Fall in authorisation applications to Central Bank after Brexit planning peak

The Central Bank saw a fall in applications from firms seeking authorisation in the second half of last year as many of the companies seeking to move activities to Ireland as a result of Brexit had completed their planning before the UK was originally scheduled to leave the EU last March.

The regulator said that it processed two insurance applications in the second half of 2019, down from 11 for the first six months of the year, according to its latest half-yearly regulatory service standards performance report, published on Tuesday.

Applications from investment firms under Markets in Financial Instruments Directive (MiFID) rules fell to eight from 22, while submissions from companies seeking to have senior executives approved under the Central Bank’s fitness and probity regime declined to 596 from 1,137, the report said.

Applications

The first-half report had highlighted that fitness and probity applications had jumped almost 300 per cent on the first half of 2018 and was driven by Brexit.

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The Central Bank received one application from a bank seeking authorisation in the second half of last year, compared to zero submissions during the first six months.

Investment firms, including an arm of Wall Street giant Morgan Stanley, US investment group Legg Mason, as well as UK-headquartered companies including Aberdeen Standard Investments and Baillie Gifford, have also decided to make Dublin their EU base.

Such companies are said to make up the bulk of more than 100 Brexit-related applications for authorisation that the regulator has received in recent years.

UK banking giant Barclays and Bank of America Merrill Lynch have been shifting the most banking assets to Ireland, as Dublin becomes their post-Brexit EU hubs, while insurers such as XL Insurance, Beazley and Bupa have secured approval to set up centres here to retain access to the single market as a result of the UK leaving the union.

Activities

IDA Ireland chief executive Martin Shanahan told The Irish Times in an interview at Davos in Switzerland last month that companies who needed authorisation in Ireland or elsewhere in the EU because of "an existential threat to their business" as a result of Brexit have made their decisions on shifting activities.

He said that the IDA will now start to work with companies that have set up in Ireland for the first time “to try to build out their investment”.

“I think we’re probably now in a period where companies will take stock,” he said, adding that firms may take additional decisions in the third quarter of this year as the outcome of UK-EU trade talks become more apparent.