Hedge funds’ passporting plea ‘wildly optimistic’

Author: Tom Young | Published: 11 Jan 2017

The hedge fund industry’s pleas for the UK to negotiate to retain passporting rights post-Brexit has been criticised by market participants as unrealistic.

On December 19, the Alternative Investment Management Association (AIMA), Managed Funds Association and the Alternative Credit Council released a report calling for the retention of the passport once the UK leaves the EU.

The passport allows financial companies to do business in one member state of the EU, or the European Economic Area (EEA), and then ply their trade across the region without having to be separately authorised in each country. But it relies on single market membership, which in turn involves accepting the free movement of people, something the UK electorate voted against in the referendum in June 2016.

According to the report, the removal of the passport could cost the UK thousands of jobs and billions in revenues. Around 5,500 firms registered in the...