(Bloomberg) -- Goldman Sachs Group Inc. is shifting some of its euro swaps trading desk to Milan from London, the latest example of roles moving to the continent after Brexit.

The Wall Street giant is relocating staff as it bolsters European offices in the wake of the UK’s departure from the European Union, according to people familiar with the matter. Staff will likely move early next year and Goldman will also be hiring staff locally, two of the people said.

A spokesman for Goldman declined to provide details or numbers of people being moved while the relocations are being finalized. The firm currently has around 80 employees in Milan.

Some of the world’s biggest banks are under pressure to move more traders from London into EU cities such as Paris, Frankfurt and Amsterdam. The European Central Bank said in May that lenders who set up units in the euro area are still too dependent on operations outside the region, and found that about a fifth of the trading desks it reviewed “warranted targeted supervisory action.” 

That’s proving to be good news for Milan and other EU financial centers.

“Due to changes in the regulatory framework, Milan is now capital-market friendly,” Russell Clarke, partner at Figtree Search in London, said by phone.

JPMorgan Chase & Co. employs about 200 staff in Italy and is continuing to add more, according to a person familiar with the matter who asked not to be named discussing internal matters. It’s recruiting for nine new roles including two executive directors, one working on lending advice and the other advising clients on asset management. 

Citigroup Inc. has been increasing staff numbers in Italy since 2018 due to Brexit and a broader diversification strategy. It now employs about 230 people in the country, according to a person familiar with the matter.

It’s not just banks. Euronext NV in June opened a data center in Bergamo, about an hour from Milan, after relocating it from the town of Basildon outside of London. The operation facilitates a quarter of European equities trading, according to Chief Executive Officer Stephane Boujnah. 

“Since our clients used it themselves they all came back with a big ‘wow’ effect,” he said in an interview. “It makes a big difference in the perception of Italy as a European financial hub.”

To be sure, Milan remains a small player. Some 78% of Europe’s fixed-income traders are still based in London, down from 85% five years ago, according to data from Vali Analytics. Paris is in second place with around 14%. 

Tax Break

But some high-net worth individuals, bankers and fund managers are moving to Milan, partly lured by a favorable tax treatment. Italy allows new residents to pay a €100,000 ($104,000) flat rate on profits made abroad or pay no taxes on as much as 70% of income.

“Italy has been on the cards for awhile as a lot of Italians would like to return home and take advantage of the tax break,” Jason Kennedy, chief executive officer of the recruitment firm Kennedy Group, said by phone.

Nomura Holdings Inc. has said it wants to grow selectively in Milan, and recently hired Elena Agosti, a Goldman and JPMorgan veteran, who runs an all-woman desk from the city.

“Finally after years in trading there are enough women to find themselves on the same team,” Agosti said in an interview.

Other banks may look to move trading in European bond and currencies into the EU following strong performances during the third quarter, according to Jordan Galhardo-Burnett, principal and head of publications and insight at Expand Research.

“As we get into the medium-to-long-term there is likely to be a slow trickle” of jobs moving, he said. “Milan is well-placed.”

--With assistance from Luca Casiraghi.

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