A UBS Group AG (UBS.N) unit asked a London judge for permission to transfer parts of its business out of the U.K. on March 1, saying it’s being forced into the move because Brexit poses a “real and immediate risk” that it may lose the right to conduct some operations in the European Union.
The bank is “being forced into a transfer” by Brexit, Martin Moore, a lawyer for UBS, said at a court hearing Tuesday. The plans are designed to keep operations going “in the context of the continued uncertainty as to whether or not there will be a transitional period and whether the passporting provisions will endure post Brexit.”
“The uncertainty has, if anything, increased over recent weeks,” he said.
UBS is the latest bank to go to court for permission to activate Brexit plans, with the U.K.’s scheduled departure from the EU now just weeks away. Barclays Plc won permission just last week to transfer large parts of its business from Britain to its Dublin-based subsidiary if needed, in another Brexit-driven move.
The Zurich-based lender’s motion -- with a decision expected later Tuesday -- seeks approval for transferring the entire business of its English unit UBS Ltd. to its German-based unit UBS Europe SE, in a move that will make the German unit big enough to be regulated by the European Central Bank.
Some of the English unit’s business is being kept in the country by being transferred to UBS’s London branch before March 1, including some cash equities, rates and credit and exchange traded derivatives. About 5,354 contracts and 3,164 counterparties will have been transferred by March 1, according to its filings for a court hearing on Tuesday.
Companies frequently have to seek court approval for major structural changes under a process known as a scheme of arrangement.
Passporting rights allow financial companies to market products and services in any EU country without having to set up a branch there.
A UBS spokeswoman confirmed the contents of the court filings.
UBS set out plans in March 2018 to move operations to Europe, with people familiar with the issue saying at the time that fewer than 200 jobs were expected to be transferred. The court hearing is the final step needed to activate the proposals.
Most of the jobs that are shifted from the U.K. will move to Frankfurt, but some will be elsewhere in the EU. The bank has picked Frankfurt as its post-Brexit EU hub and has made preparations for the worst-case scenario of Britain crashing out of the bloc without a deal, Chief Executive Officer Sergio Ermotti said in September.
ECB Move
Some of the English unit’s business is being transferred to UBS’s London branch before March 1, including some cash equities, rates and credit and exchange traded derivatives. About 5,354 contracts and 3,164 counterparties will have been transferred by March 1, according to its filings for a court hearing on Tuesday.
The plans are intended to take effect almost a month before the U.K.’s March 29 departure date from the EU but could be deferred if the bank’s English unit “receives sufficient comfort before then that suitable transition arrangements have been agreed by the U.K. and the EU,” the lender says in court documents.
Any deferral would be until July 24 at the latest, and the transfer plans could lapse if Brexit hasn’t happened by that date or if the decision to leave the EU has been reversed, the documents say.
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