February 9, 2018 / 5:03 PM / a year ago

BoE's Cunliffe warns EU over curbing cross-border funds operations

LONDON, Feb 9 (Reuters) - Curbing the ability of asset managers located in Britain to run funds based in the European Union after Brexit would go against global norms and could fragment markets, Bank of England Deputy Governor Jon Cunliffe said on Friday.

The bloc has published guidance on how UK-based asset managers could continue to run funds in the bloc after Britain leaves the EU in March 2019.

The guidance says there must be enough senior management in the EU country where the fund is listed so that not all key tasks are delegated back to Britain.

Asset managers fear this will mean having to move several staff to the bloc after Britain leaves the EU in March 2019.

Cunliffe said that if the EU’s move was motivated by a desire to pull activity and risk back within its boundaries after Brexit, then this “could act as the harbinger of fragmentation to come”.

“That would raise the cost and reduce the efficiency of market-based intermediation of savings in the EU and, if it led to wider effects, further afield,” Cunliffe said in a speech to an asset management forum in California.

Cunliffe did not address the outlook for British monetary policy in the text of the speech provided by the BoE. (Reporting by Huw Jones, editing by David Milliken)

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