EU finance firms rush to open UK offices

About 1,000 EU-based financial services firms have applied for permission to open their first offices in the UK because of Brexit, according to official data obtained under the Freedom of Information (FOI) Act.

David Sapsted

23 February 2021

The figures, obtained by financial management consultancy Bovill, show that in the lead-up to the December 31 Brexit deadline, 1,476 EU-based companies had applied for recognition under the Temporary Permission Regime (TPR) and were now awaiting approval to operate in Britain from the Financial Conduct Authority.Significantly, 83 per cent of these applications were from firms without existing offices in the UK.The highest number of applications came from financial sector companies in Ireland (230), followed by France (186), Germany (168), Cyprus (151), the Netherlands (106) and Luxembourg (101).The data also showed that more than 100 retail and wholesale banks planned to move to, or boost their data presence in the UK, in addition to more that 400 insurance and insurer intermediary firmsThe data also showed that more than 100 retail and wholesale banks planned to move to, or boost their presence in the UK, in addition to more than 400 insurance and insurer intermediary firms.Mike Johnson, managing consultant at Bovill, said: “The numbers from this FOI provide evidence that London is set to remain a key global financial centre."Since many of these European firms will be opening offices for the first time, this is good news for UK professional advice firms across multiple industries including lawyers, accountants, consultants and recruiters. Business from these firms should provide a welcome boost to the service sector – the powerhouse of the UK economy.“These numbers also indicate the importance of reaching a decision on financial services equivalence between the EU and UK. Recently, Amsterdam overtook London as Europe’s largest share trading centre because Brussels has not recognised UK exchanges and trading venues as having the same supervisory status as its own."However, the numbers from the FCA suggest that financial services firms across Europe recognise London’s potency as a global financial centre and want to be able to conduct business here. Regulatory equivalence decisions would therefore benefit businesses on both sides of the channel.”Mr Johnson added that it was little surprise Irish firms topped the list of applicants, given the close links between the two nations' economies and their shared strength in asset management.He added: "France and Germany will be driving much of the EU’s trade negotiation and whilst equivalence rules for the financial services sector are still to be agreed, these numbers show that it is in the economic interest of both sides to secure a mutually beneficial deal.“These numbers are a good indication that the UK financial services sector will continue to be in a strong position post-Brexit. The boost to the services sector will be welcome as the economy begins its recovery from the blow of the pandemic.“European firms should note that obtaining an FCA license is a complicated process, and the regulator is going to be very busy processing almost 1,500 applications over the next couple of years. The FCA should look to make their authorisation process as efficient as possible.”