BREXIT - Is This Really Still Rumbling On? 😴

elbowloh

It's good to see we're making the most of the post-brexit trade utopia.

kingstongraham

elbowloh said:

It's good to see we're making the most of the post-brexit trade utopia.

Yes, keeping the Norwegians from stealing our fish.

rick_chasey

No equivalence for FS is a bit of a blow and will facilitate a decline.

kingstongraham

rick_chasey said:

No equivalence for FS is a bit of a blow and will facilitate a decline.

I don't really understand what it means - it's not going to get political traction, just (I assume) have the massively bigger effect. Fishing boats, I understand.

TheBigBean

kingstongraham said:

rick_chasey said:

No equivalence for FS is a bit of a blow and will facilitate a decline.

I don't really understand what it means - it's not going to get political traction, just (I assume) have the massively bigger effect. Fishing boats, I understand.

Here's a table. Imagine each yellow bit is a fish. Currently China gets more fish than the UK.

https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/overview-table-equivalence-decisions_en.pdf

rick_chasey

kingstongraham said:

rick_chasey said:

No equivalence for FS is a bit of a blow and will facilitate a decline.

I don't really understand what it means - it's not going to get political traction, just (I assume) have the massively bigger effect. Fishing boats, I understand.

It basically means some financial services for EU customers are now unavailable in UK due to regulatory differences and visa versa.

So, for example, if you are a UK fund manager you can only offer your fund management services to an EU based client, you must open an office and have a person of "regulatory importance" working in it.

The idea the UK had was that given currently a lot of EU27 clients do their business in London/UK, the EU would want to maintain that convenience and so agree for that to continue to happen as long as the regulation was basically the same on both sides, to avoid undercutting. That's regulatory equivalence.

The noises coming out of the BoE and the EU suggest that they have given up searching for equivalence as the EU is not willing to grant it (as it is prioritising FS 'sovereignty' over economic efficiency) and so the BoE might as well find ways to be more 'competitive' - ie. undercutting the EU.

TheBigBean

That's not completely true. A uk fund manager can provide its services to anyone who asks. What it can't do is market its fund in the EU.

rick_chasey

TheBigBean said:

That's not completely true. A uk fund manager can provide its services to anyone who asks. What it can't do is market its fund in the EU.

Not new clients no.

TheBigBean

rick_chasey said:

TheBigBean said:

That's not completely true. A uk fund manager can provide its services to anyone who asks. What it can't do is market its fund in the EU.

Not new clients no.

New clients who approach via "reverse enquiry" can.

rick_chasey

TheBigBean said:

rick_chasey said:

TheBigBean said:

That's not completely true. A uk fund manager can provide its services to anyone who asks. What it can't do is market its fund in the EU.

Not new clients no.

New clients who approach via "reverse enquiry" can.

Not if they're UCITS or retail funds or master/feeder funds. They're more relaxed on alternatives.

But how is a new entrant going to get any clients if they can't market it?

It is practically the same. I have now spoken to 4 UK firms who have cancelled growth plans in Europe and another 3 who have relocated half their salesforce (a small salesforce) to the continent.

TheBigBean

rick_chasey said:

TheBigBean said:

rick_chasey said:

TheBigBean said:

That's not completely true. A uk fund manager can provide its services to anyone who asks. What it can't do is market its fund in the EU.

Not new clients no.

New clients who approach via "reverse enquiry" can.

Not if they're UCITS or retail funds or master/feeder funds. They're more relaxed on alternatives.

But how is a new entrant going to get any clients if they can't market it?

It is practically the same. I have now spoken to 4 UK firms who have cancelled growth plans in Europe and another 3 who have relocated half their salesforce (a small salesforce) to the continent.

It works both ways, how are you going to invest money if no one is letting you know of opportunities in the UK? My suspicion is that some investors will create a UK entity solely to receive marketing.

rick_chasey

TheBigBean said:

rick_chasey said:

TheBigBean said:

rick_chasey said:

TheBigBean said:

That's not completely true. A uk fund manager can provide its services to anyone who asks. What it can't do is market its fund in the EU.

Not new clients no.

New clients who approach via "reverse enquiry" can.

