Data taken from a poll of around 100 senior management representatives from global financial services firms with business interests and/or a presence in the UK market, in April 2021.
- Forty-one per cent of financial services firms polled plan to expand their UK business, up from 28% in January
- Although 53% believe that their UK presence will not change post Brexit, down from 60% in January
- And just 6% plan to reduce their presence in the UK market, down from 12% in January
- In terms of necessary staff moves to the EU, over a quarter (26%) of respondents claimed their firm is still to relocate ‘a few’ roles, while the majority (73%) of respondents said their firm has no further EU staff relocation plans
- Almost two thirds of respondents (61%) believe that the EU will grant limited equivalence determinations in the ongoing post-Brexit talks – down from 76% in January – but just 10% expect a temporary MiFIR Article 47 determination
- A growing minority (30% up from 15% in January) do not believe there will be any further equivalence determinations granted by the EU
- With a Brexit deal now done, 70% of firms polled said they are conducting strategic reviews of their European business
- The most common concern, stated by 44% of respondents, is how to manage dual EU and UK financial regulations, yet 19% said the rising costs of doing business was their top concern
John Liver, UK Financial Services Partner at EY, comments:
“Within the financial services sector, although the trading environment has not yet moved materially since the Brexit deal, sentiment clearly has. Having successfully navigated the end of the transition period, the industry is now forming a more stable view of the future EU / UK relationship, and there is increasing, but by no means universal, acceptance that key equivalence determinations are unlikely in the short term. Against this backdrop, firms are now undertaking strategic reviews of their business, as they consider their operating model, market presence and cost base.
“Looking to the future, the UK must ensure it clearly promotes its openness to international business. A large part of this will be demonstrating that it offers a supportive environment for growth and expansion with access to top talent. Two major elements to this will be a strong and capable regulatory framework that is alive to industry transformation and a progressive tax regime. Articulated well, this will demonstrate that the UK remains a top destination for financial services.”