Should I stay or should I go ?
Kristian Karppi , Managing Director of K & K Global Consulting
buy-side associations are preparing to seize the opportunity by making it easier for UK based buy-side firms to relocate to their countries . Increasing the pressure on Asset Management firms that evaluate if they should keep their head office in London , ESMA released on the 13th July 2017 “ OPINION to support supervisory convergence in the area of investment management in the context of the United Kingdom withdrawing from the European Union ” with recommendations on how national authorities within the EU should prevent AIFMD and UCITS asset management firms from just implementing non-substantial shell companies within the EU in order to gain a passport .
Looking at recent articles from the Financial Times and the Independent , most buy-side firms who have already confirmed they will transfer London staff have named Dublin and Luxembourg as their future EU base . Considering the use of English as a business language , personal taxation of staff and less restrictive labour laws , we predict that Dublin is most likely to attract firms transferring staff to varying degrees out of London .
Trading venues
On the 13th July 2017 , ESMA published the “ OPINION to support supervisory convergence in the area of secondary markets in the context of the United Kingdom withdrawing from the European Union ” which suggests that national authorities should prevent regulated markets , multilateral trading facilities ( MTFs ) and organised trading facilities ( OTFs ) from only establishing shell companies within the EU to gain passport rights .
Future centralised supervision and enforcement by the European Securities and Markets Authority (“ ESMA ”)
A recent news article in the Financial Times ( 19th September 2017 ), suggests that the European Commission is proposing to give EMSA central supervisory powers over the EU member states regulators to enforce harmonised financial regulation and prevent regulatory arbitrage between the EU countries . The UK objected such proposals already back in 2012 before the British referendum .
There are always two sides to every story - one can only make theoretical assumptions based on current trends but the parameters dictating these trends are likely to change over time .
Stay tuned , more to follow …
Autumn 2017 www . buysideintel . com
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