[Newsflash n. 62]

As anticipated in January 2019 by the Ministry of Economy and Finance (see our Newsflash n. 59), on 26 March 2019, the Law Decree No. 22/2019 (“Stability Decree”) came into force introducing a temporary permission regime setting out the procedure that will allow UK intermediaries and markets to continue or to stop doing business in an orderly manner in Italy in the event of no-deal Brexit.

The decree establishes a transitional period from the date when the potential hard Brexit will take place (“withdrawal date”) envisaging different regimes according to the nature of the UK entity (i.e. entities with their registered office in UK), the methods adopted to provide services (freedom to provide vs branch) and the type of client category.

(A) Intermediaries entitled to the transitional permission period

UK banks, UK investment firms and UK e-money institutions may continue their business in Italy for 18 months, provided that they notify their intention to do so at least 3 business days before the withdrawal date.
After the expiry of the 18 months period, the above entities are entitled to operate in Italy only if they have submitted a request for authorization as non-EU or Italian entities no later than six months from the date of commencement of the transitional period.
If they fail to submit such request, such entities may continue their activity only for further six months, thus reducing the transitional period to 12 months.

(B) Intermediaries required to stop doing business in Italy

UK payment institutions and fund managers, UCITS domiciled in the UK and doing business in Italy, UK electronic money institutions, UK banks and UK investment companies and UK insurance companies providing services in Italy under the freedom to provide services to retail and professional clients upon request shall cease their activities within the maximum term of 6 months, or 18 months only in case of UK insurance from the withdrawal date, except for the time necessary to guarantee the orderly closure of ongoing business deals and meet contract termination notice terms and conditions.

Within 15 days from the withdrawal date, the entities shall send a communication to customers as well as, except as regards insurance companies, other interested parties and competent authorities informing of the initiatives taken to ensure the orderly termination of activity.

Additional specific provisions and timing apply to deposit taking ,derivatives, loans, trading venues , alternative dispute resolutions, deposit guarantee schemes.

CONSOB IMPLEMENTING MEASURES 
On same day, Consob published Communication n. 7 of 26 March 2019 setting out the requirements for British operators obliged to discontinue activities in Italy as a result of hard Brexit.

BANK OF ITALY IMPLEMENTING MEASURES
Following Consob Communication, on 27 March 2019, the Bank of Italy published two Communications containing instructions addressed to Italian intermediaries operating in the UK and to UK intermediaries operating in Italy.

We will monitor the uncertain scenario concerning Brexit and keep you posted. Meanwhile, please do not hesitate to contact us for any further clarification on this and related topics.


Contacts:

Vito Vittore
Partner

Elena Pagnoni
Partner

Roberta Talone
Associate