U.K. financial firms move 400 job to Europe late in Q3, ahead of Brexit
U.K. financial services firms announced more than 400 job relocations to Europe in the final weeks of the quarter ended Sept. 30, ahead of the end to the Brexit transition period.
Analysis by Ernst & Young showed that the total number of positions leaving the U.K. since the European Union referendum in June 2016 is now more than 7,500.
Financial services firms also added or are in the process of hiring more than 2,850 new recruits in Europe since the Brexit vote, with more than 400 new roles added this year. The tracker monitors 222 firms. Since 2016, 88 of these firms have confirmed at least one location in Europe where they are moving or thinking about moving or adding staff and/or operations. Of these firms, 26 have confirmed multiple locations for such moves.
The main locations for these new jobs include Dublin, Frankfurt, Luxembourg and Paris. However, Dublin is the most popular destination for relocations and new offices, with 34 firms considering or confirming it as their city of choice.
“With the prospect of a deal between the U.K. and EU still hanging in the balance, many firms still remain in a ‘wait and see’ mode,” said Omar Ali, U.K. financial services managing partner, in a news release accompanying the data. “The pretrade agreement, set to be finalized at the end of October, means we could yet see a flurry of further staff and operational announcements in the weeks that follow.”
However, the second spike in COVID-19 infections could derail cross-border movement in the coming months, Mr. Ali warned.
A total of 24 firms have publicly said they will transfer assets out of the U.K. and into the EU, although they have not all disclosed the value of assets. However, EY’s Financial Services Brexit Tracker recorded asset transfers worth more than £1.2 trillion ($1.55 trillion), up from £1 trillion as of year-end 2019.
The Brexit transition period for firms to adjust to life outside of the EU ends this year.
The tracker covers announcements made by money managers, private equity firms, insurance companies and other financial services businesses.
Also Thursday, the Financial Conduct Authority published an updated version of its rules to show which will apply at the end of the Brexit transition period. It also published details on how it intends to use its “temporary transitional power,” which gives the U.K. regulator flexibility on how and when changes to its rules apply following the end of the transition period. Where the TTP applies, firms can continue to comply with existing requirements for a limited period of time.
The FCA said there are areas where the FCA expects firms to be preparing to comply with changes in obligations starting Dec. 31, including transaction reporting under the Markets in Financial Instruments Directive II.
The FCA said in a news release that it expects firms to use the temporary transitional power period, which runs until March 31, 2022, to prepare for full compliance with regulatory changes.