Not if they're UCITS or retail funds or master/feeder funds. They're more relaxed on alternatives.

But how is a new entrant going to get any clients if they can't market it?

It is practically the same. I have now spoken to 4 UK firms who have cancelled growth plans in Europe and another 3 who have relocated half their salesforce (a small salesforce) to the continent.

It works both ways, how are you going to invest money if no one is letting you know of opportunities in the UK? My suspicion is that some investors will create a UK entity solely to receive marketing.

I said it works both ways.

You can't just create an entity - you need to have someone of "regulatory significant" in the location. For a small business that's expensive.

The problem for the City is EU client base > UK client base.

TheBigBean

rick_chasey said:

TheBigBean said:

rick_chasey said:

TheBigBean said:

rick_chasey said:

TheBigBean said:

That's not completely true. A uk fund manager can provide its services to anyone who asks. What it can't do is market its fund in the EU.

Not new clients no.

New clients who approach via "reverse enquiry" can.

Not if they're UCITS or retail funds or master/feeder funds. They're more relaxed on alternatives.

But how is a new entrant going to get any clients if they can't market it?

It is practically the same. I have now spoken to 4 UK firms who have cancelled growth plans in Europe and another 3 who have relocated half their salesforce (a small salesforce) to the continent.

It works both ways, how are you going to invest money if no one is letting you know of opportunities in the UK? My suspicion is that some investors will create a UK entity solely to receive marketing.

I said it works both ways.

You can't just create an entity - you need to have someone of "regulatory significant" in the location. For a small business that's expensive.

The problem for the City is EU client base > UK client base.

You didn't read what I wrote. Create a UK entity not an EU one. Yes, the new UK entity would need to be allowed to receive marketing under FCA, but at the moment, it can rely on equivalence.

rick_chasey

TheBigBean said:

rick_chasey said:

TheBigBean said:

rick_chasey said:

TheBigBean said:

rick_chasey said:

TheBigBean said:

That's not completely true. A uk fund manager can provide its services to anyone who asks. What it can't do is market its fund in the EU.

Not new clients no.

New clients who approach via "reverse enquiry" can.

Not if they're UCITS or retail funds or master/feeder funds. They're more relaxed on alternatives.

But how is a new entrant going to get any clients if they can't market it?

It is practically the same. I have now spoken to 4 UK firms who have cancelled growth plans in Europe and another 3 who have relocated half their salesforce (a small salesforce) to the continent.

It works both ways, how are you going to invest money if no one is letting you know of opportunities in the UK? My suspicion is that some investors will create a UK entity solely to receive marketing.

I said it works both ways.

You can't just create an entity - you need to have someone of "regulatory significant" in the location. For a small business that's expensive.

The problem for the City is EU client base > UK client base.

You didn't read what I wrote. Create a UK entity not an EU one. Yes, the new UK entity would need to be allowed to receive marketing under FCA, but at the moment, it can rely on equivalence.

I did - it needs to be more that a plaque on a wall somewhere .They have to have someone on the ground.

Anyway, why would an investor bother with setting up things to receive marketing when they can be more conveniently served by a bigger international business or a local business?

You should recognise while there are ways around the problems, they increase friction and reduce trade between the two areas.

TheBigBean

rick_chasey said:

TheBigBean said:

rick_chasey said:

TheBigBean said:

rick_chasey said:

TheBigBean said:

rick_chasey said:

TheBigBean said:

That's not completely true. A uk fund manager can provide its services to anyone who asks. What it can't do is market its fund in the EU.

Not new clients no.

New clients who approach via "reverse enquiry" can.

Not if they're UCITS or retail funds or master/feeder funds. They're more relaxed on alternatives.

But how is a new entrant going to get any clients if they can't market it?

It is practically the same. I have now spoken to 4 UK firms who have cancelled growth plans in Europe and another 3 who have relocated half their salesforce (a small salesforce) to the continent.

It works both ways, how are you going to invest money if no one is letting you know of opportunities in the UK? My suspicion is that some investors will create a UK entity solely to receive marketing.

I said it works both ways.

You can't just create an entity - you need to have someone of "regulatory significant" in the location. For a small business that's expensive.

The problem for the City is EU client base > UK client base.

