UPDATE 1-Bank of England reassures finance companies on Brexit transition deal

LONDON, March 28 (Reuters) - The Bank of England said onWednesday finance companies operating in Britain will have moretime to meet a Brexit deadline, in a move aimed at avoiding apotentially disorderly shift of people and operations across thecontinent.

Britain and the European Union last week agreed a transitionperiod of 21 months that will follow Britain's departure fromthe bloc in March 2019 during which companies will haveunchanged access to the bloc's markets.

Many banks have said they will not be able to rely on such apolitical deal as it will not be formally ratified bygovernments until the autumn and any deal could collapse ifthere is domestic political upheaval in the months beforeBritain leaves.

In a letter to banks, the BoE sought to reassure companiesthat they can rely on the transition period to ease theiradjustment to Brexit.

Companies will be able "to plan that they will be able tocontinue undertaking these activities during the implementationperiod in much the same way as now," the BoE said.

It remains to be seen if European financial regulators willsay that British banks that do business in the bloc can use thetransition deal to take more time to get clearance for theiroperations in the EU.

Currently, banks such as Germany's Deutsche Bankand France's BNP Paribas and Societe Generaleoperate in Britain under EU 'passporting' rules whichare due to expire when Britain leaves the bloc.

The BoE said the government has committed to introducelegislation to allow firms to continue their activities for alimited period after leaving the the EU.

In the unlilkely event that the withdrawal deal is notratified this will provide a back-stop for companies to continuetheir operations, the BoE said.

Earlier this month, Britain's finance minister PhilipHammond said once the transition was agreed regulators shouldtell companies they can rely upon it.(Reporting By Andrew MacAskill and Alistair Smout; editing byStephen Addison and Richard Balmforth)