National regulators across Europe are being urged to take a tougher line on City firms relocating after Brexit, as the bloc's markets watchdog finds more evidence that many are operating empty shells on the continent to meet new access rules.

Brexit put an end to the automatic 'equivalence' deal for City firms wanting to trade in the EU, forcing them to relocate and become authorised with national regulators in the bloc instead. However, an 8 December report from The European Securities and Markets Authority found that some firms relocated with only "limited technical and human resources in the EU".