Dublin in regulatory alertforfirmsfixing to set up post-Brexit
FINANCIAL firms looking to relocate due to Brexit must demonstrate that local management will be accountable for decision making and that operations can be effectively supervised, the Central Bank in the Republic has said.
The regulator reiterated its desire for “real financial services” adding that it was actively engaging with all firms that have expressed an interest in moving to Ireland, or expanding operations already based here.
Dublin has been tipped as a possible contender for companies looking to shift operations out of London, although it faces competition from cities including Paris, Frankfurt, Luxembourg and Brussels.
Michael Hodson, the Central Bank’s director of asset management supervision, said a new team had been set up in the regulator in order to manage Brexit-related authorisation queries.
“Our regulatory approach is in line with sound practices being agreed across Europe. Our responsibility is to ensure that firms authorised to operate from Ireland demonstrate compliance with EU requirements,” Mr Hodson said.
“To this end, we seek to ensure that an entity will be substantively run from Ireland and that the set-up permits effective supervision, with local management accountable for decision making. From a supervisory perspective, it is simply not sustainable to entertain proposals that fall short of these requirements.”
Earlier this month Central Bank chief economist Gabri- el Fagan said that “the game is afoot” in Ireland’s ability to attract investment from London as a result of Brexit, despite losing out to other European capitals for insurance giants like AIG and Lloyds.
The regulator says five companies have sought authorisation as insurance or reinsurance undertakings since November, and another five have signalled a firm intention to do so. A further 20 insurance entities have contacted the Central Bank to discuss authorisation.
Mr Hodson told a Bloomberg conference that it will accept applications and “deal with them in a transparent, robust, consistent and predictable manner”.
Earlier this month the Bank of England asked City financial firms to submit Brexit contingency plans, with governor Mark Carney warning of major economic harm if negotiations between the UK and the EU falter.
And Citigroup, which employs around 1,500 people in NI, sent a memo to staff following the triggering of Article 50, trying to address concerns surrounding Brexit contingency plans.