Amsterdam was formerly viewed as a darkhorse candidate for attracting banks, asset managers, and venues looking to relocate their headquarters out of the UK ahead of Brexit. While falling behind its rivals, the city has succeeded in attracting US fixed income and derivatives trading venue Tradeweb, that has chosen Amsterdam for its new EU base of operations in light of the upcoming Brexit fallout.
To date, Amsterdam has missed out on some of the biggest names in the financial services industry – the vast majority of institutions have instead gone to Frankfurt or Dublin. However, Amsterdam has succeeded in attracting key players in the fixed income space, with Tradeweb being its latest entrant. The development follows nearly one month after its rival MarketAxess also chose the Dutch capital as its new hub within the bloc.
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Tradeweb’s decision has also coincided with pursuing the requisite licenses and applications from the Dutch Authority for the Financial Markets (AFM). The group’s efforts are not unlike other lenders operating in the UK, which is trying to get ahead of any Brexit scenario in which passporting rights would be revoked.
As one of the largest electronic venues for over-the-counter markets (OTC), the relocation of its EU base to Amsterdam would prevent any issues with Tradeweb’s operations down the road. Dutch regulatory authorities have maintained a positive stance towards trading venues, as opposed to maintaining strict bonus caps for banks looking to relocate to the city.
In particular, Dutch banks face limits to bonuses, which can be no more than 20 per cent of fixed pay, as opposed to other EU banks that pay bonuses of up to double the fixed pay. Still, Dutch authorities have hinted at rolling back the 20 percent cap, though only if banks employ at least 75 percent of their staff outside the Netherlands. Last month, MUFG became the first major lender to announce its plans to relocate its EU hub to Amsterdam.
Enrico Bruni, Head of Europe and Asia business at Tradeweb, commented in a recent FT report: “Tradeweb’s imperative has always been to provide our global client base with access to liquidity across a range of products. Post-Brexit, for many investors, uninterrupted access to that liquidity requires an independent and fully functional regulated entity within the EU.”