A UK firm is moving £1bn of assets to Ireland due to Brexit
Fund manager Royal London is transferring £1bn worth of assets to Ireland in preparation for the UK’s departure from the EU. The group, which has £114bn in total funds, was given approval from the UK's High Court to make the transfer.
In the event of a “no deal” Brexit the UK’s financial sector would lose its passporting rights, which allow them to operate within the EU’s single market. In his judgment, Mr. Justice Snowden commented: "In common with many other financial institutions, Royal London is concerned that in the event of a 'no-deal' Brexit it will lose the 'passporting' rights which currently enable it to rely upon its authorisation in the UK to carry out regulated activities to service its policyholders in other European Economic Area member states.
"To address this possibility, Royal London wishes to transfer its long-term business with policyholders in the EEA to RLI, which is be authorised and regulated in the Republic of Ireland, and thus able to service the policies concerned after Brexit, whatever form that may take."
Royal London is not the only financial group/institution to transfer operations out of the UK due to the possibility of a “no deal” Brexit. Others to make the move include; Royal Bank of Scotland (RBS), Barclays, Lloyds, Morgan Stanley, Goldman Sachs, HSBC, and The Bank of America.
Naturally, it's not just the financial sector that's moving operations and redirecting investments. In automobile manufacturing, we saw Nissan’s recent announcement that they were no longer going to produce their latest model in the UK due to Brexit uncertainty. Dyson has also unveiled plans to move its headquarters to Singapore, although they say this is to be closer to their market and not related to Brexit. However, some have proposed that a primary reason for the move is due to the lack of investment in the UK as a result of Brexit.
We have also heard warnings from Airbus chief executive Tom Enders about the redirection of future investments, as well as concerns from BMW. The medical industry has also been affected, with companies forced to seek new marketing authorisations outside the UK in order to continue trading within the EU's single market,
It’s not only large companies and corporations setting up operations outside of the UK. SMEs are also following suit in their droves.
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