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Italy hands UK financial companies six-months post-Brexit operating extension

Suban Abdulla
·3-min read
The morning sunlight illuminates the office buildings of the Canary Wharf financial district in London on November 9, 2020. - Britain and the European Union resumed crucial negotiations in London on Monday over a post-Brexit free trade deal, with time running short and both sides saying major obstacles remain. (Photo by DANIEL LEAL-OLIVAS / AFP) (Photo by DANIEL LEAL-OLIVAS/AFP via Getty Images)
Britain officially departed from the European Union’s Single Market and customs union at 11pm on Thursday 31 December, more than four years following the referendum of June 2016. Photo: Daniel Leal-Olivas / AFP via Getty Images

Italy has allowed UK financial companies to keep operating in the country post-Brexit for another six months till 30 June, Italy’s banking and bourse authorities said on Saturday.

Italy’s Consob bourse watchdog said firms that had applied before the end of 2020 for permission to keep operating in the Italian market would be given a six-month extension.

“During such periods, operations are limited to activities for which an authorisation is sought and to outstanding contractual relationships,” Consob said, adding that new contracts could not be signed or old agreements modified.

“It is allowed to perform activities in connection with the management of the so-called ‘life-cycle event’ for derivatives contracts not subject to clearing by a central counter party.”

It comes as financial intermediaries await the same authorisation to do business in Italy as non-EU companies.

Britain officially departed from the European Union’s Single Market and customs union at 11pm on Thursday 31 December, more than four years following the referendum of June 2016.

READ MORE: Firms exhale as UK and EU agree grace period on Brexit paperwork

It clinched a last-minute Brexit deal with the bloc, which will see tariff-free and quota-free trading between the pair.

But, while the agreement announced on Christmas Eve set out rules for industries such as fishing and agriculture it did not cover the finance sector.

As such, British financial companies no longer have direct access to most EU markets post-Brexit, without authorisation.

Meanwhile, prime minister Boris Johnson conceded that his trade deal with the EU may fall short of his desires for the sector.

Under the agreement, banks, insurers and other financial firms based in the UK will not be granted automatic access to EU markets from the end of the transition period on 31 December. Instead they will have to be deemed by the EU to be governed by rules as robust as within the bloc.

READ MORE: Rishi Sunak says Brexit deal will see changes in financial world

The move comes after UK chancellor Rishi Sunak, last week said that the Brexit agreement will see changes in the financial world, and allow Britain to “do things differently.”

Sunak vowed to make the City of London “the most attractive place” to list new firms.

There is not much detail yet on financial services and the trade treaty brokered with Brussels on Thursday provides little information on EU market access — which must still be negotiated for British-based companies in specific deals.

“But this deal also provides reassurance because there’s a stable, regulatory co-operative framework mentioned in the deal which I think will give people that reassurance that we will remain in close dialogue with our European partners,” Sunak said.

Watch: Why fishing was such a thorny issue in Brexit negotiations