Don’t wait to apply for EU licence, ECB tells Brexit banks
Banks hoping to move operations from London to other EU states to avoid post-Brexit hurdles should move fast to apply for a licence, the European Central Bank said Tuesday.
Licence applications are dealt with on a first-come, first-served basis by the ECB and national central banks in the 19-country eurozone, and take between six months and the legal time limit of one year to complete.
“Plan accordingly, in order to be sure to obtain your licence on time,” the Frankfurt institution urged in a “frequently asked questions” document to accompany a Tuesday afternoon conference call with bank representatives.
British Prime Minister Theresa May launched two-year EU exit negotiations at the end of March — which could see London banks lose “passporting” right to sell services to clients on the Continent.
Many financial firms are now looking to cities in the eurozone, where setting up a European presence supervised by the ECB — or extending an existing one — will let them dodge the Brexit bullet.
Around 40 international banks already have a eurozone presence run from London, while others simply sell their services to European clients from the British financial hub.
But the ECB reiterates that it will not accept letterbox firms in Frankfurt, Paris or Dublin run by remote control from London.
“The requirements for a well-functioning bank must be in place before an institution takes up any banking activities in the euro area,” the document insists.
The ECB has invited bankers to a seminar to learn more about eurozone regulations on May 4.
Representatives from 25 banks attended a late January meeting on setting up shop in Frankfurt with Germany’s BaFin financial regulator.
Britain’s HSBC has already announced plans to move around 1,000 jobs from London to Paris, while Switzerland’s UBS will move a similar number.