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Brexit Financial Industry Impacts May Change Global Market Dynamics

European Union (EU) authorities are looking to change rules that may result in Brexit financial industry impacts for international banks. As a result, the financial rulebook known as MiFID II could be up for amendments that would negatively impact the United Kingdom (UK).

What is MiFID II?

MiFID II is reform legislation governing the financial industry. It came into being following the 2007-8 financial crisis. The EU’s purpose with MiFID II was to regulate financial markets in the trading bloc, and enhance protections for investors, thus restoring confidence.

MiFID II includes policies governing the following:

  • Commodities Trading
  • Derivatives Trading
  • Futures Trading
  • Record Keeping
  • Research Spending
  • Stock Trading

What Would Brexit Financial Industry Impacts Mean for International Banks?

Several Brexit financial industry impacts would alter how international banks interact with the EU and the UK. These impacts include:

  1. Financial services firms based in London must depend on an equivalence process to gain access to the EU
  2. The equivalence process will require the UK to prove to the EU that its rules post-Brexit are at least as strong as the EU’s
  3. The EU could unilaterally decide to exclude UK firms
  4. Equivalence process allows the EU to unilaterally change the requirements for equivalence

Should the EU choose to amend the MiFID II or alter the equivalence process, these changes will affect industry transactions. International banks with locations in the UK will face Brexit financial industry impacts that might:

  1. Halt adoption of open access, a provision meant to increase the competition in derivatives markets
  2. Remove the requirement that money managers pay separately for investment research and trading services
  3. Prevent large financial firms from providing research at low prices considered harmful to competitors

What Does This Mean?

Brexit financial industry impacts may be more far-reaching than initially thought. Since London is currently the largest financial market in Europe, other market areas in the EU may look to alter rules to help them gain business and increase their industry presence. As a result, financial services firms in the UK may soon face significant hurdles with respect to transactions in the EU.

What should Employers do About the Brexit Financial Industry impacts?

Employers in the UK should review their preparations for various Brexit scenarios that may arise in the negotiation phase. The Brexit Bill does not include all of the specific provisions that directly apply to financial industry points of concern. Issues covering these points may be determined during subsequent negotiations between the UK and the EU during 2020.

The UK has published several valuable resources with Brexit guidance for business. Companies should be sure to review the UK’s guidance to ensure they prepare accordingly. The UK has set up a portal to share information on the new rules for living, working, travelling, and doing business in the US and EU starting in January 21.

Conclusion

GMS’ team of global relocation experts has helped thousands of our clients understand how to respond to changing industry and international requirements. As a result, our team can help your company understand how various Brexit financial industry impacts may alter your need for relocating UK and EU workers.

GMS was the first relocation company to register as a .com. The company also created the first online interactive tools and calculators, and revolutionized the entire relocation industry. GMS continues to set the industry pace as the pioneer in innovation and technology solutions with its proprietary MyRelocation® technology platform.

Learn best practices from Global Mobility Solutions, the relocation industry and technology experts who are dedicated to keeping you informed and connected. Contact our experts online to determine how Brexit financial industry impacts may affect your relocation program, or give us a call at 800.617.1904 or 480.922.0700 today.

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British Workers Fill Jobs As EU National Job Seekers in the UK Decline

As the United Kingdom’s (UK) economy continues to grow even while facing the prospect of a “no-deal” Brexit, British workers fill jobs since European Union (EU) nationals are declining in the workforce. Migration to the UK from the EU continues to fall as it has been doing since 2018. In our 2019 Industry Update – Talent Mobility, Real Estate, Household Goods, and Immigration white paper, we present several Brexit scenarios that may impact global mobility. Whether the UK can reach a deal with the EU or not, the UK economy still needs workers, and British workers fill jobs that otherwise would have been filled by EU nationals.

Declining labor force participation from EU nationals in turn creates openings for unemployed British workers. As a result, employers in the UK have been adjusting their talent recruitment programs to fill job openings. UK unemployment has fallen to lows not seen in the country since the 1970’s, and job openings have risen to record levels. According to the UK Office for National Statistics:

  • UK employment increased by 179,000 workers in the three months to February 2019
  • Total employment of 32.72 million workers is a record high
  • Employment growth is mostly due to increasing labor force participation by women
  • UK unemployment rate of 3.9% and economic inactivity rate of 20.7% represent a joint record low

Service Industry Sectors Where British Workers Fill Jobs

The first part of 2019 saw several service industry sectors in the UK experience high growth, including:

  • Computer Programming
  • Healthcare
  • Retail Trade

Manufacturing Industry Sectors Where British Workers Fill Jobs

Additionally, UK manufacturing output rose due to strong demand for computer and electrical components. Computer, electronic, and optical products manufacturing in the UK tend to be of products with higher value. They are also not as price-sensitive as lower cost commodity-type items. Within the UK, the manufacturing sector:

  • Employs 2.6 million workers
  • Contributes up to 11% of Gross Value Added (GVA), the measure of the value of goods and services produced in the UK
  • Represents 44% of total UK exports
  • Accounts for 70% of UK business research and development (R&D)

What Does This Mean?

Despite the uncertainties surrounding Brexit, UK wages and employment continue to grow. UK business sentiment remains strong and steady, and manufacturing appears to have rebounded. Some of the growth in manufacturing is due to acceleration in the growth of raw materials held as stock. As a result, raw materials, work in progress, and finished goods held as stock has risen. Part of this growth may be due to manufacturers anticipating production glitches due to Brexit. Business confidence in the UK increased to -13 in the second quarter of 2019, from the prior quarter’s reading of -23. All of these trends provide positive momentum and help British workers fill jobs as the UK economy expands.

Job seekers in the UK should investigate opportunities in the service sector for openings in computer programming, healthcare, and retail trade. They should also investigate opportunities in the manufacturing sector for openings at companies that produce computer, electronic, and optical products. Job openings may vary by region, so job seekers should be open to global relocation opportunities that let British workers fill jobs. They should also utilize the best online job sites in the UK, including Adzuna, Indeed UK, and Monster UK. Job seekers should utilize professional career services to enhance their job search and achieve success in their career objectives.

What Should Employers do?

Employers in the UK should examine their employment needs. Economic growth fosters competition for job seekers with requisite skills and training. They should review their relocation program to determine if it benefits their talent acquisition goals and corporate objectives. Employers should work with a Relocation Management Company that has the knowledge and expertise to help them design a relocation that promotes global talent acquisition. RMCs with knowledge and experience will provide expert guidance on designing a relocation program to attract qualified new hires and relocating employees.

Conclusion

GMS’ team of global relocation experts has helped thousands of our clients develop hiring and recruiting programs to attract highly skilled job seekers in the UK. Our team can help your company determine how to attract job seekers looking for employment opportunities. We can help British workers fill jobs that EU nationals no longer pursue.

GMS was the first relocation company to register as a .com. The company also created the first online interactive tools and calculators, and revolutionized the entire relocation industry. GMS continues to set the industry pace as the pioneer in innovation and technology solutions with its proprietary MyRelocation™ technology platform.

Global Mobility Solutions is proud to be named and ranked #1 Overall, and #1 in Quality of Service by HRO Today’s 2019 Baker’s Dozen Customer Satisfaction Survey.

Contact our experts online to discuss your company’s recruiting, hiring, and relocation program needs in the UK to help British workers fill jobs, or give us a call at 800.617.1904 or 480.922.0700 today.

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