The Financial Conduct authority has written to 20 of the UK largest asset management companies seeking details of their Brexit contingency plans as the regulator looks to minimise the risks of Britain's withdrawal from the EU on the City of London.
According to FTAdviser's sister paper, the Financial Times, the FCA's letter contains 30 questions about the effect of Brexit on asset managers’ business models, including whether or not UK-based companies are planning to relocate staff or operations to the EU.
The regulator is also keen to know whether asset managers' Brexit contingency plans will affect their capital base or IT systems and whether they have applied for new licences from foreign regulators.
Further questions in the letter ask to what extent fund houses are responding to Brexit based on how other companies react.
“It is important for us as supervisors to understand the plans that our regulated firms have regarding Brexit,” an FCA spokesperson told the FT.
“To help firms prepare for these conversations, we shared the details of the questions we would be asking. This was not a formal data request and was not asking firms to undertake any further work.”
The letter coincides with many investment houses taking different approaches in their preparations for the UK's exit from the EU, before negotiations over the terms of Brexit between Brussels and Westminster begin later this month.
Last week the Financial Times reported that Jupiter and Legal & General Investment Management, two of Britain’s largest fund companies, plan to set up new entities in mainland Europe in response to Brexit, while Intermediate Capital Group and M&G have already strengthened their presence in Luxembourg.
Other asset managers, including Schroders and Ashmore, are awaiting more details of the withdrawal process from the EU before taking action.