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Top stories
New intervention for the technological and digital transformation of SMEs
In order to strengthen the competitiveness of production systems and the technological development of less developed area, the Ministry for the Economic Development has recently regulated the procedures for granting loans to small and medium-sized enterprises (“SMEs”) to be used for adopting innovative investment schemes. The ultimate goal being the digital transformation through the use of enabling technologies identified in the national plan called “Industry 4.0”, as well as innovative solutions capable of making production processes more sustainable.
Patent vouchers for innovative start-ups
The Ministry for the Economic Development has recently established some criteria for assigning vouchers in favour of innovative start-ups that intend to retain IP lawyers for one or more of the following services:
- prior search and patentability of inventions;
- patent application to be filed with the Italian Patent and Trademark Office;
- application to be filed with third countries’ competent authorities in order to claim the priority of a previously filed national patent application.
New EU Directive on whistleblowing
A new EU Directive on whistleblowing has been recently published, which sets forth minimum standards for the protection of whistleblowers within the EU in specific areas, such as public procurement, financial services, products and markets, AML, product safety and compliance, transport safety, environmental protection, nuclear safety and radiation protection, food and animal health, public health, consumer protection, data protection and cybersecurity, protection of the EU financial interests and the EU internal market. The Directive must be implemented by EU Member States within 17 December 2021.
IAIS reforms on prudential supervision of insurance companies
In order to ensure an effective cross-border supervision of insurance groups and pursue the global financial stability, the International Association of Insurance Supervisors (“IAIS”) has recently adopted a comprehensive set of reforms, which includes:
- supervisory standards and guidance focusing on the effective group-wide supervision of Internationally Active Insurance Groups (“IAIGs”);
- the development of a common language for supervisory discussions on group solvency by IAIGs;
- assessment and consequent mitigation of systemic risks in the insurance sector, to be implemented from the beginning of 2020.
In execution of such reforms, the Financial Stability Board, in consultation with IAIS and national competent authorities (“NCAs”), has decided to suspend the Global Systemically Important Insurers (G-SII) identification, effective January 2020.
FSB’s press release of 14th November 2019, “FSB welcomes insurance holistic framework”.
Corporate/Laws of contract
New EU Directive on cross-border conversions, mergers and divisions
A new EU Directive on cross-border conversions, mergers and divisions was recently published (to be transposed within 31st January 2023), which provides for:
- new procedures for conversions and divisions;
- new rules on cross-border mergers of limited liability companies;
- procedures to verify the legality of operations and allow NCAs to block the transaction at issue if the latter is set up for abusive or fraudulent purposes;
- procedures to ensure employees’ participation;
- greater protection for minority shareholders and those with no voting rights;
- strengthening of creditors’ protection;
- the use of digital tools in the procedures relating to the disclosure of the project, the application for a pre-operation certificate and the submission of information and documents; as well as
- the use of the national registers interconnection system for sharing pre-operation certificates issued by NCAs.
On the liability of the quota-holders of a limited liability company
The quota-holders of a limited liability company are held jointly and severally liable with the directors of the same company for damages caused to the latter, as well as to other quota-holders or third persons for breach of their duties of correct administration, deriving from ad hoc decisions or authorisations of management deeds, except for the approval of yearly financial statements or ratification of directors’ actions during approval of the yearly financial statements.
Court of Appeal of Venice, decision no. 5219 of 21st November 2019.
Banking law
Update to the Bank of Italy’s Supervisory Provisions for banks
The Bank of Italy (“BoI”) has recently updated its Supervisory provisions for banks. The main amendments concern:
- authorisation procedures of Italian and third countries’ banks; and
- the authorisation application for the provision of investment services and activities in Italy by EU banks and by Italian banks in other EU Member States.
BoI’s guidelines on loans’ early redemption
Following a recent decision of the EU Court of Justice (issued on 11th September 2019; case C-383/18, known as the “Lexitor” case), the BoI has issued guidelines on consumer credit agreements, envisaging, inter alia, that, in consequence of the exercise of the early redemption right, a bank or a financial intermediary must ensure the reduction of the credit’s total costs, including all costs to be borne by their client, excluding taxes.
Communication from the BoI of 4th December 2019, “Consumer credit. BoI’s guidelines on loans’ early redemption”.
Non-executive directors’ duty to be informed
The duty to be informed, to be respected by non-executive directors, cannot be limited to a mere request for information to the Board, but must result in actual proposals to correct the issues faced by the company in question. In order to go exempt from liability, non-executive directors must ensure that their objection to organisational and management acts that do not comply with the principles of good administration or applicable banking regulations is clearly noted in the Board meeting’s minutes.
Financial law
EU Regulation on sustainability‐related disclosures in the financial services sector
An EU Regulation on sustainability‐related disclosures in the financial services sector has been recently published, which will entered into application from 10th March 2021 and lays down harmonised rules for financial market participants and financial advisers on transparency of sustainability risk policies, adverse sustainability impacts at entity and financial product level, promotion of environmental or social characteristics in pre‐contractual disclosures, as well as in periodic reports and on websites.
