| UK & Europe | Insights, Press releases
NEWS RELEASE: Almost 1,500 EU-based financial services firms have applied for permission to operate in the UK, with around 1,000 of these planning to establish their first UK office, according to a Freedom of Information request (FOI) by financial regulatory consultancy Bovill. With Brexit complete and the Temporary Permission Regime (TPR) now closed, these represent the final number of firms on the regime, signifying that the UK will continue to be a leading player on the global financial stage.
Mike Johnson, Managing Consultant at Bovill, comments:
“The numbers from this FOI provide evidence that London is set to remain a key global financial centre. Since many of these European firms will be opening offices for the first time, this is good news for UK professional advice firms across multiple industries including lawyers, accountants, consultants and recruiters. Business from these firms should provide a welcome boost to the service sector – the powerhouse of the UK economy.
“These numbers also indicate the importance of reaching a decision on financial services equivalence between the EU and UK. Recently, Amsterdam overtook London as Europe’s largest share trading centre because Brussels has not recognised UK exchanges and trading venues as having the same supervisory status as its own. However, the numbers from the FCA suggest that financial services firms across Europe recognise London’s potency as a global financial centre and want to be able to conduct business here. Regulatory equivalence decisions would therefore benefit businesses on both sides of the channel.”
The FOI response shows that more than 100 retail and wholesale banks plan to move to or boost their presence in the UK, as well as over 400 insurance and insurer intermediary firms, indicating the UK’s strength in this area. The countries from which the largest number of firms have applied are Ireland, France and Germany, which together account for over a third of the firms on the TPR.
Mike Johnson, Managing Consultant at Bovill, continued:
“Ireland at the top of the list is to be expected, given how interlinked the UK and Irish economies are and their shared strength in asset management, a relationship which these numbers suggest will continue post-Brexit. France and Germany will be driving much of the EU’s trade negotiation and whilst equivalence rules for the financial services sector are still to be agreed, these numbers show that it is in the economic interest of both sides to secure a mutually beneficial deal.
“These numbers are a good indication that the UK financial services sector will continue to be in a strong position post-Brexit. The boost to the services sector will be welcome as the economy begins its recovery from the blow of the pandemic.
“European firms should note that obtaining an FCA license is a complicated process, and the regulator is going to be very busy processing almost 1,500 applications over the next couple of years. The FCA should look to make their authorisation process as efficient as possible.”
Bovill’s FOI from last year showed 1,441 firms had applied to the TPR and 83% of these were on a ‘services’ passport, meaning they would need to set up a UK office for the first time. With the Brexit transition period over and the TPR window closed, Bovill repeated its FOI at the end of December 2020 finding 1,476 firms have signed up to the regime and are awaiting FCA authorisation in order to operate in the UK.
For further information, please contact:
Polly Barton – Bovill
+44 (0)20 7620 8440
Tabitha Adams – Luther Pendragon
+44 (0)7500 013062
Bovill is a specialist financial services regulatory consultancy, established in 1999 and headquartered in the UK with offices in London, Chicago, Singapore and Hong Kong. Our sole activity is the provision of high-quality, technically-focused advice and consultancy services on all aspects of financial services regulation. We aim to develop effective solutions to the complex problems of our clients, and do not offer commoditised advice or services. Bovill has experts spanning all aspects of financial regulation in the UK, EU, Asia and the Americas.
Notes to Editors
Freedom of Information (FOI) response from the FCA on 29/01/21:
Thank you for your email of 31 December 2020, about the Temporary Permission Regime (TPR).
We have processed your email as a request for information under the Freedom of Information Act 2000 (FOIA). For ease of reference we will respond to each point in turn.
- The total number of notifications received from firms to use the temporary permissions regime.
As at 14 January 2021, the total number of firms in TPR was 1,476.
- The total number of notifications received from firms to use the temporary permissions regime broken down by the firm’s home state.
The information you have requested is contained in the table below.
|Country||Number of Firms|
- The total number of notifications received from firms to use the temporary permissions regime broken down by firm type.
The requested information is contained the table below.
|Firm type||Number of firms|
|Advisers and Intermediaries||95|
|Alternative Asset Manager (e.g. hedge fund / private equity manager)||6|
|Contracts for Differences (CFD) Providers||96|
|Corporate Finance Firms||4|
|Custody Services and Administrators||5|
|Debt purchasers, debt collectors and debt administrators||1|
|Lloyd’s and London Market Intermediaries (inc Managing General Agents)||90|
|Lloyd’s Managing Agents and London Market (Re) Insurers (inc P & I Clubs)||51|
|Mainstream Consumer Credit Lenders||2|
|Motor Finance Providers||1|
|Multilateral Trading Facilities and Organised Trading Facilities||5|
|Multilateral Trading Facility||3|
|Organised Trading Facility||1|
|Payment Services Firm||176|
|Personal and Commercial Lines Insurance Intermediaries||316|
|Personal and Commercial Lines Insurers (inc EEA Insurers)||121|
|Principal Trading Firms||24|
|Retail Finance Providers||4|
|Wealth Asset Management||2|
|Wealth Managers and Stockbrokers||5|
Please note, the figures provided refer to the information held, as at 14 January 2021, and will be subject to change as more information is received about the TPR firms
- The total number of notifications received from firms to use the temporary permissions regime broken down by passport being used.
The requested information can be viewed in the table below:
|Directive||Number of firms|
|Alternative Investment Fund Managers Directive||54|
|Banking Consolidation Directive||108|
|Markets in Financial Instruments Directive||390|
|Mortgage Credit Directive||2|
|Payment Services Directive||146|
|Second Electronic Money Directive||82|
|Solvency II Directive||182|
|UCITS IV Directive||46|
|UCITS Management Directive||5|
On 11 October 2019 Bovill sent the following Freedom of Information request to the FCA:
- The total number of notifications received from firms to use the temporary permissions regime
- The total number of notifications received from firms to use the temporary permissions regime broken down by the firm’s home state
- The total number of notifications received from firms to use the temporary permissions regime broken down by firm type (e.g. asset manager, wealth manager, broker, etc.)
- The total number of notifications received from firms to use the temporary permissions regime broken down by passport being used (e.g. MiFID services; MiFID branch; AIFMD Marketing; AIFMD management; etc.)
The answers were as follows:
|Advisers and intermediaries||254|
|Personal and Commercial Lines Insurers (incl. EEA insurers)||172|
|Payment Services Firm||135|
|Contracts for Difference Providers||111|
|Personal and Commercial Lines Insurance Intermediaries||77|
|Lloyds & London Market Intermediaries (incl. Managing General Agents)||62|
|Wealth Managers and Stockbrokers||50|
|Principal Trading Firms||39|
|Alternative Asset Manager (e.g. hedge fund / private equity manager)||34|
|Corporate Finance Firms||20|
|Lloyds Managing Agents & London Market (Re)Insurers (incl. P&I Clubs)||16|
|Custody Services and Administrators||8|
|Multilateral Trading Facility||8|
|Retail finance providers||5|
|Mainstream consumer credit lenders||3|
|Organised Trading Facility||3|
|Motor finance providers||2|
|Retail Mortgage Lenders||1|
|Directive||Branch||Services||Total||As % of total number of passports|