Fineco Bank one of Italy’s largest online trading firms announced on Friday that it will close its UK operations ahead of a regulatory deadline in December.
Why is Fineco Bank closing its UK business?
Fineco Bank will close its UK operations ahead of a regulatory deadline in December.
Fineco which is based in Italy currently operates under a temporary regulatory framework that was bought in the aftermath of Brexit, to allow qualifying European firms to continue to operate in the UK.
The expectation was that a deal between the UK and the EU would be in place before the temporary framework’s grace period expired.
However, that hasn’t been the case and negotiations between the two sides over a financial services deal seem to have made little progress on key issues such as regulatory equivalence.
In a statement, Fineco Bank said that:
The decision to quit the country (UK) “is driven by the significant change in the regulatory landscape in the UK, after its exit from the European Union,”
“In the new context, it would not have been possible anymore to maintain a capital-light business model leveraging on Fineco Italian infrastructure.”
Before Brexit Fineco operated in the UK under a regulatory passport allowing it to be regulated and domiciled in Italy, under the oversight of the Italian central bank, with only limited supervision from the UK FCA.
Will Fineco’s UK clients have to close their accounts?
Going forward Fineco will no longer be able to offer banking or brokerage services to clients domiciled in the UK.
Fineco has written to its clients about its plan, and what it calls a gradual wind-down of its operations in the UK. The firm says that it will be business as normal for now and that it will write to clients again, in the next few months regarding the account closure process.
The broker has provided clients with a Q&A which contains details of how to begin the process of transferring assets held in ISA accounts, the Q&A also provides clients with a link to an account closure form and two dedicated telephone support lines and an email address.
This a disappointing but predictable turn of events post-Brexit, and is a direct result of the intransigence of officials and regulators on both sides of the channel. Who seem more interested in making a land grab for key areas of business, than in negotiating a mutually beneficial agreement on the provision of cross-border financial services between Britain and the EU.