Little appetite among EU finance companies to stay in London as FCA applications disappoint

Thursday, December 30, 2021 at 15.35

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It seems that many European financial services companies are not interested in continuing to be authorized in the city, as only half of EU companies that were granted a temporary license to operate in the UK – immediately after Brexit – have applied for full authorization, a freedom of information request has revealed.

The city’s watchdog, the FCA, had set up a temporary licensing scheme in the months before Brexit to allow EU-based businesses to continue trading in the city while the final rules and regulations were drafted.

The temporary license, called ‘landing slots’, was set up to support companies that were submitting to the UK before Brexit, and it was agreed that they would continue to operate if they applied for full FCA or PRA permission. .

However, Financial news found that only half of the companies that were allocated landing sites actually applied for full authorization in the UK, suggesting that there is little or no appetite among some firms to remain active in the UK.

Even after the FCA wrote to dozens of companies over the summer, applications reportedly did not increase. On September 30, the window closed, and only 39 out of 72 companies expected to apply did so.

This means that 46 percent did not apply to the FCA, significantly higher than the regulator’s initial expectation of about 20 percent.

Access to the UK market

One explanation may be that some European companies may have had pastil permits that they did not actually use, according to Esrar Moitra, a former FCA employee working for the compliance consulting firm Braithwate.

“Companies headquartered in Europe have found that they can actually branch out to the UK instead of having to set up licensed UK units, and many have gone that route, so it will certainly have reduced some of the numbers.”

Niki Beattie, Founder and CEO of Market Structure Partners

“Possibly it’s ominous for the UK because the difference is quite large,” said Niki Beattie, founder and CEO of Market Structure Partners, which advises companies on capital market infrastructure issues. Financial news.

“Going down the branch route helps companies save capital and get a lighter feel for management. Perhaps you could interpret this as meaning that the UK has less reach in the future – companies do business here but have no headquarters here.”

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