Central Bank warns UK
The Central Bank has pressed UK investment funds selling into Ireland not to market products here or in the rest of the EU after Brexit, warning they could be breaking the law by doing so.
The regulator has written to 53 UK mutual funds, known as UCITS, warning them they will lose the right to sell access to their funds in Ireland and the EU after the UK becomes a so-called third country outside the bloc.
The Central Bank also forewarned them that it’s a criminal offence for an unauthorised firm to provide financial services in Ireland, and asked for details of any Irish investors in relevant funds by April 12.
Europe is seeking to ensure that it will continue to have oversight of asset managers, and regulators have warned that “letterbox entities,” nominally based in Europe but managed from abroad, will not be tolerated.
The financial regulator, here, has consistently said so-called brass-plate operations aren’t welcome.
Firms authorised in Ireland must be run from there, the regulator insists.
The 53 funds had all previously informed the Central Bank it intended to market its units to Irish investors under EU rules, the regulator said.
The letter informed the funds they “will lose their right to market units in other member states of the EU including Ireland” when the UK exits the bloc.
Meanwhile, the London Stock Exchange — via its Turquoise trading platform — is pressing ahead with plans to shift trading of European stocks to its newly minted Amsterdam operation as Brexit negotiations go down to the wire.
If the UK leaves the EU without a deal on April 12, European shares will trade in Amsterdam, Turquoise said.
Meanwhile, UK, Swiss, and US shares will remain in London.
But in a twist, the LSE said it would re-introduce European shares to its London exchange later this year without giving any further detail.
Negotiations on whether the UK’s rules are equivalent to the EU are ongoing. Because of that, exchanges have established non-UK EU-based venues to ensure continued cross-border services between the EU and UK.
Currency and equity markets are leaving London in preparation for Brexit.
CME Group said it will move its foreign-exchange forwards and swaps venue, which has trading volumes of about €13.3bn a day, from London to Amsterdam.
