Revolut has jettisoned plans to set up a European wealth and trading hub in Dublin after securing authorisation in Lithuania to provide investment services across the European Economic Area (EEA), according to sources.
The UK fintech had built up a wealth and trading team of about 10 people in Dublin over the past 18 months, hiring Johnny Lynch, former head of private clients at Cantor Fitzgerald Ireland, as chief executive of the division in Ireland in the middle of last year.
The plan to provide investment services from the Republic was dependent on receiving authorisation from the Central Bank under the so-called Markets in Financial Instruments Directive (MiFID). Revolut told clients last December it was in the process of applying for this in order to continue to be able to market trading services to EU customers post-Brexit.
Industry sources say that Revolut decided to pursue an alternative route of securing authorisation in Lithuania, as interaction with Central Bank dragged on. The fintech, which was founded in 2015, already has a banking licence in the Baltic nation.
The financial market supervision committee of the Bank of Lithuania granted Revolut a MiFID licence last week. Separately, Revolut is continuing to seek authorisation as an e-money institution in Ireland, having submitted an application early last year.
“Our primary goal after Brexit was to ensure our EEA-based customers could continue to use our trading services without disruption. As we have both a bank and a payments firm in Lithuania which, between them, service all our EEA-based customers, it was a natural progression to apply for a MiFID authorisation on behalf of Revolut Securities UAB to complement those activities,” a spokesman for the group said.
“We engaged with the Central Bank of Ireland over the potential authorisation as a MiFID investment firm in Ireland but concluded that we will be able to serve all EEA customers on a single licence and therefore decided to proceed only with the Lithuanian authorisation.”
Employees and clients
Most of the team that had been involved in the Irish wealth and trading project are taking on other roles in the company. Revolut currently has almost 100 employees and about 1.5 million customers in the Republic.
A spokeswoman for the Central Bank said that it approaches authorisation applications “from firms across all financial sectors in an open, engaged and constructive manner”.
“Through this, we ensure that only firms that meet the standards required by European and domestic legislation, and the Central Bank’s own rules, can provide financial products and services to consumers and investors,” she said. “This statutory ‘gatekeeper’ role is critically important in ensuring we safeguard financial stability and protect consumers.”
She declined to comment on the Revolut MiFID process.
Irish and other EU customers of Revolut who had been using its UK-authorised zero-commission trading platform to buy and sell US stocks before Brexit have been able to continue to do so at their own initiative, subject to taking certain steps. However, the UK unit has not been allowed to advertise or promote its trading service in the EU since the end of last year.