European Central Bank (ECB) has asked UK-based investment banks to shift senior staff and trading activity to the ‘empty shell structures’ they have set up in Eurozone post Brexit.

The move is part of the ECB’s efforts to prevent the disruption of banking services and ensure broader financial stability in the bloc as several international banks continue to serve euro zone clients out of London.

ECB head of supervision Andrea Enria said in a blog post: “The ECB is not setting specific targets for the relocation of banking business to the euro area.

“Instead, we want to ensure that incoming legal entities have onshore governance and risk management arrangements that are commensurate, from a prudential perspective, with the risk they originate.”

Enria, who cited empty shell structures as “a very real concern, added that ECB will issue “binding decisions” to investment banks with most material trading desks.

This will require such banks to appoint a head of each eurozone trading desk, and put in place sufficient infrastructure and number and seniority of traders to manage risk locally.

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ECB also requires these banks to set up solid governance and internal control framework of remote booking practices and ensure limited reliance on intragroup hedging.

Enria added: “The ECB is navigating uncharted waters. No major supervisor has ever had to assume, over a short period of time, the integration of a significant number of incoming institutions with global market activities belonging to groups headquartered in third countries in its supervisory remit.”