France is negotiating with 30-50 asset managers who are considering setting up new outposts in Paris so that they can retain access to the European Union once Britain leaves, the ambassador for the French asset management lobbying group told Reuters.
Britain’s vote last June to leave the EU has sparked fierce competition among financial centers elsewhere in the bloc, including Paris, Frankfurt, Dublin and Luxembourg, to attract banks and other financial companies.
Currently, EU rules allow a fund manager in London to sell and manage funds across the bloc, but it is unclear whether that will continue to the same extent after Brexit as the shape of future UK-EU trading relations has yet to be hammered out.
Overall, asset managers in London may have to move between 5,000 and 10,000 jobs to various cities on the continent, Jean-Louis Laurens, International Ambassador for French Asset Management Association (AFG) told Reuters in an interview in London.
Paris has stepped up its attempts to win business from financial firms currently based in Britain since the election of Emmanuel Macron as French president last month. Macron has vowed to overhaul the labor market and simplify the French tax and pension systems.
“I have never seen so much alignment in the government to make France attractive as a financial center,” said Laurens, who also worked at Rothschild at the same time as former investment banker Macron.
“The number one issue is labor laws, but that will be addressed by the new government.”
The French regulator for the funds industry, AMF (Autorite des marches financiers) had a call with 53 senior executives from U.S. and UK asset managers on May 12 to discuss the process of setting up entities and ways to help, said Laurens.
“There is a realization from the UK and U.S. firms that the Brexit negotiations will be so constrained that they might not have access to the single market. This means that companies will need to devise a plan, ” he said.
The AMF is also offering fund firms a fast track approval process of two weeks for regulatory licenses, said Laurens, which compares with two months in countries such as Ireland and Luxembourg which are also vying for asset managers, he said.
Britain’s markets watchdog said on May 31 it had asked asset managers and investment firms to spell out how Brexit would affect their ability to continue serving EU customers and whether they needed to move to the bloc.
So far though, there is little sign of a rush to Paris among the first fund managers to set out their Brexit plans.
Legal & General (LGEN.L) has said it would move some of its investment management operations to Ireland, while fund manager M&G (PRU.L) is to set up a management company in Luxembourg.
Source: Reuters
