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Top stories
Law Decree on Tax wedge
In order to reduce the tax burden on employees and extend the number of people who receive the so-called “Irpef bonus” (i.e., a relief on the tax on individual’s revenue), new provisions have been recently introduced which envisage that, effective 1st July 2020, public and private employees can benefit from:
- a monthly bonus of 100 Euro, if their annual gross income does not exceed 28,000 Euro; and
- a pay packet tax deduction in case of annual income higher that 28,000 Euro, but lower than 40,000 Euro.
On the launch of the National Innovation Fund
To accelerate the growth of the Italian venture capital ecosystem, Cassa Depositi e Prestiti (a joint-stock company under public control; whose acronym in Italian is “CDP”) has recently announced the launch of a National Innovation Fund managed by CDP Venture Capital SGR, which is aimed at:
- expanding direct and indirect investment in start-ups companies;
- promoting the creation of new investment instruments in order to facilitate the active involvement of Italian companies in corporate venture capital projects;
- facilitating the connection between investors and start-ups; and
- fostering a dialogue between the latter and firms in which CDP Group has an interest.
Innovative start-ups: the new “Smart&Start Italia”
In order to promote the development of innovative start-ups in the whole national territory, the Ministry of Economic Development has recently issued a circular, which defines timing and modalities for the submission of applications for the “Smart&Start Italia” grants for the purpose of financing the production of goods and exchange of services with a high technological and innovative content. Effective 20th January 2020, the related applications can be filed on the national agency for the attraction of investments and undertakings’ development (Agenzia nazionale per l’attrazione investimenti e lo sviluppo di impresa; “Invitalia”)’s website.
Corporate/Laws of contract
Consob’s interpretative clarifications on gender quotas
By means of Budget Law for 2020 and in the context of the conversion into law of the Tax Decree, a new provision on gender quotas has been recently introduced, on the basis of which listed companies’ management and control bodies must be composed, for at least two-fifth, of member of the less represented gender. In this regard, the Commissione Nazionale per la Società e la Borsa (the national financial markets authority; “Consob”) has clarified that, in case of a body belonging to one of the above categories is composed of three members only, the afore-said prescribed ratio should be rounded down (and not up, as currently envisaged under the Issuers Regulations). In order to update the latter, a public consultation has been launched by Consob, which will end on 16th March 2020.
Consob’s Communication no. 1 of 30th January 2020 (text available in Italian only); and Consultation Paper of 23rd January 2020 (text available in Italian only).
New Corporate Governance Code for listed companies
The Italian Corporate Governance Committee, established at Borsa Italiana S.p.A. (the Italian Stock Exchange’s managing company), has recently published the new Corporate Governance Code, which will apply to listed companies starting from the first financial year following 31st December 2020. The underlying goal is to promote the adoption of sustainability strategies and a dialogue with the market through engagement policies, as well as to encourage the listing of SMEs and/or companies with a highly-concentrated ownership.
Nullity of a loan agreement granted by a cooperative bank
The loan agreement granted, even partially, by a cooperative bank (in the case at issue, Banca Popolare di Vicenza) to a client for the purchase of the former’s own shares is null and void, for it breaches Article 2358 of the Italian Civil Code on the prohibition of financial aid provided by.
Court of Udine, decision of 8th January 2020.
Banking law
Bank of Italy’s provision on the client’s suitable verification and data storage
The Bank of Italy (“BoI”) has recently issued a provision on the client’s suitable verification and data storage for anti-money laundering, which applies only to the processing of euro notes by non-financial operators. The latter must adopt specific measures whose frequency and extent is graduated to the level of anti-money laundering risk relating to each client.
Published the results of the Supervisory Review and Evaluation Process
The European Central Bank (“ECB”) has recently published the results of its Supervisory Review and Evaluation Process (“SREP for 2019”), which shows that Common Equity Tier 1 (CET1) capital remained stable (i.e., at the same level of 2018). For the first time ever, ECB has provided therein for aggregate data by business model and bank-by-bank information on the so-called Pillar 2 requirements, pointing out that the overall level of capital adequacy of the significant financial institutions under its supervision is satisfactory, even if some concerns remain with regard to their business models, internal governance and operational risks.
Updated EBA’s Guidelines on fraud reporting in payment services
The European Banking Authority (“EBA”) has recently updated its Guidelines setting out requirements on how fraud data should be reported by all payment service providers, as well as by the national competent authorities, so as to ensure that card-based payments are reported in compliance with the European Commission’s clarifications on the application of requirements on strong customer authentication (“SCA”). In particular, two additional data fields have been introduced for reporting transactions where SCA does not apply.
The nullity of the loan for exceeding the limit of financing
With regard to a mortgage loan, the limit of financing referred to in Article 38, paragraph 2, of Legislative Decree no. 385 of 1st September 1993 (the Consolidated Banking Act), which is fixed by the BoI on the basis of the value of the mortgaged assets or the cost of the works to be carried out on the afore-said assets in order to encourage the mobilization of real estate and facilitate the entrepreneurial activity, constitutes an essential element of the contract, with the consequence that the lack of compliance with such element determines the nullity of the loan.
