Ireland can offer Brexit solutions

While there is little prospect of the City of London entering into terminal decline as a global finance hub following Brexit, there will certainly be some outflows of activity to other jurisdictions – and Ireland is set to benefit from this.

“The indications are that Ireland will be selected by a number of global fund managers and banks as the location of choice in which to establish operations outside the UK as a new hub within the EU, post-Brexit,” says Kerill O’Shaughnessy, investment funds partner at Walkers in Ireland.

“Decision-makers are citing factors such as the depth of Ireland’s highly-skilled and specialised financial services and investment-fund-servicing labour pool, Ireland’s position as a common-law and English-speaking jurisdiction with a clear commitment to providing the highest levels of service to international clients, as well as Ireland’s clear, robust regulatory framework and commitment to EU membership,” he adds.

The issue is really what Ireland has to offer UK-based asset or fund managers in a post-Brexit world, according to Kevin Murphy, co-head of the Arthur Cox asset management and investment funds group. “The concern that UK asset managers have is that they will not be able to continue to service their EU clients post Brexit,” he says. “The problem is compounded by the fact that we don’t know if there will be a soft or hard Brexit. Because it can take up to 12 months to establish a regulated firm in the EU, working back from the Brexit date of March 2019, UK managers need to decide now whether they will apply to establish a regulated firm in an EU country to allow them to continue it service their clients from March 2019.”

Managers have to plan for the worst in the event of a hard Brexit and hope for the best in the form of a soft Brexit. "What Ireland can offer those UK managers looking to establish a hub in the EU is a market-leading, English-speaking, asset-management-friendly jurisdiction that is committed to supporting the development of its funds industry," Murphy points out. "Clearly, many UK managers see that, given the number of them discussing their options with the Central Bank of Ireland. Based on feedback from a number of those managers, the Central Bank is to be commended in the way it has professionally and systematically considered applications, with many commenting on the considered approach of the Central Bank compared to a less informed approach taken by some other EU regulators."