UK financial firms hoping to avoid any Brexit aftershocks by setting up a 'letterbox' office on the continent will not get away with it, the EU securities watchdog has warned.

Businesses across the City are looking at how they can minimise the impact of a hard Brexit, which would see UK firms lose the ability to service clients in the EU, by setting up licensed hubs overseas.

However the European Securities and Markets Authority (ESMA) on Wednesday listed nine conditions firms should meet if they want to do so, sending a clear message that firms will not be able to side-step the rules.

In a move to crack down on shell or 'letterbox' hubs, the watchdog said EU countries - which are currently competing to attract UK financial firms post-Brexit - need to be wary of offices that still have critical functions in London.