Read Italy’s latest developments in Payment and Banking Service.
Corporate governance: amendments to the Bank of Italy’s Circular No. 285
(Circolare n. 285 del 17 dicembre 2013 «Disposizioni di Vigilanza per le banche» – 35° aggiornamento – Governo societario: recepimento dell’articolo 88, paragrafo 1, capoversi 4 e 5, della direttiva (UE) 2013/36 (CRD), come modificata dalla direttiva (UE) 2019/878, in materia di prestiti agli esponenti e alle loro parti correlate)
On 30 June 2021, the Bank of Italy issued amendments to Circular No. 285 of 17 December 2013 on “Supervisory provisions for banks” (the “Circular No. 285“). In particular, these amendments replace Part First, Title IV, Chapter 1, of Circular No. 285, on corporate governance requirements, and aim at aligning Circular No. 285 with the provisions of Directive (EU) 2019/878 of 20 May 2019 (the “CRD V“). These amendments include, inter alia:
- a new threshold for the application of the definition of bank of minor dimension or operational complexity, which has been increased from EUR 3.5 billion to EUR 5 billion of assets, calculated as an average with reference to the 4 precedent fiscal years;
- a minimum gender quota equal to the 33% of the members of the administrative and control bodies of banks;
- the duty for the corporate bodies with strategic supervision functions of banks to adopt professional conduct rules applicable to the personnel of banks, also by adopting an ethical code or similar tools;
- the duty for banks of major dimension or operational complexity (i.e., (i) significant banks subject to the direct supervision of the European Central Bank, (ii) listed banks, and (iii) those which resulted as banks of major dimension or operational complexity adoption on the basis of an evaluation procedure) to adopt a policy on the communication between the directors and the shareholders of banks;
- the duty for the corporate bodies with strategic supervision functions of banks to take into account, amongst other things, (i) the adoption of business models, applications, processes or products connected with the offer of high technological financial services (Fintech) and (ii) the sustainable finance targets, in particular the environmental, social and governance (ESG) factors, for the purpose of determining the corporate strategies of banks;
- the obligation to keep data on loans to members of the management body of the bank and their related parties, in order to make them available to the Bank of Italy upon request.
- 30 June 2021: adoption of the amendments to Circular No. 285;
- fifteenth day as of their publication on the Official Journal of the Republic of Italy (Gazzetta Ufficiale): entry into force of the amendments to Circular No. 285;
- by 6 months as of the entry into force of the amendments to Circular No. 285: banks must comply with the amendments;
- no later than the shareholders’ meeting approving the financial statements for fiscal year 2021: adoption of any required change to the By-Law of the bank;
- by one month as of the shareholders’ meeting resolution (see point 4. above): adoption of the relevant implementing acts.
Gender quotas focus
On the first complete renewal of the bodies after 1 January 2022, and in any case by no later than 30 June 2024, the minimum gender quota of the members of the administrative and control bodies of banks must be implemented.
On the first complete renewal of the corporate bodies, banks of minor dimension or operational complexity apply a minimum gender quota equal to the 20% of the members of the administrative and control bodies, while for subsequent renewals (and in any case, no later than 30 June 2027) they apply the ordinary 33% quota.
Transparency: amendments to the Bank of Italy’s Provision on transparency
On 30 June 2021, the Bank of Italy issued an order (the “Order“) which introduced amendments to the Bank of Italy’s Provisions on transparency of banking and financial transactions and services (the “Bank of Italy’s Provisions on Transparency“). In particular, the Order aims at transposing the obligation to inform consumers of their rights by making them available an user-friendly leaflet, listing in a clear and easily comprehensible manner their rights, pursuant Article 106 of Directive (EU) 2015/2366 of 25 November 2015 (“Payment Services Directive 2“).
The Order will enter into force on the day of its publication on the Official Journal of the Republic of Italy (Gazzetta Ufficiale), and the recipients will need to comply with the information obligation by the subsequent three months.
IFRS: consultation on amendments to the Bank of Italy’s Circular No. 262 and the Bank of Italy order of 30 November 2018
(Documento di consultazione sulla Circolare n. 262 del 22 dicembre 2005 “Il bilancio bancario: schemi e regole di compilazione” e sul Provvedimento della Banca d’Italia “Il bilancio degli intermediari IFRS diversi dagli intermediari bancari” del 30 novembre 2018)
On 22 June 2021, the Bank of Italy launched a public consultation concerning amendments to the Bank of Italy’s Circular No. 262 of 22 December 2005 on “Financial statements of banks: drafting templates and rules” and the Bank of Italy order of 30 November 2018 on “The financial statements of the IFRS intermediaries other than banking intermediaries”. The proposed amendments aim at aligning the financial statement notice of certain categories of financial activities with the consolidated harmonized supervisory financial reports (FINREP), as well as at transposing the notice on financial instruments required by IFRS 7, as amended by the reform of the benchmarks for determining the interest rates.
The deadline for the submission of observations is set at 21 August 2021.
Risk central: clarifications on the treatment of the measures introduced by the Support Decree bis
(Comunicazione dell’11 giugno 2021 – Proroghe delle misure di sostegno – Decreto Legge “Sostegni bis” (D.L. n. 73 del 25 maggio 2021) – Precisazioni in materia di segnalazioni alla Centrale dei rischi)
On 11 June 2021, the Bank of Italy published a communication on the treatment of the support measures for companies introduced by Article 56, paragraph 2, of Law Decree No. 18 of 17 March 2020, converted, with amendments, into law by Law No. 27 of 24 April 2020, and extended pursuant to Article 16 of Law Decree No. 73 of 25 May 2021 (the “Support Decree bis“) for the purposes of their classification in the Risk central. In particular, any entity which required the extension of the support measures pursuant to Article 16 of the Support Decree bis cannot be classified as defaulting for all the period of validity of the measures.
