More than 1,000 EU financial firms plan to open UK offices after Brexit

London

MORE than a thousand banks, asset managers, payments companies and insurers in the European Union (EU) plan to open offices in post-Brexit Britain so they can continue serving UK clients, regulatory consultancy Bovill said on Monday.

The new offices and staff will help mitigate the loss of business going the other way as the current unfettered two-way direct access between Britain and the EU comes to an end in December following a Brexit transition period.

As a first step, the companies, who until now have been able to serve UK customers directly from their home base, have applied for temporary permission to operate in Britain after Jan 31, when the UK leaves the bloc, Bovill said, using figures obtained from Britain's Financial Conduct Authority.

"These figures clearly show that many firms see the UK as Europe's premier financial services hub," said Michael Johnson, a Bovill consultant.

More than 300 financial firms in Britain have opened EU hubs to continue serving clients in the bloc after Brexit, a survey from the New Financial think tank has found.

Consultants EY said on Monday that large UK-based firms had now implemented plans enabling them to continue operating in the EU after Brexit. It maintained its estimate that around 7,000 positions would be relocated from London to the continent and a further 2,400 jobs created and hired for locally at the new EU hubs.

Firms are now carefully watching negotiations on Britain's future relationship with the EU, EY said.

UK finance minister Sajid Javid told the Financial Times on Saturday that future EU access would be under the bloc's "equivalence" system, a patchy and basic form of access used by the US, Singapore and Japan.

"For many, equivalence would provide much-needed certainty, but it is a complex framework with over 40 provisions, which is not guaranteed long term, and means different things to different firms," said Omar Ali, EY's UK financial services leader.

Bovill said 228 Irish firms had applied for temporary permission to keep serving UK clients until they obtain authorisation for a new UK hub.

EY said banks will have to decide whether having multiple hubs after Brexit makes economic and strategic sense. REUTERS