Regulator prepares for funds influx
The Central Bank is in discussions with a number of international investment companies, in preparation for an influx of investment managers into Ireland if the UK votes to leave the EU.
The regulator envisions that "there will be quite a few possible applications for authorisation in this jurisdiction", Central Bank director of markets supervision Gareth Murphy said in an interview published over the weekend, in the event Britain decides to leave.
International asset management companies would probably be among the first financial services groups to move some business to Ireland if Britain decides to leave the EU. Asset managers are concerned they will not be permitted to sell funds that are regulated in the UK into Europe in a Brexit scenario, forcing them to move the products to European cities such as Dublin.
The financial regulator wrote to a number of investment companies, fund depositaries and administrators in the last two weeks, asking them to explain how Britain leaving the EU would affect their Irish operations, a spokesperson told the Irish Independent yesterday.
In an interview published online by the Financial Times yesterday, Mr Murphy said: "The transition [if the UK leaves the EU] could be very messy. I have pressed my staff to gather as much market intelligence [as possible] around this issue."
Mr Murphy said fund companies will want to "establish a foothold" in the EU in the event Britain votes to leave when it goes to the polls in June.
"The firms we regulate and their counterparts in the UK are faced with a considerable period of uncertainty if Brexit were to happen," he said.
"We are envisioning that there will be quite a few possible applications for authorisation in this jurisdiction."
An influx of companies from the UK could be beneficial to the Irish economy.
"Ireland does stand to benefit," said Niamh Meenan, head of global asset management at Grant Thornton.
"It needs to be prepared so that in the event of a Brexit, Ireland rather than Luxembourg is the obvious solution."
The official Irish position supports Britain remaining in the EU.
A Brexit could have serious consequences for trade between the two nations, the Government has warned.