The Law Decree No. 22 of 25 March 2019 proving urgent measures related to the event of the UK withdrawal from the European Union has been published yesterday on the Italian Official Gazette. The Law Decree substantially confirms the contents of the draft circulated by the Italian press last week.
Italy has put in place 'urgent measures' and a 'transitional period' in order to manage the effects of a hard Brexit scenario on the activities of UK banks, investment firms, insurance and reinsurance undertakings and intermediaries acting in Italy. These measures aim to protect financial integration, the stability of the Italian financial system, the continuity of trading and the provision of financial services and the rights of Italian clients.UK firms that are carrying out their activities in Italy at the date of withdrawal are allowed to continue carrying out such activities during an 18-month transitional period, providing that they send a notice to the relevant Italian authority. In particular:
- UK banks may continue to carry out their activities so long as they give prior notice to the Bank of Italy (with the exception of banks collecting savings under the freedom to provide services regime, whose activity will be limited to the management of relationships established before the date of withdrawal).
- With regard to investment services and activities, Italian branches of UK banks and investment firms may continue to carry out their activities, so long as they give prior notice to CONSOB. UK banks and investment firms operating under the freedom to provide services regime may only continue to carry out their activities vis-à-vis eligible counterparties and professional clients (i.e. they will have to terminate their activities vis-à-vis retail clients and professional clients on request starting from the date of withdrawal).
- Branches of electronic money institutions may continue to operate under the right of establishment so long as they give prior notice to the Bank of Italy. UK electronic money institutions and payment institutions operating under the freedom to provide services regime must terminate their activities and may only manage the termination of existing relationships.
- With respect to asset managers, the transitional measures mean that they will have to cease to carry out any activity vis-à-vis retail clients and professional clients on request from the date of withdrawal.
- From the date of withdrawal, UK insurance and reinsurance undertakings and intermediaries operating under the right of establishment or the freedom to provide services will be cancelled from the EU list of undertakings and the IVASS register (i.e. RUI) respectively. In order to guarantee the continuity of services for policyholders, insured persons and persons entitled to insurance benefits, these companies may continue to operate during an 18-month transitional period with respect to the management of existing contracts and coverages in force at the date of withdrawal, without entering into new contracts or renewing, even tacitly, existing contracts. UK undertakings are requested to submit to IVASS a plan containing the measures allowing the regular and proper execution of existing contracts and coverages (including payments of claims) within 90 days from the date of entry into force of the decree. Policyholders may withdraw from existing contracts with a duration of more than one year at no additional cost.
UK firms must inform their clients, other persons with whom they have dealings and the relevant Italian authorities of the initiatives taken to ensure the orderly termination of business and of the operating regime applicable to UK firms within 15 days from the date of entry into force of the decree.
The notice to the relevant authority to continue banking activities and financial services during the transitional period must be sent no later than three working days prior to the date of withdrawal, in accordance with the procedures to be laid down by each competent authority.
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