LONDON (Reuters) - Britain should let European Union fund managers have access to British-based clients after Brexit even there is no reciprocal arrangement for British firms, a leading trade body for hedge funds and other alternative asset managers said.
The London-based Alternative Investment Management Association (AIMA) said in a report released on Monday that Britain should “generally opt for an approach that prioritises openness over reciprocity”.
The report reiterated AIMA’s previous calls for a deal with the EU based on regulatory equivalence. This contrasts with the British financial sector’s call, backed by government, for a far more ambitious and novel financial services trade deal.
This would be based on mutual recognition, or reciprocal acceptance of each side’s rules.
The government has said the EU equivalence system is unworkable as market access to the bloc is granted solely at the discretion of Brussels and can be scrapped at short notice.
AIMA also said that Britain, which is Europe’s largest hedge fund centre, should use a transitional period, which extends Britain’s departure from the bloc until 2021, to finalise cooperation deals with EU national regulators.
Any deal struck by Britain and the EU should also ensure that deals struck between investors and clients prior to Brexit continue under so-called ‘grandfathering’ provisions, AIMA said.
Reporting by Simon Jessop and Huw Jones; Editing by Alexander Smith