As financial institutions brace for the looming Brexit next year, the effects are being felt across various financial markets and industries.
T Rowe Price, the asset management firm that current has roughly $1 trillion in assets under management, has initiated a contingency plan to depart from London ahead of the UK’s disconnect from the eurozone.
Financial Services Access Remain Issue
T Rowe Price’s plans are yet another indication of the strong financial tide that is shifting away from the UK, along with the massive amounts of capital and funds that will depart the nation as well.
As Brexit negotiations continue to intensify, more information has been provided that has guided companies’ decisions, as well as better informed them of possible outcomes when the time comes for Brexit to officially commence.
The main challenge facing many companies and financial institutions is the recent insistence by European countries to disallow the free access to financial services for UK establishments.
This is a key factor in the negotiations, which major European financial hubs, including Germany, have claimed would jeopardize the stability of the economic spectrum for the region.
The long standing disagreements that have overwhelmed the subject since the Brexit vote took place, have cleared the path for an abundance of unclarity for many impacted firms.
Robert Higginbotham, head of global investment services at T Rowe Price, said: “We took a decision last year that we needed to get started on this now if we were going to be ready in time.”
Mr. Higginbotham continued: “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.”
In response to the impending Brexit, T Rowe Price has filed an application at Luxembourg’s financial regulatory body, the Commission De Surveillance Du Secteur Financier. The asset management firm intends to officially separate its UK operations from those of the EU, in order to not be restricted in its access to European markets.
T Rowe Price currently has operations in the following European countries: Amsterdam, Copenhagen, Frankfurt, Madrid, Milan, Zurich, and Stockholm.
While the move to Luxembourg will represent an important change in functionality and some operations modifications as well, the company insists that UK jobs will not be impacted as a result, adding that the Luxembourg base will only include the addition of a few new positions.