London to remain financial services centre of Europe

22 February 2021 | UK & Europe | 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.

ENDS

For further information, please contact:

Polly Barton – Bovill

+44 (0)20 7620 8440

pbarton@bovill.com

Tabitha Adams – Luther Pendragon

+44 (0)7500 013062

bovill@luther.co.uk

About Bovill

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:

Reference: FOI7904

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.

1. 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.

2. 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
AUSTRIA	21
BELGIUM	85
BULGARIA	8
CROATIA	2
CYPRUS	151
CZECH REPUBLIC	18
DENMARK	23
ESTONIA	2
FINLAND	8
FRANCE	186
GERMANY	168
GREECE	15
HUNGARY	3
ICELAND	5
IRELAND	230
ITALY	45
LATVIA	6
LIECHTENSTEIN	26
LITHUANIA	43
LUXEMBOURG	101
MALTA	59
NETHERLANDS	106
NORWAY	32
POLAND	15
PORTUGAL	9
ROMANIA	2
SLOVAKIA	4
SLOVENIA	1
SPAIN	51
SWEDEN	51
Grand Total	1,476

 

3. 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
Alternatives	31
Asset Management	106
Asset Manager	18
Contracts for Differences (CFD) Providers	96
Corporate Finance Firms	4
Credit Unions	1
Custody Services	5
Custody Services and Administrators	5
Debt purchasers, debt collectors and debt administrators	1
E-Money Issuer	68
Life Insurance	24
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
Mortgage Intermediaries	1
Motor Finance Providers	1
Multilateral Trading Facilities and Organised Trading Facilities	5
Multilateral Trading Facility	3
Non-Bank Lenders	1
Organised Trading Facility	1
Payment Services Firm	176
Personal and Commercial Lines Insurance Intermediaries	316
Personal and Commercial Lines Insurers (inc EEA Insurers)	121
Platforms	3
Principal Trading Firms	24
Retail Bank	46
Retail Finance Providers	4
Wealth Asset Management	2
Wealth Management	29
Wealth Managers and Stockbrokers	5
Wholesale (Other)	18
Wholesale Bank	80
Wholesale Brokers	37
Grand Total	1,476

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

4. 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
Insurance Distribution	461
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
Grand Total	1,476

On 11 October 2019 Bovill sent the following Freedom of Information request to the FCA:

Reference: FOI6833

1. The total number of notifications received from firms to use the temporary permissions regime
2. The total number of notifications received from firms to use the temporary permissions regime broken down by the firm’s home state
3. 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.)
4. 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:

1. 1,441

Country	Number
IRELAND	228
FRANCE	170
CYPRUS	165
GERMANY	149
NETHERLANDS	131
LUXEMBOURG	106
MALTA	65
BELGIUM	62
LIECHTENSTEIN	51
SPAIN	45
ITALY	40
SWEDEN	35
NORWAY	32
DENMARK	27
LITHUANIA	25
AUSTRIA	22
CZECH	15
POLAND	13
GREECE	11
FINLAND	11
PORTUGAL	7
BULGARIA	7
ICELAND	5
LATVIA	5
HUNGARY	4
SLOVENIA	3
ESTONIA	2
SLOVAKIA	2
ROMANIA	2
CROATIA	1
Total	1441

 

Firm type	Number
Advisers and intermediaries	254
Personal and Commercial Lines Insurers (incl. EEA insurers)	172
Asset Manager	141
Payment Services Firm	135
Contracts for Difference Providers	111
Personal and Commercial Lines Insurance Intermediaries	77
Retail Bank	71
Wholesale Bank	63
Lloyds & London Market Intermediaries (incl. Managing General Agents)	62
Wholesale Brokers	52
Wealth Managers and Stockbrokers	50
E-money Issuer	47
Life Insurance	45
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
Other	9
Custody Services and Administrators	8
Multilateral Trading Facility	8
Credit brokers	7
Platforms	5
Retail finance providers	5
Mainstream consumer credit lenders	3
Organised Trading Facility	3
Motor finance providers	2
Non-Bank Lenders	1
Retail Mortgage Lenders	1
Total	1441

 

Directive	Branch	Services	Total	As % of total number of passports
AIFMD	24	52	76	61
PSD	11	112	123	53
SEMD	3	55	58	51
UCITS	15	46	61	49
MiFID	81	486	567	43
IDD	92	368	460	10
MCD		1	1	10
Total			1346