On 24 January 2019, the Ministry of Economic and Finance issued a press release to inform the market that the Italian Government is preparing the necessary measures to ensure the continuity of markets and intermediary business should a hard Brexit occur (i.e. exit with no deal). The press release is available at this link (in Italian).

The measures, which have been drafted after consulting with competent supervisory authorities and hearing relevant sectoral association, are aimed at ensuring financial stability, market integrity and business continuity as well as protecting investors and depositors, and more generally, clients. This aim would be achieved through an “adequate” transitional period where relevant persons may carry on their activities. The envisaged duration of such a transitional period has not been specified, yet.

During such a proposed transitional period, UK banking, financial and insurance entities (including entities operating in the context of secondary welfare) that passport into Italy before the UK exits the EU will be able to continue to provide their activities in Italy and vice versa (Italian entities in UK; obviously, this would be subject to UK laws and regulations, as well).

As for the content, the measures are expected to discipline inter alia:

a) the requirements to be met under sectoral legislation to carry on business after the transitional period, so as to ensure a stable legal framework to which entities can gradually get used to;

b) the trading venues’ regime and operators’ access; and

c) investments by Italian pension funds in UK funds (the aim is allowing them to keep such UK investments in the transitional period)

To date, the measures, which need a law decree to be issued by the Italian Government to be enacted, have not yet been published. However, the Italian Government will ensure, given that the date of publication will depend on future developments and on decisions adopted within the UK, that the measures will be published in draft in advance to allow the orderly performance of activities in a certain legal framework, even in case of hard Brexit.

For the sake of completeness, this topic was also raised by the former Consob chairman (Mr Nava) who, during a public speech held on 10 September 2018 regarding the impact of Brexit on Italian market, mentioned that Consob was working – in the remit of what is set out under the existing Italian regulatory framework – to ensure that Italian trading venues could export their business in the UK (as well as in other extra–UE countries), and mentioned the possibility of adopting a “temporary permissions regime” – such as those already developed by the UK authorities – to let Italian trading venues permit UK entities trading on their facilities subject to certain conditions.

For further information, contact Salvatore Iannitti or Pietro Altomani