Britain's vast fund management sector is holding its breath for the outcome of a key vote on Friday amid fears that thousands of industry jobs could be forcibly relocated to the EU after the end of the Brexit transition period.
Sky News has learnt that the Investment Association (IA) has decided to abstain on a vote to reform the constitution of the European Fund and Asset Management Association (EFAMA), which plays a crucial role in shaping industry regulation across the Continent.
Many City-based fund management executives have expressed alarm at the proposed changes, which will result in a dilution of the influence of non-EEA members based on the location of "senior decision-makers" within asset management firms, will marginalise the industry in the UK.
Chris Cummings, the IA chief executive, told board colleagues this week that he had "concerns about how the new [EFAMA] EEA advisory committee will interact with EFAMA's board", according to a person close to the situation.
"Equally, members have also been clear to us that it is essential the IA continues to enjoy a constructive and positive relationship with EFAMA to help advance our European agenda with policymakers," Mr Cummings wrote in an email to board members seen by Sky News.
"It has not been possible to get a membership-wide consensus on how to vote, but our arithmetic's indicate the proposals are more likely than not to pass."
He told colleagues that an abstention represented the most sensible course of action in those circumstances.
The Treasury has been warned that an exodus of asset management roles from the UK remains a possibility, depending upon decisions about the future of 'delegation', which allows companies to set up funds in one country and carry out portfolio management activities in another.
Fund management is one of the City's most important industries, as an employer, generator of tax income for the Treasury and as a magnet for other financial and professional services firms.
The chancellor, Rishi Sunak, is likely to address questions of the UK's future approach to equivalence with EU financial services regulation in a forthcoming speech.
A public consultation run by the European Commission on issues including delegation expires in January, and the Commission is expected to produce reform proposals next March.
Mr Cummings told IA members that profound regulatory reviews that will affect the asset management industry during the coming year made it "essential" for the IA to continue to support EFAMA.
"It is likely that many of the policy decisions being made by European stakeholders will in some way directly affect the UK, for example on delegation, and it is important for the IA to remain at the centre of the debate within EFAMA," he said.
"A vote against would risk the IA being shut out of these discussions."
He added that he had received "repeated assurances from the EFAMA Director General that it will continue to be inclusive and even-handed in how it represents the industry with European policymakers".
"In particular, I have received further guarantees that the EEA Advisory Committee will not be used to circumvent the EFAMA Board, and that all decisions of consequence will continue to be subject to rigorous and full debate by the EFAMA board."
An IA spokesperson said on Friday: "As committed members of EFAMA, we will continue to work together with the wider European investment management industry to meet the challenges and opportunities ahead.
"Investment managers have an important role to play in supporting the post-pandemic recovery and helping millions of savers and investors achieve their long-term financial goals.
"This aim is shared across Europe and remains the focus of our attention at this current time."
The result of the EFAMA EGM is expected later on Friday.