FCA questions asset managers on Brexit plans
The Financial Conduct Authority (FCA) has written to a number of asset management firms based in the UK, asking them to reveal their plans over Brexit, in a bid to plan for any potential mass outflows from London to other European bases.
According to a report in today’s Financial Times, the UK regulator has written to some of the largest asset managers asking them a series of questions about their contingency plans depending on the outcome of Brexit, in a bid to plan for a potential exodus of financial firms from their current bases in the City.
The FT report said that the the letter contains 30 questions, including asking if the firms plan to move any staff to the EU following Brexit and how they think Brexit will affect their businesses.
Domino effect
One question relates to concerns of a ‘domino effect’ of companies leaving en masse asking to what extent fund houses are responding to Brexit based on how other companies react.
Other questions included if they have applied to overseas regulators for new licences and if Brexit will affect their capital base.
As reported, a number of asset managers and other financial institutions are currently considering moving considerable numbers of staff overseas because of Brexit, with Europe’s biggest bank HSBC confirming plans to move at least 1,000 jobs from London to Paris.
Intermediate Capital and M&G have already expanded their presence in Luxembourg, with other companies such as Schroders and Ashmore said holding back on plans to restructure operations until there is more clarity on how Brexit will affect the financial services industry.
New European offices
The FT report added that and both Jupiter and Legal & General Investment Management (LGIM) are planning to set up new offices in continental Europe.
As reported, Jupiter has already recently opened European headquarters in both Spain and Italy to deal with increased European demand for its funds.
A spokesperson for the FCA told The FT: “It is important for us as supervisors to understand the plans that our regulated firms have regarding Brexit. This was not a formal data request and was not asking firms to undertake any further work.”
The FCA letter follows on from a similar, but more forceful initiative from the Bank of England, in April, contacting big financial services companies asking them to set out their plans for a hard Brexit, giving them a deadline of July 14 to respond.