On the report of non-performing loans to the Central Credit Register
A bank may report a non-performing loan to the Central Credit Register, if, regardless of the mere delay in payment of the debt or the voluntary default of the same, it ascertains that the client is in a default financial situation or in serious and non-temporary economic difficulties, even if the latter do not coincide with the condition of incapacity and insolvency typical of the bankruptcy regime.
Civil Court of Cassation, decision no. 31921 of 6th December 2019 (text available in Italian only).
Financial law
ESMA’s strategy on sustainable finance
The European Securities and Markets Authority (“ESMA”) has published its strategy on sustainable finance, which sets out how it will place sustainability at the core of its activities, by embedding the environmental, social, and governance factors (so-called “ESG”) in its work. In such strategy, there are highlighted some key priorities that include transparency obligations, risk analysis on green bonds, ESG investing, convergence of national supervisory practices on ESG factors, taxonomy, and supervision.
ESMA’s Strategy on Sustainable Finance of 6th February 2020.
Resolution of swap contracts
Statements given by a bank’s client within a framework agreement are not suitable to outline either the client’s financial situation or his/her status as professional investor, for such agreement is represented by general terms and conditions provided by the bank. Consequently, if the latter has failed to inform the client of the swap’s underlying risks, the afore-said framework agreement and the actual swap contract can be terminated on the ground of the bank’s serious breach of the agreement, for it can be assumed that a properly informed client would not have been exposed him/herself to the risk of losing, in whole, the capital invested.
Court of Appeal of Cagliari, decision no. 5 of 9th January 2020.
Recent case-law on “selective nullity” of investment contracts
The general principles established by the Jointed Chambers of the Supreme Court have been applied in some recent decisions having as object the possibility for the intermediary to oppose the exception of good faith to the client, in case the latter claims the nullity of specific purchase orders of financial instruments (the so-called “selective nullity”), causing an unjustified damage to the intermediary itself. In particular, it has been specified that:
- such exception cannot be raised ex officio;
- it may be raised even in the absence of a framework agreement or if the client’s signature is apocryphal; and
- the selective nullity can be also ratified by the client by means of conclusive facts, since it is provided for its own protection.
Securities and Financial Ombudsman, decision no. 2127 of 8th January 2020.
Court of Appeal of Lecce, decision no. 282 of 30th December 2019.
Compliance
Data protection
Final report on Big Data
For the purpose of monitoring the growing role of data in the production and exchange of goods and services, the final report on “Big Data” survey conducted jointly by the national authorities competent for communications, competition and data protection has been recently published, which contains some remarks on the impact of such data on the electronic communications and media sector, protection of personal data, as well as on consumer protection and antitrust law. In addition, the afore-said authorities have issued some guidelines addressed to the law-maker, committing themselves to establish a permanent cooperation table for monitoring the impact of big data on companies, consumers and citizens, at large.
Anti-money laundering
In consultation the amendments to the guidelines on risk factors
EBA has recently issued a public consultation on the European Supervisory Authorities (“ESAs”)’s Guidelines on AML risk factors, which will end on 5th May 2020. The main novelties concern the introduction of new guidance having as object:
- how to comply with the provisions on enhanced customer due diligence related to high-risk third countries;
- crowdfunding platforms, corporate finance, payment initiation services providers (PISPs) and account information service providers (AISPs), as well as currency exchange firms.
EBA’s Consultation Paper of 5th February 2020.
Capital Markets
Recent amendments to Consob Regulation on crowdfunding
Among the main amendments recently introduced to the Regulation on the raising of capital through online portals (the so-called “Crowdfunding Regulation”), it is worth pointing out the elimination of the mandatory participation in a compensation scheme that portal managers had to meet in order to enter the ad hoc Register kept by Consob. Therefore, it remains in place the obligation on the already authorised portal operators to activate an adequate insurance policy by 1st July 2020.
Corporate criminal law
The prohibition on double penalties (“ne bis in idem”) must be observed even if the one applied in the criminal proceeding has been suspended
In the market abuse field, the provision whereby, should criminal and administrative charges apply for one and the same offence, the pecuniary sanction to be imposed for such offence must be limited to the part exceeding that already applied by the administrative authority, does not avoid the infringement of the ne bis in idem principle – whereby sanctions cannot be imposed twice for one and the same illicit conduct –, where the above combination of charges includes also a conviction. Therefore, it is left to the competent judge to assess the proportionality of the imposed penalties with the seriousness of the offence committed, even if the penalty in the criminal proceedings has been suspended.
Milan Court of Appeal, decision of 22nd May 2019.
Procedural law
Securitisations: the assigned debtor cannot raise exception to the assignee creditor concerning the relationship with the assignor
Credit receivables that are object of a securitisation transaction constitute segregated assets from the SPV’s one. Indeed, the latter being exclusively destined to satisfy the rights incorporated in the securities issued to finance the purchase of the receivables, as well as to pay the transaction’s costs, with the result that the assigned debtor cannot raise to the assignee creditor any exception relating to a set-off or a counterclaim based on the receivables he/she could claim against the assignor.