France’s financial regulators are offering to “simplify and speed up” the licensing process for British firms looking to move to France in the wake of the Brexit vote.
Autorité de contrôle prudentiel et de résolution (ACPR), which monitors banks and insurers, and the Autorité des marchés financiers (AMF), which safeguards investments and the stock market, issued a joint statement on Wednesday saying they are “getting ready to welcome British-based institutions that wish to locate their business in France.”
The regulators flag the risk of British institutions losing passporting rights if there’s a “hard Brexit” and suggest they should set up a French business to guard against this risk.
The joint statement says:
“For existing activities that are already supervised by the competent authority in the home country, the licensing procedure may be simplified and speeded up. This will be done by using documents already available in English such as forms that have been submitted to the supervisory authorities in the home country and papers concerning a branch whose business will be taken over by the subsidiary firm.”
Companies will also get an English-speaking contact point who can hold the firms’ hands throughout the licensing process. The new fast track is open to insurance companies, investment firms, payment institution, or electronic money institutions, but not credit providers.
It’s looking increasingly unlikely that Britain will retain its passporting rights after it officially leaves the European Union. Leading Brexiteers such as Boris Johnson are pushing for a so-called “hard Brexit” that would see Britain cut all formal ties with the EU and reclaim control over immigration. Top EU officials say they also won’t negotiate a special deal with the City of London if this happens.
Passporting rights are vital for London’s success as an international finance hub. Under EU rules, companies licensed in Britain are free to “passport” that licence across the EU and operate in all member states. The UK regulator, the FCA, recently said that 5,500 UK firms benefit from passporting rights, with a combined turnover of £9 billion.
Alongside the regulation fast track for British firms, the AMF is also setting up an even faster process to lure fintech — financial technology — and management firms from London. Its “2WeekTicket” pre-authorisation procedure allows firms to begin the process of opening offices in France in just two weeks. This could also threaten Britain’s booming fintech scene.
France and its government have been lobbying hard to both lure and force British finance firms to relocate since the Brexit vote on June 23. France’s Prime Minister Manuel Valls pledged to make its tax regime for expatriates the most favourable in Europe shortly after the vote, while President Francois Hollande has said that London should not be allowed to continue its lucrative trade in euro clearing after Britain officially leaves the EU.
France is the number one pick for UK companies considering relocating in the wake of Brexit, according to a recent survey by CIPD and recruiter Adecco.
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