With just over a year to go until the UK leaves the EU, the UK’s £8tn fund management industry has emerged as one of the most vulnerable sectors amid a lack of clarity over the transition. Discussions among asset management bosses over whether to bulk up European offices were given fresh impetus this month when the European Commission gave a stark warning that UK-based fund companies could be shut out of selling products into the EU from April next year.
“We took a decision last year that we needed to get started on this now if we were going to be ready in time,” said Robert Higginbotham, head of global investment services at T Rowe Price.
“All this is based on what we know about Brexit at the moment — which will probably be about 25 per cent of what we know in a year’s time. We have been working on this for a year and will have to get it complete by the end of the year.”
Two weeks ago T Rowe Price applied to the Commission De Surveillance Du Secteur Financier, Luxembourg’s financial regulator, to separate its UK and Luxembourg operations. The UK entity will continue to serve the domestic market, but the Luxembourg company will become the new head office for its EU business.
Mr Higginbotham said he expected the new Luxembourg entity to be set up by the summer and that all other EU offices would be reporting to it by the end of the year. The move will not affect jobs in the UK and will result in only a handful of new roles in Luxembourg, but it will represent a significant switch in influence for the company.
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