The Financial Industry Regulatory Authority fined Citigroup $5.5 million and ordered it to pay at least $6 million to retail customers over errors that occurred between February 2011 and December 2015, and involved more than 38 percent of the equity securities that the New York-based bank covered.
LONDON: Citigroup Inc. is planning to have its new broker-dealer in Frankfurt up and running by year-end in case the U.K. exits the European Union with no trade deal or transition agreement in place.
The firm is talking to German regulators about moving some of its European customers’ investment activities from London to Frankfurt in time for Britain’s departure in March 2019, Citibank Europe Plc head Zdenek Turek said in an interview.
The bank plans to relocate around 150 roles to the new hub, many of which will be hired locally, according to a person with knowledge of the plan.
“We assume that there will be no transition period so we have to be ready,” Turek said in Vienna. “We want to guarantee that the clients can continue the business they do with Citi today in Europe in the same portfolio of products without disruption.”
Frankfurt, currently home to about 350 Citigroup employees, is the clear winner from the Brexit vote, with banks including Goldman Sachs Group Inc. and Morgan Stanley choosing the city for their new trading headquarters inside the EU.
Wall Street firms have in recent weeks started advertising for scores of local support staff ranging from risk managers to compliance officers and information-technology experts, according to Internet listings.
Regardless of whether the U.K. can reach a two-year transition arrangement, EU regulators have made it clear they expect banks to establish full-scale, standalone operations inside the trading bloc staffed by significant numbers of both front- and back-office staff as well as senior employees, rather than so-called brass-plate offices with people commuting from London.
Frankfurt isn’t the only beneficiary of Brexit. Citigroup will also relocate roles to offices in Madrid, Milan, Paris, Dublin and Luxembourg, the person said. Citigroup already operates in 21 EU states, and has more than half of its European employees based outside of the U.K.
“2018 feels good, the growth in Europe is there, inflation is still low and the monetary policy is still very accommodative,” Turek said. - Bloomberg
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