One of the UK’s oldest insurers, Prudential, is considering plans to relocate its headquarters to Hong Kong from London. The possible move is seen as a response to new European capital adequacy regulations. Michael Wainwright, partner at international law firm Eversheds, comments:
“It is not surprising that the tightening of financial regulation around the world in response to the recent crisis will cause some industry players to reposition their operations. Certainly today’s news fits with our own “Regulation in the City” report, which reveals a significant degree of frustration about the UK regulatory regime. Half of those surveyed in our report were concerned that businesses will move to other financial centres in an attempt to avoid regulatory pressures, with 44% thinking that businesses will relocate to Hong Kong and 37% to New York. These findings seem to be playing out in practice here. Equally, two thirds of businesses stated that uncertainty around legislation compliance has led to their organisation delaying business activity. This suggests that in the longer term London may indeed be the loser, as international firms decide that the regulatory costs of being headquartered in London outweigh the other advantages of the location.”
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