On 30 January 2020, the ratification of the agreement for the United Kingdom's withdrawal from the European Union (EU) was concluded. As of 1 February 2020, the United Kingdom is no longer a member of the European Union, but the Agreement provides for a transition period up until 31 December 2020 (unless it is extended), during which EU legislation will continue to apply to the United Kingdom, also as regards access to the financial services market. In this period, the European Union and the United Kingdom will negotiate an agreement on their future bilateral relations, the broad outlines of which are set out in the political declaration accompanying the Withdrawal Agreement.
On 29 March 2017, the United Kingdom notified the European Union of its intention to withdraw from the Union (Brexit). The EU and the UK then engaged in complex negotiations and finally reached an agreement on 17 October 2019. On 29 October 2019, the European Council extended to 31 January 2020 the deadline set by Article 50 of the Treaty on the European Union for completing the withdrawal (the original deadline was 29 March 2019, two years after the notification of withdrawal, subsequently extended first to 12 April and then to 31 October).
The ratification ensures an orderly UK withdrawal from the EU, thereby avoiding a cliff-edge scenario in the bilateral relations between the EU and the UK on 31 January. EU and Italian authorities and institutions had in any case worked on ensuring adequate preparation for a possible no-deal Brexit. In Italy, contingent transitional measures to ensure the operational continuity of intermediaries and markets in the event of a no-deal Brexit were contained in Chapter II, Section I of Decree Law 22 of 25 March 2019, subsequently converted into law and amended by Parliament (Law 41 of 20 May 2019, published in the Gazzetta Ufficiale of 24 May 2019). These measures will not be applicable owing to the ratification of the withdrawal agreement.
Documents by the Bank of Italy
The Bank of Italy has published a Communication which summarises the relevant features of the Italian third-country licensing regime, which will apply to all UK intermediaries once the transition period has ended, and urges all UK intermediaries operating in Italy to duly inform their clients about the actions they have taken in relation to Brexit and its consequences for existing contractual relationships:
- Communication containing instructions for UK intermediaries pursuant to the Withdrawal Agreement (29 April 2020).
In August 2019, the Bank of Italy signed a Memorandum of Understanding with the United Kingdom's supervisory authorities that will ensure an adequate level of cooperation and an exchange of information between the authorities when, at the end of the transition period, EU legislation will no longer apply to the United Kingdom.
- Memorandum of Understanding between the Bank of Italy, the Bank of England/Prudential Regulatory Authority and the Financial Conduct Authority.
The Bank of Italy has called on British financial institutions operating in Italy to inform their Italian clients about the actions they have taken in relation to Brexit and its consequences for existing contractual relations. These institutions should continue to keep their Italian clients adequately informed during the transition period.
- Information to be provided to Italian customers by UK-based financial institutions operating in Italy (19 February 2019).
Communications on a no-deal Brexit, no longer relevant or applicable, are available here.