The CEO of Standard Life Keith Skeoch warned that companies managing financial assets will have to relocate in EU state members in order to maintain operations due to requirements imposed by Brussels.
Discussing the matter on CNBC, Skeoch said: “Just for asset management, there are two clear homes: one is Luxembourg and the other strong contender is Ireland.”
According to a survey from the Investment Association drafted in 2015, UK asset managing companies manage around £2.2 trillion on behalf of overseas clients of which 37% consists of EU assets.
“Certainly we’re looking at putting our MiFID company into Ireland.”
MiFid (Markets in Financial Instruments Directive) is an EU law that regulates investment services throughout the 31 members of the European Economic Area (EEA) created and implemented by the European Commission in Brussels.
The United Kingdom implemented MiFID into UK law in 2007 and gave UK companies the right to freely trade in EU states.
Skeoch explained he was “quite concerned” about the effects Brexit could have on his business and suggested companies should “plan for a hard Brexit.”
“From a business perspective, it’s absolutely clear to me you have to get you contingency plans in place.”
“No matter what anybody says, plan for a hard Brexit and that’s what we are doing. We know what we need to do. The biggest issue here is uncertainty.”
He said that politicians changing their minds “every other week” will cause issues for business, but that after 37 years in the markets he wasn’t dismayed.
“I have seen a lot of stuff happen and normally you work your way through it. It’s never as bad as it looks on the day.”
Skeoch maintained that Ireland and Luxembourg were increasingly becoming “strong attractors” for companies seeking to relocate to a EU member state following Brexit.