Article 22 of Decree Law 183/2020 (only in Italian) contains provisions on the operations of UK banking and financial intermediaries and insurance companies following the expiry of the transition period under the agreement for the withdrawal of the United Kingdom from the European Union (31 December 2020).
By extending some of the measures of Decree Law 22/2019, this article includes rules for a correct and orderly management of the change from a regime founded on the principle of mutual recognition in a European context to the one that is applicable to third-country firms, with the aim of ensuring both continuity in the performance of banking, investment, electronic money and insurance services and adequate forms of consumer protection for the customers of firms established in the United Kingdom and operating in Italy.
The provisions relating to the intermediaries that are under the jurisdiction of the Bank of Italy are set out below (consult the Consob website for investment firms and the IVASS website for insurance companies).
Specifically, Article 22 envisages that banks established in the United Kingdom and operating in Italy and electronic money institutions established in the United Kingdom and operating with a branch in Italy - provided that they have submitted, by the date when the Decree Law comes into force, an application to be authorized as third-country firms, though such authorization has not yet been granted or refused - can continue the activities or services they were already providing before the end of the transition period, up until the authorization is issued and in any case for no longer than six months after the end of the transition period. Operations are only allowed for activities for which authorization has been requested and are limited solely to the management of existing contracts. New clients cannot be acquired and existing contracts cannot be modified. 'Life-cycle event' activities are allowed, however, for existing 'over the counter' derivatives contracts.
In addition, the decree law specifies that banks operating without branches, under the freedom to provide services, cannot provide investment services to retail customers, as defined in Article 1, paragraph 1, letter m-duodecies, of the Consolidated Law on Finance (TUF), or to professional clients upon request, as identified under Article 6, paragraph 2-quinquies, letter b), and paragraph 2-sexies, letter b) of the TUF.
In the period of limited operations up until the granting of authorization and in any case no later than six months after the end of the transition period, UK banks and UK electronic money institutions with a branch are subject to the national law applicable to third country intermediaries and to the supervision of the competent Italian authorities, which exercise the powers envisaged with regard to third-country firms.
Furthermore, during the same period, UK banks and UK electronic money institutions with a branch will continue to adhere to the Italian alternative dispute resolution system (Banking and Financial Ombudsman, ABF) and UK banks with a branch will adhere by law to Italian deposit guarantee systems (DGSs) according to their respective Statutes. Nevertheless, banks operating under the freedom to provide services are not required to adhere to the ABF, provided they adhere to or are subject to a foreign out-of-court settlement system which is part of the Fin-Net network promoted by the European Commission; they are obliged to communicate to the Bank of Italy to which foreign out-of-court settlement system they adhere or are subject.
Within three months of the day following the transition period, UK banks will have to contact the appropriate DGS and to do what is necessary to finalize their participation, including fulfilling the obligation to pay contributions. To allow depositors to find out which DGS is responsible for protecting their savings, all the above-mentioned banks will have to provide their depositors with the information envisaged by Article 3 of Legislative Decree 30/2016 as soon as possible, and in any case no later than forty days after the day following the end of the transition period. The communication to depositors shall be in clear and plain language, and depositors will also have to be made aware of whom they can contact to request further information or clarifications.
In the event that authorization is refused, UK banks and UK electronic money institutions operating with branches must cease those activities for which they have received no authorization as quickly as possible, and in any case no later than three months from when they were informed of such a refusal, in such a way and in a time frame that will not jeopardize customers. Also in this period they will continue to be subject to the provisions applicable to third-country firms and to the relative powers of the supervisory authorities; the safeguards represented by the alternative dispute resolution systems and by the Italian deposit guarantee systems and the information requirements set out above are also ensured.
UK banks and UK electronic money institutions operating with a branch must provide adequate information to clients on the effects of Brexit on existing contractual relations (Article 22, paragraph 5).
Finally, the decree envisages some specific provisions for contractual relations in the event of refused authorization and for intermediaries that must cease their activities. The latter include the firms that cannot be authorized to operate as third country firms (namely fund managers, electronic money institutions operating under the freedom to provide services or with points of contact or networks of agents, and payment institutions) and those that have not submitted an application for authorization by the date on which the decree comes into force (for the effects of the end of the transition period envisaged by the Withdrawal Agreement, see the Bank of Italy's Communications of 29 April 2020 and of 15 December 2020).
Specifically, Article 22, paragraph 5 of the decree states that UK intermediaries that cease their activity at the end of the transition period or that are refused authorization, even partially, must return cash, goods and financial instruments to clients, according to the instructions received by those same clients. Lastly, with regard to loans, the ceasing of activity entails no change to the time frame or modalities for the payment of interest and the repayment of capital by clients, without prejudice to the client's right to make early repayment.
 UK fund managers must cease all activities at the end of the transition period: the reference in the decree to investment services provided serves to describe the scope of the application of the obligation to repay clients.