European regulatory discussions are already being affected by the still-unknown impact of Brexit, according to the director general of the European Fund and Asset Management Association (EFAMA).
Speaking at a conference in Brussels this week, Peter De Proft said that, while the UK’s impending exit from the European Union (EU) was not being discussed generally, it was “already coming up in every file” as regulations make their way through parliament.
De Proft added: “For example, one of the first implications we see from a political decision like Brexit is that we feel [the European Securities and Markets Authority is] already losing power because there is a shift going to national competent authorities because of hesitation.”
In addition, De Proft pointed out that, after the next European elections in two years, there may be no more British MEPs on European parliament committees.
The UK currently has 73 MEPs, 13 of which are members or substitutes on the economic and monetary affairs committee.
Members such as Neena Gill and Kay Swinburne have been particularly influential in recent regulatory discussions.
Gill is the rapporteur for the money market funds regulation currently under discussion.
De Proft said: “Very often, files have people from the UK as rapporteur. We have a very important financial centre, and, in two years, we will have elections in the European Parliament. Will there still be Brits coming in? This is one of the things already influencing attitudes.”
The next European parliamentary elections are scheduled for 2019.
UK prime minister Theresa May has vowed to trigger Article 50 by March 2017 at the latest, which will begin formal discussions about the UK’s exit from the EU.
As a result, the two-year negotiation process may be complete or almost complete by the time the next elections are held.
Asked whether he was concerned about the future role of UK bodies such as the Investment Association – a key member of EFAMA – and the Financial Conduct Authority, De Proft said he hoped the industry would “continue to work all together to the benefit of the investors”.
“We have our single market, why should we start dividing that?” De Proft added. “We see it as something we have to cope with from a technical point of view, and I would say the asset management industry is less vulnerable.”
De Proft pointed to existing EU asset management hubs such as Dublin and Luxembourg as an indication the sector is already well organised to cope with any fallout from Brexit.
Of EFAMA’s 62 corporate members, 25 are based in London, and most of the rest have offices in the UK capital, De Proft said.
“We see this from a point of view of a European market and not from a political point of view,” he added.
“With the FCA and other colleagues, we work with them on a daily basis so we don’t see a need to change that. The treatment of investors is going to be the same.”