‘ But it’s not all bad news. Once the dust has settled more European firms are likely to open offices in the UK. Figures show half of the firms already using the current temporary permissions regime to access the market already have a UK presence.
“Brexit was always likely to create change in the dispersal of financial services firms,” Tom Bohills, co-vice chairman of The CityUnited Project. “However this movement has been overwhelmingly in the UK’s favour. Almost 1,500 EU-based financial services firms have applied for permission o operate in the UK.”
That does get a mention in the report from New Financial. The 1500 TPR applications are mostly the EU firms with existing offices in the UK who now need the red tape of needing permission to stay. Others will want the red tape of opening a UK office in order to avoid the red tape of doing business in the UK without a UK office that they never needed before. It's another attempt by Brexiters to polish the Brexit turd, clickbait for the Express.
From the New International report:
A likely landing zone
A closer look at the firms using the TPR
suggests that the eventual number that will open a new office in the UK is likely to be a lot lower than the prevailing narrative of ‘about 1,000’ firms. We think it is more likely to be around 300 to 500 (mainly smaller) firms.
The 300+ firms using the TPR with an existing office in the UK obviously won’t have to open a new office. Many of the 470 firms that are part of a larger group with a presence in the UK will likely piggy back off that group office and perhaps hire or move some key staff - and some of them may decide that their existing group structure means they don’t need to have a presence here after all.
That leaves 663 firms with no physical presence in the UK who would probably need to open a new office and set up a new branch or subsidiary in order to have continued access to the UK market (as a matter of course, the FCA would expect an authorised firm to have a local presence). Using the EU passports they were using as a proxy, we estimate that over 40% of
these firms are from the insurance sector, 28% are in broking and trading, and around one fifth are payments firms.
Many of these firms are small: for example, of the 30 banks in this sample, two thirds of them have assets of less than €5bn and the largest (Swedbank with €140bn in assets) closed its UK branch office in 2016. The decisions facing UK and EU firms are asymmetric: for a UK firm, setting up a new office in the EU provides access to 27 member states (and may require substantial relocations). For an EU firm, setting up a UK office provides access to just one.
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