Fineco Bank Sets Final Dates for UK Wind-Down

Fineco Bank, one of Europe’s largest stock brokers is bidding farewell to the UK. The Italian bank wrote to clients this week to remind them that the firm would restrict activities on clients’ accounts starting in late November.

The bank decided to withdraw from the UK market, post-Brexit, despite having initially continued to operate here under the FCA’s Temporary Permissions Regime or TPR.

However, ultimately Fineco switched to the Financial Services Contracts Regime, under which it could no longer engage in new business activities.

Britain’s decision to leave the EU, without ensuring that equivalence in financial services formed part of the exit agreement, meant that Fineco bank, which is regulated in Italy, could no longer passport its services into the UK market. It appears that the bank did not wish to set up a UK-regulated entity to enable it to continue operating here.

Fineco has been winding down activities on its client’s trading accounts since the end of January 2024. For example, no new derivative or CFD trading positions could be opened on client accounts after February 16th, and purchase orders on ISA accounts, held at the firm, were no longer permissible after the 5th of April.

The final cutoff will be on November 29th when Fineco will close any remaining open CFD positions, and debit card transactions will be blocked, as will bank transfers into Fineco UK accounts.

The bank also notes in emails to clients that it will be able to suspend current accounts held at the bank, from December 2nd.

As of November 29th, all activities in Fineco UK trading accounts will effectively cease.

What action will Fineco UK clients need to take?

Clients have been asked to empty their accounts and transfer any assets to accounts held at other providers.

Account holders should be aware that asset transfers could take a few days to action. That suggests that clients should act well ahead of the deadlines if they haven’t made appropriate arrangements already.

ISA assets will also need to be transferred from Fineco UK to another ISA provider.

Fineco also gave clients links to a dedicated Q&A section on its website, and an email address for its customer support team should they have any questions or queries that need resolving.

The landscape of European financial services has been severely disrupted by Brexit, UK firms can no longer service European clients from UK entities and, nor can firms that are regulated in Europe act for UK customers.

There has been some thawing of relations between the UK and Europe, and back in January 2024, the UK government said that it would treat EEA regulations on fund management as the equivalent of its own. Opening the door for Europe’s fund managers to sell their products and services into the UK market, under the OFR or overseas fund regime.

However, there has been little or no movement in other areas of the market.