City of London to present post-Brexit plan to Brussels
As SMFG prepares to relocate some of its activities from London to Frankfurt due to Brexit, a delegation from the City of London heads to Brussels aiming to protect the UK’s financial services.
3 July 2017
A high-powered delegation from the City of London will head to Brussels this week with “a secret blueprint” to protect the UK's financial services after Brexit, the Financial Times reported.
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The newspaper said the International Regulatory Strategy Group, which Mr Hoban heads and which is backed by the City of London Corporation and The CityUK lobby group, had spent months working on the free-trade blueprint, advised by lawyers at Hogan Lovells.Meanwhile, SMFG announced it was joining fellow Japanese bank Daiwa to open a new EU subsidiary in Frankfurt because its UK operation “could face future restrictions” after Brexit. The bank said it needed to ensure it could “continue offering banking services to clients with no disruption once the UK leaves the EU”.It added, “The purpose of this expansion is to increase the flexibility of SMFG's marketing and operations structure so that it can continue to offer financial services to its clients with no disruption following the planned withdrawal of the UK from the EU.”
Read David Sapsted's article on Establishing Right to Remain – which discusses the uncertainty over immigration which the UK faces following Brexit – in the Summer 2017 issue of Relocate Magazine.
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'Mutual access' for financial groups to operate in UK and EU markets
The news came as major Japanese bank, Sumitomo Mitsui Financial Group (SMFG), announced it was to become the latest financial institution to relocate some of its activities from London to Frankfurt because of Brexit fears the UK will lose the 'passporting rights' that currently enable the sector to operate freely across Europe.According to the Financial Times, former City minister Mark Hoban will lead the delegation to Brussels to propose a plan “based on the principle of mutual access – allowing financial groups from the UK and the remaining 27 members of the EU to operate in each other’s markets without barriers if the UK leaves the single market”.Shared financial regulatory supervision
The report said the plan would also involve shared regulatory supervision and joint dispute resolution. It added, “Banks in particular fear they may have to move thousands of staff to financial centres such as Frankfurt and Dublin. Barclays has become the latest institution to move ahead with plans to shift some operations to the Irish capital.“The City proposal is an example of how financial services are fearful of leaving their fate in the hands of official UK negotiators while talks are focused on narrow, divorce-related issues and Theresa May’s government has reasserted its goal of a hard Brexit involving leaving the EU single market.“The City delegation, which has already received cautious support from German officials during a recent trip to Berlin, will be hoping to convince countries such as Spain and France of the merits of their plan, which could influence the European Commission during talks with the UK government’s Brexit negotiators.”Related news:
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The newspaper said the International Regulatory Strategy Group, which Mr Hoban heads and which is backed by the City of London Corporation and The CityUK lobby group, had spent months working on the free-trade blueprint, advised by lawyers at Hogan Lovells.Meanwhile, SMFG announced it was joining fellow Japanese bank Daiwa to open a new EU subsidiary in Frankfurt because its UK operation “could face future restrictions” after Brexit. The bank said it needed to ensure it could “continue offering banking services to clients with no disruption once the UK leaves the EU”.It added, “The purpose of this expansion is to increase the flexibility of SMFG's marketing and operations structure so that it can continue to offer financial services to its clients with no disruption following the planned withdrawal of the UK from the EU.”
Government engagement with business community is critical
Amid mounting fears among financial sector and other business leaders that their needs are being ignored by the government, Brexit Secretary David Davis has announced he will host a conference at Chevening House in Kent on Friday for them to express their concerns and aims.A government spokesman said, “With negotiations under way, the Secretary of State for Exiting the European Union is determined to bolster the government's engagement with the business community on Brexit. That is why he recently announced an intention to co-ordinate activity with the prime minister, chancellor and business secretary to ensure we tap into the wealth of specialist knowledge from businesses up and down the country.”Read David Sapsted's article on Establishing Right to Remain – which discusses the uncertainty over immigration which the UK faces following Brexit – in the Summer 2017 issue of Relocate Magazine.
For related news and features, visit our Brexit section.Access hundreds of global services and suppliers in our Online Directory
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