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Bracing for Brexit, Dutch regulator seeks more resources - sources

Bracing for Brexit, Dutch regulator seeks more resources - sources
FILE PHOTO: The Amstel river is pictured in this aerial shot of Amsterdam, Netherlands, June 14, 2017. REUTERS/Cris Toala Olivares/File Photo   -   Copyright  Cris Toala Olivares(Reuters)
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By Anthony Deutsch

AMSTERDAM (Reuters) – The Dutch financial markets regulator, already scrambling to process a flurry of relocation requests from UK-based companies, will need about 10 percent more staff to cope with the extra work caused by Brexit, sources close to the matter told Reuters.

Amsterdam is competing with European Union cities including Frankfurt, Paris and Dublin to attract business from London, with all chalking up recent major relocation wins ahead of Britain’s departure from the EU in March.

More than 20 trading firms have applied for licences to relocate operations to Amsterdam.

The Dutch have also started hiring about 950 customs officers, mostly at Rotterdam Port, Europe’s largest, to prepare for the extra bureaucracy required for British goods to enter the EU if the two sides do not reach a withdrawal agreement.

The financial markets regulator, known by its Dutch acronym AFM, is having trouble filling jobs as it pulls resources from across the organisation to a dedicated Brexit team, the sources said, speaking on condition of anonymity.

The AFM, with an annual budget of nearly 100 million euros ($116 million) and 650 staff, on Monday declined to comment on the details, but a spokesman said that if Brexit went ahead, the regulator would need increased funding.

The organisation will seek millions of euros to bolster its budget during upcoming meetings with the finance ministry, one of the sources said.

“It is unclear exactly what will happen and which trading platforms will come to Amsterdam, but it has the potential to have a huge impact on the European trading market,” said another. “In any Brexit scenario, there will need to be a lot more resources.”

London has long dominated securities trading in the EU and Britain’s counterpart to the AFM, the Financial Conduct Authority, has 3,400 staff to ensure orderly markets.

The first source said the AFM would need roughly 10 percent more staff, or at least 60 full-time workers, to handle the increased workload.

Among major players in the process of setting up Dutch operations are Chicago’s Cboe Global Markets <CBOE.O>, the London Stock Exchange Group <LSE.L>, Japan’s Norinchukin Bank [NORB.UL] and Mitsubishi UFJ Financial Group <8306.T>, as well as U.S. firms Marketaxess <MKTX.O>, Jane Street and Tradeweb.

The Netherlands, with strong UK trading ties, is more economically exposed to Brexit than most EU countries. Gross domestic product could be hurt by as much as 4 percentage points by 2030 in the worst scenario, according to Rabobank forecasts.

Brexit is set to force the EU to rethink its core securities trading rules, known as MiFID II, which were introduced in January, creating further demands on the bloc’s regulators. The EU’s European Securities and Markets Authority, which oversees securities markets in conjunction with national watchdogs like the AFM, has repeatedly said it also needs more resources.

($1 = 0.8635 euros)

(Additional reporting by Huw Jones in London; Editing by Mark Potter)

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