Central Bank launches dedicated webpage to help ‘wave’ of financial services applications
Regulator warns London companies must have substance to seek authorisation
The Central Bank has set up a dedicated webpage to facilitate firms interested in seeking authorisation in Ireland. Photograph: Matt Kavanagh
The Central Bank has set up a dedicated webpage to facilitate firms interested in seeking authorisation in Ireland, amid growing expectations that a large number of London based financial firms will relocate if and when the UK exits the single market.
Speaking in Hong Kong on Tuesday, Minister of State Eoghan Murphy said he expects a “wave” of UK-based financial services companies to announce full or partial relocations to Ireland by mid-2017.
Firms seeking authorisation in Ireland will find the Central Bank to be “engaged, efficient, open and rigorous”, Gerry Cross, director of policy and risk at the regulator said, in a speech published on Tuesday, but he reiterated the bank’s view that prospective authorisations must have “a substantive presence here”.
“ This is very important. Businesses that are authorised here must be run from here,” Mr Cross said, adding that while outsourcing (and insourcing) are permitted, it may not be done to the extent that it is effectively “hollowing out” an important part of the regulated activity.
“Proper business models, with convincing risk identification and management, suitable products, sound finances, and strong boards and executives, can be expected to be approved, whether or not such business models already exist in Ireland,” Mr Cross said.
In relation to the funds industry, Mr Cross noted queries from industry as to how the proposed exit of the UK from the EU would affect the bank’s approach to the effective supervision requirement. In response, Mr Cross said that if/when the UK leaves the EEA as a result of Brexit, it will reassess the situation then.
“It is impossible to know for certain at this stage what the outcome of the UK / EU negotiations will be. However, it is clear that many of the factors relevant to effective supervision seem likely to continue to apply given their nature.”