition from capital markets all over the world — from Singapore to Tokyo and now Europe as well. But London’s got some tremendous assets. I don’t think it’s in anyone’s interests to shrink the second largest capital market in the world. I think London will be fine. I think the European Union will want to stay connected to the financial markets in London,” Staley said. He finished by stating it would be beneficial for both Governments to “collaborate and cooperate.”