Interdealer broker TP ICAP PLC (LON:TCAP) today posted an update on its Brexit readiness plan.
The company notes last week’s announcement by French regulators AMF and ACPR. In their statement, the regulators noted that, as of 1 January 2021, EU law is no longer applicable in the UK and that European regulations no longer allow for the supply of investment services into the EEA through brokers located in the UK and acting on behalf of a UK entity.
The AMF and the ACPR also stated that entities located in the UK that wish to provide investment services into the EEA should establish an authorised branch or subsidiary there, which must have sufficient staff to ensure prudent risk management and effective supervision of their activities.
As part of its Brexit readiness plan, TP ICAP has established and capitalised a new authorised subsidiary in France, TP ICAP Europe S.A. (TPIE), to undertake the Group’s broking business in EU 27 member states. However, due partly to the extraordinary circumstances relating to the COVID-19 pandemic, in particular relating to stay-at-home orders and travel restrictions currently in effect, it has not yet been possible to complete the relocation of staff to the EU 27 or the local hiring of brokers in the EU-based offices of TPIE as quickly as originally planned.
Today, TP ICAP confirmed its commitment to complete the relocation of staff to the EU 27 and the local hiring of staff in the EU-based offices of TPIE at the earliest opportunity.
Following the loss of the EU passporting rights, TP ICAP’s UK-based authorised subsidiaries no longer have the full scope of necessary regulatory permissions to service all clients based in the EU 27. TP ICAP’s UK-based authorised subsidiaries continue to service clients based in certain EU 27 member states where possible under available temporary permission regimes, existing third country access rights, or as otherwise permitted by applicable laws and regulations.
TP ICAP believes that the successful implementation of its Brexit readiness plan will ensure a robust and sustainable future operating platform for servicing EU 27-based clients, notwithstanding the fact that the regimes for the cross border provision of financial services from the UK to the EU 27 may evolve further during 2021.
TP ICAP says it does not expect any material impact on the Group’s global broking business or its financial results as a result of any of the matters disclosed above, including any temporary reduction of services provided to clients based in the EU 27.