CoRep: Bank of Italy instructions to financial intermediaries
On 28 May 2021, the Bank of Italy published a communication providing guidance to financial intermediaries pursuant to Article 106 of Legislative Decree No. 385 of 1 September 1993 (the Italian Consolidated Banking Law) on their prudential supervisory reporting (CoRep) obligations. In particular, the Bank of Italy explained the reporting obligations (i) in connection with securitization transactions, and (ii) for prudential supervision purposes provided by Title IV, Chapters 1, 3, 4, 5, 6, 13 and 15 of the Bank of Italy’s Circular No. 288 of 3 April 2015 on “Supervisory provisions for financial intermediaries”.
Supervisory reporting: amendments to several Bank of Italy’s Circulars
On 25 May 2021, the Bank of Italy issued the updated versions of several Bank of Italy’s Circulars:
- Circular No. 272 of 30 July 2008 on “Account matrix”;
- Circular No. 217 of 5 August 1996 on “Handbook for the compiling of the statistical and supervisory reports for financial intermediaries, payment institutions and electronic money”;
- Circular No. 189 of 21 October 1993 on “Statistical and supervisory reporting handbook for the undertakings for collective investment of savings”;
- Circular No. 154 of 22 November 2021 on “Supervisory reporting of credit and financial institutions. Survey templates and instructions for the submission of information flux”;
- Circular No. 148 of 2 July 1991 on “Statistical and supervisory reporting handbook for securities market intermediaries”;
- Circular No. 115 of 7 August 1990 on “Instructions for preparing supervisory reports on a consolidated basis”.
The amendments aim at aligning the supervisory reports with (i) the supervisory reports harmonized at EU level, also introducing new micro and macro-prudential surveys, and (ii) the new Italian corporate crisis and insolvency law introduced by Legislative Decree No. 14 of 12 January 2019 (the Italian Code of corporate crisis and insolvency).
Payment services: new version of the information sheet of the Centrale d’allarme interbancaria
On 6 May 2021, the Bank of Italy issued an updated version of the information sheet relating to the central archive of irregular checks and payment cards (Centrale di allarme interbancaria). The information sheet illustrates the:
- applicable legal framework;
- purpose of the central archive;
- reporting entities;
- data stored in the central archive;
- treatment of personal data;
- methods for accessing and consulting the data; and
- procedure for correcting and cancelling the data.
Supervision: Bank of Italy’s provisions on the fitness and propriety assessment of corporate representatives and individuals in charge of the main corporate functions
(Disposizioni di vigilanza in materia di procedura di valutazione dell’idoneità degli esponenti di banche, intermediari finanziari, istituti di moneta elettronica, istituti di pagamento e sistemi di garanzia dei depositanti)
On 5 May 2021, the Bank of Italy issued the Supervisory provisions on the fitness and propriety assessment of corporate representatives and individuals in charge of the main corporate functions of banks, financial intermediaries, electronic money institutions, payment institutions and deposit guarantee schemes (the “Bank of Italy’s Provisions“). The Bank of Italy’s Provisions implement the Decree of the Ministry of Economy and Finance No. 169 of 23 November 2020 (the “MEF Decree“), which introduced stricter reputation, professional and independency requirements, characterized by objectivity, and the new category of suitability criteria for corporate representatives and individuals in charge of the main corporate functions, which are subject to discretionary assessment, including decency, expertise, availability of time and limitation of other charges. The Bank of Italy’s Provisions provide for procedural matters of the fitness and propriety assessment of candidates in case of:
- appointment of corporate representatives by the shareholders’ meeting;
- appointment of corporate representatives not by the shareholders’ meeting and appointment of individuals in charge of the main corporate functions;
- appointment of the deputy members of the control body;
- assumption of additional non-executive tasks by corporate representatives;
- occurred events and renewals; and
- suspensions from the office.
The Bank of Italy’s Provisions entered into force on 1 July 2021. They are applicable to:
- appointments made as of 1 July 2021;
- appointments made between the entry into force of the MEF Decree (i.e., 30 December 2020) and 1 July 2021, in relation to the events considered in items (iii), (iv), (v) and (vi) above, if they occur after 1 July 2021.
After the entry into force of the Bank of Italy’s Provisions several regulatory provisions were repealed, namely:
- Title II, Chapter 2, of the Bank of Italy’s Circular No. 229 of 21 April 1999 on “Supervisory instructions for banks”;
- the Bank of Italy’s order of 1 December 2015 on “Requirements of corporate representatives of banks and parent companies of banking group. Assessment procedures”;
- Title II, Chapter 2, of the Circular No. 288, with the exception of Attachments A, C and D and of the indication reported in Title II, Chapter 2, Section I, paragraph 4, regarding the administrative procedure for the declaration of relinquishment for breach of the ban of cross participation in competitor financial intermediaries or financial groups (so-called interlocking);
- Chapter III, Section IV, with the exception of the references to the interlocking ban, and Chapter III, Section V, limited to the administrative procedures relating to the relinquishment in case of lack of suitability and to the suspension of corporate representatives, of the Supervisory provisions for payment institutions and electronic money institutions.