BoI’s Regulation in implementation of MIFID II
In implementation of Directive 2014/65/EU (“MIFID II”) and Regulation (EU) no. 600/2014 (“MIFIR”), the BoI has recently issued a new Regulation on the obligations of intermediaries providing investment services and activities, as well as collective asset management service, with regard to:
- corporate governance and general organisational requirements (including internal systems for reporting infringements);
- remuneration and incentive schemes;
- business continuity;
- administrative and accounting organization (including the establishment of compliance, risk management and internal audit functions);
- outsourcing of relevant operational functions; and
- deposit and sub-deposit of clients’ money and assets.
Bank’s liability in the sale of diamonds to clients
Where a client enters into a diamonds purchase agreement upon proposal of his/her bank acting as an intermediary, the bank’s liability is measured on the correct fulfillment of information or client protection obligations, as well as on the classification of the sale of diamonds among the activities related and instrumental to the banking one. Among others, the bank must prove to have correctly complied with its obligation to identify the real value of the diamonds in the total sale price.
Civil Court of Mantova, order of 19th November 2019.
Intermediary’s liability for infringement of MIFID obligations
With regard to financial intermediation, the chain of causation between incorrect or omitted information and damages suffered by the client that claims for damages can be presumed, unless the breach of disclosure obligations at issue is marginal and of minor importance. The intermediary is not liable when it can prove that the client would have made the investment even if the MIFID obligations in question had not been breached.
Court of Appeal of Milan, decision of 5th February 2019.
Financial services/FinTech
ROFIEG recommendations on Innovative technologies
With the aim of creating an accommodating framework for FinTech, the Expert Group on Regulatory Obstacles to Financial Innovation set up by the European Commission in June 2018 (the “ROFIEG”), has recently published a report, having as object:
- innovative use of technology in finance;
- maintenance of a level playing field in the sector;
- access to data and data protection;
- financial inclusion; and
- impact of Fintech on final consumers.
Compliance
Legislative Decree no. 231/2001
Guidelines on GDPR’s territorial scope
The European Data Protection Board (“EDPB”) has just adopted the final version of its guidelines on the territorial scope of Regulation 2016/679/EU of 27th April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data (“GDPR”), providing for a definition of “establishment criterion”, “targeting criterion”, as well as “processing in a place where national law applies by virtue of public international law”, expressly referred to in Article 3 of the GDPR itself.
EDPB, guidelines no. 3/2018 on the territorial scope of the GDPR (Article 3), of 16th November 2019.
Nullity of the clause infringing privacy provisions
The clause whereby transaction of transactions requested by the client is subject to the latter’s necessary consent to the processing of sensitive data that are not adequate and relevant to the purposes for which the data themselves were collected or processed is null and void on the ground of infringement of a mandatory law provision. Consequently, in case of freezing of current account and securities deposit in execution of the above clause, the bank may be held liable for damages suffered by the client for breach of contract.
Capital Markets
Amendments to the Issuers Regulations under public consultation
The Commissione Nazionale per la Società e la Borsa (“Consob”) has recently launched a public consultation (which will end on 10th January 2010) on the amendments to be made to the Issuers Regulations (Resolution no. 11971 of 14th May 1999, as amended) concerning the admission to trading of reserved open-ended alternative investment funds (“AIFs”), as well as fine-tuning measures concerning AIFs’ marketing and advertising activities. The proposed amendments are intended to:
- establish when a prospectus is required, or when, if there is a prospectus drawn up in accordance with laws of another EU Member State, it is sufficient to submit a listing document instead;
- coordinate the national rules governing AIFs’ listing and marketing;
- review the content of the prospectus and listing document schedule in order to make them applicable also to reserved open-ended AIFs;
- update the information that undertakings for collective investment in transferable securities (UCITS) admitted to trading on a regulated market are required to make available through publication on the website of the fund and market manager at issue.
Consob, Consultation Paper, “amendments concerning the admission to trading of reserved open-ended Alternative Investment Funds (AIFs), as well as further fine-tuning measures concerning the marketing of AIFs and advertising activities” of 9th December 2019 (text available in Italian only).
Procedural law
On the test of evidence for simple presumption to be applied for insider trading
In the procedure for simple presumptions, evidence of insider trading must be grounded on a known fact constituting historical evidence, whereas it will not be possible to rely on a fact previously proven on a presumptive basis.
Court of Appeal of Brescia, decision no. 1766 of 5th December 2019.
The Court’s specialised business sections are not competent on financial intermediation
The specialised business sections of Civil Courts are competent to settle disputes in which there is a direct link with company relations and shareholdings, whilst the disputes between investors and intermediaries for the recovery of undue payment, as well as damages, do not fall within the competence of such sections. To this end, are not relevant the purchases having as object shares issued by the same intermediary, that has proposed the investment transaction to the client.
Court of Cassation, Sec. VI, order no. 30622 of 25th November 2019 (text available in Italian only).
The civil judge’s jurisdiction on the BoI’s administrative sanctions
With regard to the appeal against BoI’s sanctionary measures, the civil judge is competent to rule on disputes relating not only to the sanctionary measure at issue, but also to the acts or regulations that are at the base thereof.
Joint Chambers, decision no. 24609 of 2nd October 2010 (text available in Italian only).