Communication addressed to UK intermediaries ahead of the end of the transition period (15 December 2020)

With the completion of the United Kingdom's withdrawal from the European Union, when the transition period expires on 31.12.2020, British financial intermediaries will have to stop operating in Italy unless they have been newly authorized to do so.

From 1 January 2021, the provision of banking and financial services in Italy by parties established in the UK, which are no longer authorized to do so, is to be considered unlawful.

Financial intermediaries have been invited several times to make suitable plans for an orderly management of Brexit; the Bank of Italy has issued specific guidelines (Communication April 2020)[1] on the possibility of continuing to provide services in Italy as third country operators, transferring their activities to another intermediary - either an existing one or a newly established one - that is active in Italy, or ceasing to provide services by the end of this year.

Attention has been drawn to the need to promptly inform clients as to what will happen to existing contracts in the wake of Brexit (Communication February 2019[2], reiterated in that of April 2020), also to enable clients to make informed decisions as to whether to maintain or rescind their contracts.

In the recent press release published on its website (Press release_Brexit_Nov_2020),[3] the Bank of Italy invited clients that had not received any communications from the UK intermediaries with which they have a contract to contact them immediately to request information.

The EBA (EBA News and Press 9 November 2020)[4] and the European Commission (EU Commission Communication July 2020) have also provided guidelines and called upon intermediaries to adopt plans for an orderly management of Brexit and to avoid adverse effects for their clients ( EBA Communication 8 December 2020)[5].

Given that the deadline of 31 December 2020 is fast approaching, the Bank of Italy invites financial intermediaries to complete - if they have not already done so - their plans for an orderly management of Brexit, and expects that operators will have already informed their clients about the impact of Brexit and managed the transition in a careful and orderly way.

In order to maintain due focus on customer protection, financial intermediaries are called upon to enhance their instruments and channels of assistance and communication, including online ones, for their clients, and to keep them running also when the transition period ends. Specifically, intermediaries shall at the very least indicate: who their clients can contact and the procedures for receiving assistance according to their specific needs or for submitting requests or complaints; the alternative dispute resolution system to which they belong; for banks only, the deposit protection scheme applicable to existing contracts; and any changes that may occur after 31.12.2020, in the event of the continuation of contracts.

Financial intermediaries shall endeavour to limit to the utmost the adverse effects of interrupting services for clients and, in any case, to allow them to exercise, in the time and manner prescribed by contractual and legal provisions, the prerogatives relating to the continuation, transfer or termination of existing contracts.