UK attracts 1,500 EU monetary companies corporations – Day by day Enterprise
London wants to secure its place in the financial services sector
Nearly 1,500 EU-based financial services companies have applied for approval to operate in the UK. Around 1,000 of them are planning to set up their first office in the UK.
Financial regulator Bovill says the numbers provide further evidence that the UK will continue to be a leader on the global financial scene.
The data, which confirms the first 2019 figures, also shows that UK companies setting up offices in the EU are receiving a lot of attention, but there is also a lot of movement going the other way.
In October 2019, Bovill secured numbers through freedom of information showing that 1,441 companies had applied for the temporary approval regime.
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The TPR allows European Economic Area companies and funds to continue operating in the UK while UK regulators seek full approval.
Of those who applied, 83% were on a services passport, which meant their first time to set up a UK office.
With the Brexit transition period expired and the TPR window closed, Bovill repeated his FOI application in late December 2020, noting that 1,476 companies have joined the regime and are awaiting approval from the FCA to operate in the UK.
Our story last year on the first FoI request
The FOI response shows that more than 100 retail and wholesale banks are planning to relocate or increase their presence in the UK, as well as over 400 intermediary insurance and underwriting firms, indicating the strength of the UK in this area.
The countries from which most of the companies applied are Ireland, France and Germany, which together make up more than a third of the companies in the TPR.
Mike Johnson, Managing Consultant at Bovill, said: “The numbers in this FOI show that London will remain an important global financial center.
“As many of these European companies will be opening offices for the first time, this is good news for UK professional consulting firms in a variety of industries including lawyers, accountants, consultants and recruiters. The businesses of these companies should give the service sector – the powerhouse of the UK economy – a welcome boost.
“These figures also show the importance of making a decision on the equivalence of financial services between the EU and the UK.
“Recently, Amsterdam overtook London as Europe’s largest equity trading center because Brussels failed to recognize that UK stock exchanges and trading venues have the same regulatory status as its own.
“However, the FCA figures suggest that financial services companies across Europe are recognizing the power of London as a global financial center and want to do business here. Decisions on the equivalence of regulations would therefore benefit businesses on both sides of the channel. “
Mr Johnson added: “Given the interconnectedness of the UK and Irish economies and their combined strength in wealth management, Ireland is expected to top the list after Brexit.
“France and Germany will drive much of the EU’s trade negotiations, and while equivalence rules have yet to be agreed for the financial services sector, these figures show that it is in the economic interests of both sides to reach a mutually beneficial deal.
“These numbers are a good indication that the UK financial services sector will continue to be in a strong position after Brexit. The recovery in the service sector will be welcomed as the economy recovers from the outbreak of the pandemic.
“European companies should be aware that obtaining an FCA license is a complicated process and the regulator will process nearly 1,500 applications over the next few years. The FCA should try to make their authorization process as efficient as possible. ”