On Wednesday 23 February 2022, Luxembourg for Finance (LFF) held a 90-minute post-Brexit online event entitled "Building Bridges with the UK" which was livestreamed from its website.
The premise to the event was that it is now time to chart a new chapter in UK-EU financial services: "One that builds on the already strong ties that exist to ensure that, while each moves in its own direction, the relationship remains. Our Building Bridges with the UK event will examine the future financial services relationship, delving into the opportunities for growth, the future landscape, and more".
Nicolas Mackel, CEO at Luxembourg for Finance, welcomed everyone and set the scene by stating that Luxembourg has grown by a symbiotic relationship with the UK, with Brexit splitting the market. This event is looking beyond Brexit, he explained, how we go from here and looking ahead at opportunities that present themselves. He stated that regulatory divergence is inevitable on both sides of the channel.
Kerstin Mathias, Regulatory Affairs and Policy Director at City of London Corporation, made a 20-minute presentation entitled "Reforms (planned) in the UK financial services industry". She explained that preferred to use the term "parallel evolution" rather than "divergence" and she wanted to try to avoid the term "Brexit too". Currently the rule-book is almost identical; she stated that she would try to focus on six areas, looking at the future direction of travel.
On Vision, four key themes are setting the future agenda (Openness, Competitiveness, Sustainable Finance, Technology & Innovation), to attract investment; she mentioned various reports that have been published.
On the future regulatory framework, she explained that the vast majority of the UK's financial framework flowed from the UK. She stressed that key reforms are addressing evolution, not revolution, and address long-term growth and international competitiveness, sustainable growth, conducting a rule review, a cost-benefit analysis and moving retained EU law for new legislation.
On sustainable finance, she addressed Green Finance: a roadmap to sustainable investing (2021) which sets out the UK government's long-term strategy. She explained that the first phase will involve informing investors and customers.
On FinTech Regulation, she mentioned the Kalifa Review which addressed policy and regulation, investment, skills and talent, as well as national.
The Business Environment looks at both tax (corporate tax increase, banking surcharge, health and social care levy) and access to international talent (new immigration system and end of freedom of movement, launch of new routes in 2022 and new changes coming in 2022).
She recounted that other key initiatives include Solvency II (HM Treasury was consulted on reforms in 2021), Wholesale Market Review (WMR) and the Lord Hill Review. She added that there are also many retail and wholesale issues being taken forward.
In conclusion, she summarised that the UK and EU and evolving in parallel, with the same objectives and challenges, with a focus on customers and clients (not just in the UK, but globally), and a continued commitment to high standards. She stressed that the UK is absolutely committed to
Nicolas Mackel confirmed that Sustainable Finance is the future and he hopes that everyone works together to avoid market fragmentation. Looking ahead, he stated that the next part of the event would be looking ahead for opportunities.
This presentation was then followed by three panel sessions / interviews, the first entitled "Finding asset management opportunities in both markets", moderated by Jérôme Wigny, Partner at Elvinger Hoss Prussen, with Micaela Forelli, Managing Director Europe at M&G International Investments, and Mark Thomas, Head of UK at Jupiter Asset Management.
The second session, entitled "Life insurance on both sides of the Channel" was led by Marc Hengen, CEO at Luxembourg Insurance and Reinsurance Association (ACA), who interviewed Florent Albert, Managing Director Europe & Group CFO at Lombard International.
The third session, entitled "The future of the European payments landscape" was led by Thibault de Barsy, Vice-Chairman & General Manager at The Payments Association EU, who interviewed Marion King, Director of Payments at NatWest Group.
