Close EU Scrutiny of Brexit Hubs to Continue Indefinitely, Says Regulator

Close scrutiny of UK financial firms’ European Union outposts will continue indefinitely, the bloc’s securities watchdog said, as regulators begin a round of new checks on how they are operating, Reuters reported. Hundreds of trading and investment firms from the City of London have set up shop in the EU to avoid disrupting business with the bloc by relocating staff and assets. The costly investment was vindicated by an UK-EU trade deal that left UK financial services largely cut off from the continent after Britain left the EU’s orbit on Dec. 31. The European Securities and Markets Authority (ESMA) had checked the licence applications from new hubs in case national regulators were offering sweeteners. ESMA Chair Steven Maijoor said the watchdog has now begun reviewing how the licences are working on the ground in a process that will continue indefinitely to ensure sufficient activity and senior staff. “How you structure your business between the UK and the EU, that will be an ongoing issue. There will be new business models, there will be new questions around how can you organise that,” Maijoor told Reuters. Read more.

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