UK banks that want to shift operations to the continent after Brexit will encounter a six-month waiting period before receiving their operating licence.
The European Central Bank (ECB), which grants licences to banks that operate in the single currency zone, has said on its website that an application to operate in the Eurozone will be processed within six months. Banks will be assessed on their governance procedures, as well as their liquidity levels.
If the City loses its financial "passporting" rights, UK-based banks that relocate will need to win approval from the ECB. It is thought around 40 British-based groups will be affected if they do not gain access to the Single Market.
However, the ECB has said that groups wishing to apply for a licence in Europe could begin "preparatory discussions" to move the process along.
On its website, the ECB said: "The ECB and the national supervisors see value in having preparatory discussions with banks interested in establishing or increasing their presence within the euro area."
Tha bank said that discussions were encouraged "in order to ensure a smooth process".