European financial watchdog the European Securities and Markets Authority (ESMA) wants London-based hedge funds and asset managers to demonstrate that they have established a suitable physical presence in the European Union, according to a report by Reuters.
European financial watchdog the European Securities and Markets Authority (ESMA) wants London-based hedge funds and asset managers to demonstrate that they have established a suitable physical presence in the European Union, according to a report by Reuters.
ESMA also wants national regulators to increase their scrutiny of how funds operate and whether they have allocated sufficient resources to running their operations inside the EU.
In an interview with Bloomberg News ESMA chair ESMA chair Serena Ross said: “Firms need to have a certain minimum footprint in terms of the right people, the decision making, and making sure you actually have your key control functions in the jurisdiction where you are doing business.”
In December, an ESMA review found that national regulators were allowing London-based firms to operate having only relocated limited staff and technical resources. Regulators in Ireland, Luxembourg and the Netherlands were all found to have authorised firms with insufficient senior managers and other resources based in the EU, with only the French regulator having fully met its requirements.
