Financial Conduct Authority  

EU firms slow to register for post Brexit licence

EU firms slow to register for post Brexit licence

No European Union financial firm operating in Britain has applied for a licence from the Financial Conduct Authority (FCA) to continue operating her post Brexit.

These firms may lose their right to “passport” their services into the country once the UK leaves the European Union in March 2019.

In an interview with Reuters, Andrew Bailey, chief executive of the FCA, said: “We haven’t had any yet. I would say this is still talks about talks in some ways."

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The news wire reports that almost 13,500 banks, insurers, asset managers and other financial firms use EU passporting rules that allow easy access between Britain and the rest of the bloc, highlighting the importance of the issue in Britain’s Brexit negotiations.

More firms in Europe were using passporting than UK-based firms.

According to the FCA about 8,000 firms are using ‘inbound’ passports issued by the other 27 EU states to allow them to do business in Britain or elsewhere.

Nearly 5,500 firms are using ‘outbound’ passporting issued by UK regulators, as of September last year.

While the number of passports has increased since then Mr Bailey said it is not clear whether it meant those with passports would want to maintain them in some form for European business.

He said: “When you raise the bar in terms of the mechanics of actually getting the access, how many would say we’re not actually using it, we’re not going to do that, we don’t know.”

While details of how Brexit will work are still largely lacking time is of the essence considering the process needed to go through to continue business.

Some have already indicated moves: Bank of America to Dublin while Barclays suggested it would extend its licences in Ireland; Citigroup (for sales and trading) and Nomura have chosen Frankfurt for post Brexit business.

Mr Bailey said: “If everybody who now currently has a passport to come into the UK wants to have an authorisation in future - aside from whether it’s a branch or a subsidiary or what - it’s a big number.”