The UK prime minister’s landmark speech on the government’s Brexit priorities has left asset managers little clearer over their future, and most large firms have remained tight-lipped over their plans in light of the uncertainty.
Last week Theresa May offered to pursue a “bold and ambitious” free trade agreement with the EU, but also signalled the UK would leave the single market.
The speech effectively confirmed that UK financial services firms will no longer be able to benefit from the current passporting arrangements that allow them to do business in the EU.
Instead, they are now relying on “equivalence” rules, which ensure non-EU countries can trade in the bloc if they conform with regulatory standards. But the fate of this process once Mifid II comes into force in January 2018 is uncertain.
A further period of unease awaits fund firms as a result.
When asked about their plans following Mrs May’s speech, several leading fund houses were unavailable for comment.
The speech also failed to provide guarantees to EU workers living in the UK regarding their right to remain in the country, creating a further headache for asset managers and their clients.
The Investment Association broadly welcomed the speech, but suggested a significant proportion of the sector’s employees now faced uncertainty about their future in the UK.
Chief executive Chris Cummings said: “The prime minister emphasised the urgency of providing certainty for EU workers in the UK, who make up 11 per cent of workers in the asset management sector.”