You didn't read what I wrote. Create a UK entity not an EU one. Yes, the new UK entity would need to be allowed to receive marketing under FCA, but at the moment, it can rely on equivalence.

I did - it needs to be more that a plaque on a wall somewhere .They have to have someone on the ground.

Anyway, why would an investor bother with setting up things to receive marketing when they can be more conveniently served by a bigger international business or a local business?

You should recognise while there are ways around the problems, they increase friction and reduce trade between the two areas.

You are basing this on chat to various people not on actual research. Being regulated in the EU is a matter for each national body, so you would need to check with every country. For example, you could be regulated in Lithuania with little more than brass plaque. Do you think every Luxembourg based fund employs people, because I'm not sure there would be enough people if they needed to?

Of course, the bigger countries are asking for some local hires.

But that is regulation in the EU, I was talking about creating an entity in the UK. Whether that company qualifies as a professional investor is a matter for the FCA and not the EU. Then to repeat, the reason someone would do this would be to ensure they have access to all opportunities.

Of course it increases friction, but that is the EU's choice.

rick_chasey

I’ll take the “talking to people who do this for a living isn’t research” on the chin, (not least as I manage to charge for said research but anyway) but I don’t think you are disagreeing with me.

The EU is absolutely choosing to have more friction. Hence my “the EU is prioritising sovereignty over efficiency”

I know you are talking about creating entities in the UK but a) the FCA is not a fan of that for lots of reasons - maybe that will change but b) the point still remains most continental based clients won’t bother. It’s hardly adding to the competitiveness of small UK boutiques.

(I also should add I only offered it as an example I am familiar with - the world of FS is bigger than this)

There are ways around all of this, I’m not suggesting it’s shut off, but it will facilitate a gradual decline of the City.

I did a study on hiring trends since brexit and, above a certain level the radio has swung significantly away from London versus what it was. That may stabilise once the changes slow down.

But you surely must agree the whole process of Brexit is bad for the City? Regardless of who you want to blame for it.

And the current developments where the EU are taking the opportunity (given to them by the UK choice to leave the SM) to prioritise sovereignty and their own services over efficiency are a worse outcome for the City?

TheBigBean

It's unlikely to be a win for the City, but I suspect it won't be a win for the EU either.

You talk to compliance advisors for a living?

rick_chasey

TheBigBean said:

It's unlikely to be a win for the City, but I suspect it won't be a win for the EU either.

You talk to compliance advisors for a living?

Heads of distribution / sales.

Funnily enough they know a bit about selling this stuff

pblakeney

TheBigBean said:

It's unlikely to be a win for the City, but I suspect it won't be a win for the EU either.

You talk to compliance advisors for a living?

I simply cannot comprehend the point scoring.
If it is bad for us then it is bad regardless of it being worse for the EU.

TheBigBean

pblakeney said:

TheBigBean said:

It's unlikely to be a win for the City, but I suspect it won't be a win for the EU either.

You talk to compliance advisors for a living?

I simply cannot comprehend the point scoring.
If it is bad for us then it is bad regardless of it being worse for the EU.

Yes, Europe loses. Rest of the world wins a bit.

surrey_commuter

TheBigBean said:

pblakeney said:

TheBigBean said:

It's unlikely to be a win for the City, but I suspect it won't be a win for the EU either.

You talk to compliance advisors for a living?

I simply cannot comprehend the point scoring.
If it is bad for us then it is bad regardless of it being worse for the EU.

Yes, Europe loses. Rest of the world wins a bit.

I think he meant that he could not understand why people aren’t just assessing the outcome purely from a UK point of view

TheBigBean

surrey_commuter said:

TheBigBean said:

pblakeney said:

TheBigBean said:

It's unlikely to be a win for the City, but I suspect it won't be a win for the EU either.

You talk to compliance advisors for a living?

I simply cannot comprehend the point scoring.
If it is bad for us then it is bad regardless of it being worse for the EU.

Yes, Europe loses. Rest of the world wins a bit.

I think he meant that he could not understand why people aren’t just assessing the outcome purely from a UK point of view

It is not a UK decision, so there is another relevant party to be discussed.

morstar

It’s interesting that most noise and complaints about Brexit are coming from demographics that supported it.
I.e. NI and fishing are the two recent ones.
Us remoaners have carried on disappointed at leaving but accepting the outcome.
Those who fully bought into cake and eat it seem to be having trouble accepting compromise was always required.

