LONDON (Reuters) - France’s financial markets regulator said on Thursday it had written to British-based investment firms active in the country and French firms with UK clients to ask about their preparations for Brexit.
France is one of several countries vying to win business from Britain as it prepares to leave the European Union in March next year. Paris is also the chief supporter of proposals to tighten the rules governing how funds manage their investments across borders, so-called delegation, to pressure firms to move more of their business to the EU.
The Autorite des Marches Financiers said it wanted UK-based firms to clarify the status of their operations in France. It asked how they were preparing for the loss of an EU financial “passport”, which allows firms based in member states to sell their services across the bloc, and offered them a “direct discussion” over the issue.
“We are one year before Brexit. We want to anticipate the impact of the Brexit on the French market,” Xavier Parain, managing director in charge of the Asset Management Directorate of the AMF, told Reuters.
“We confirm we sent a letter to companies that have an active passport for the French market just to be sure that UK investment managers have taken into consideration the uncertainty and that they are preparing appropriately to any kind of event linked to Brexit.”
The AMF had also asked the same questions of French firms working with UK clients, he said.
Some lawyers and fund managers told Reuters they considered the letters to be premature given the potential for a transitional deal between Britain and the EU to be agreed that gives investment firms longer to decide on their plans.
Britain and Brussels aim to agree at an EU summit next week a ‘standstill’ transition deal until the end of 2020, meaning business would continue as usual after Brexit Day on March 29, 2019.
Jamie Carter, chairman of New City Initiative, which represents 51 independent asset managers managing 400 billion pounds in assets, said some of his members had received the letter.
“Members have been thinking about contingency planning, but will largely be waiting for an announcement confirming whether there will be a transition period before pressing ahead so as not to waste time and resources unnecessarily.”
Writing by Simon Jessop; editing by David Stamp