Zero sympathy for Arlene but it’s a toxic state of affairs over there right now.
You have to appease those who were let down by promising things you cannot hope to deliver.

As for fishing, mackerel and chips it is.

pblakeney

TheBigBean said:

surrey_commuter said:

TheBigBean said:

pblakeney said:

TheBigBean said:

It's unlikely to be a win for the City, but I suspect it won't be a win for the EU either.

You talk to compliance advisors for a living?

I simply cannot comprehend the point scoring.
If it is bad for us then it is bad regardless of it being worse for the EU.

Yes, Europe loses. Rest of the world wins a bit.

I think he meant that he could not understand why people aren’t just assessing the outcome purely from a UK point of view

It is not a UK decision, so there is another relevant party to be discussed.

Neatly ignoring the elephant in the room.

TheBigBean

I do think that if the EU raised an army and rode into Northern Ireland on elephants pillaging and burning along the way that there would be someone on the internet saying "but the UK did vote for Brexit, so really it's the UK's fault". This would be followed by someone noting that it may not be right, but they did warn that this would happen prior the vote, so the UK only has itself to blame.

tailwindhome

TheBigBean said:

I do think that if the EU raised an army and rode into Northern Ireland on elephants pillaging and burning along the way that there would be someone on the internet saying "but the UK did vote for Brexit, so really it's the UK's fault". This would be followed by someone noting that it may not be right, but they did warn that this would happen prior the vote, so the UK only has itself to blame.

Others would shrug and say 'so? I don't live there'

pblakeney

TheBigBean said:

I do think that if the EU raised an army and rode into Northern Ireland on elephants pillaging and burning along the way that there would be someone on the internet saying "but the UK did vote for Brexit, so really it's the UK's fault". This would be followed by someone noting that it may not be right, but they did warn that this would happen prior the vote, so the UK only has itself to blame.

But nobody warned about an elephant army. They did warn about fishing, FS and N.I. amongst others. We knew this was coming. Some thought it was a price worth paying.

morstar

TheBigBean said:

I do think that if the EU raised an army and rode into Northern Ireland on elephants pillaging and burning along the way that there would be someone on the internet saying "but the UK did vote for Brexit, so really it's the UK's fault". This would be followed by someone noting that it may not be right, but they did warn that this would happen prior the vote, so the UK only has itself to blame.

The UK government promised an impossible no border anywhere solution to NI.
People bought into the idea as it was what they wanted to hear. Many people pointed out the fallacy.
Both sides committed to no land border, only one side had an issue with a sea border and rather than be honest about it, they said what people wanted to hear.

rick_chasey

TheBigBean said:

surrey_commuter said:

TheBigBean said:

pblakeney said:

TheBigBean said:

It's unlikely to be a win for the City, but I suspect it won't be a win for the EU either.

You talk to compliance advisors for a living?

I simply cannot comprehend the point scoring.
If it is bad for us then it is bad regardless of it being worse for the EU.

Yes, Europe loses. Rest of the world wins a bit.

I think he meant that he could not understand why people aren’t just assessing the outcome purely from a UK point of view

It is not a UK decision, so there is another relevant party to be discussed.

Do indulge me when I say wasn’t Brexit about taking back control?

TheBigBean

rick_chasey said:

TheBigBean said:

surrey_commuter said:

TheBigBean said:

pblakeney said:

TheBigBean said:

It's unlikely to be a win for the City, but I suspect it won't be a win for the EU either.

You talk to compliance advisors for a living?

I simply cannot comprehend the point scoring.
If it is bad for us then it is bad regardless of it being worse for the EU.

Yes, Europe loses. Rest of the world wins a bit.

I think he meant that he could not understand why people aren’t just assessing the outcome purely from a UK point of view

It is not a UK decision, so there is another relevant party to be discussed.

Do indulge me when I say wasn’t Brexit about taking back control?

I think that was control of the UK not control of the EU, and as this whole discussion started with the possibility of the UK removing some regulation it all appears consistent.