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The so-called “August Decree” entered into force
The so-called “August Decree” has, among others, (i) extended to ailing companies at 31st December 2019 State aid provisions introduced by the Relaunch Decree (see our NL of July 2020), (ii) refinanced the Guarantee Fund for SMEs, (iii) extended to 31st January 2021the moratorium on loans, (iv) granted to SGRs the possibility to benefit from an extension of the subscription period for further 3 months (and until 31st December 2020), for the purpose of allowing Italian reserved AIFs to complete the subscriptions round, and (v) granted to investors the possibility to allocate sums or assets, not exceeding 300,000.00 Euro per year and 1,500,000.00 Euro in total to alternative investment savings plans (in Italian, PIR), as well as to benefit from a tax exemption on accrued returns, if the investment is kept for 5 years.
Main EU and Italian law provisions issued on the wake of the health emergency
- MEF Decree identifying criteria and methods for the application and use of the tax credits granted by the Relaunch Decree in favour of companies that undertake capital increases by 31st December 2020.
- Decree of the MISE directorate adopting implementing provisions of the measure granting of a non-repayable contribution, in the form of a voucher, in favour of micro and SMEs for the purchase of specialised advice on technological and digital transformation processes.
- BoI Note complying with EBA guidelines, which have extended to 30th September 2020 the application to the debtor of legislative and non-legislative moratoriums granted due to the health emergency, having as object payments on loans.
Amendments to the Consolidated Financial Law and the Post-trading Provision in implementation of SHRD II in Italy
In implementation of SHRD II into national legislation, Part V of the Consolidated Financial Law has just been amended, in order to tighten the sanctionary regime applicable to listed companies, as well as to their corporate officers, in case of breach of the provisions on remuneration policy, paid fees and transactions with related parties. In this regard, Consob has recently launched a public consultation on the Post-trading Provision (that will end on 25th September next), proposing changes to the provisions on stockholders’ identification, transmission of information and facilitation of the exercise stockholders’ rights.
Corporate/Laws of contract
Amendments to the sanctionary procedure before the BoI
The BoI has recently amended its Supervisory Provisions on the administrative sanctionary procedure held before it, for the purpose of adapting them to the organisational and procedural arrangements resulting from the establishment of the Client Protection and Financial Education Department within BoI, as well as identifying the Supervisory Institutional Relations Service as the body responsible for such procedure. These amendments apply to alleged breaches ascertained after 29th August 2020.
Banking law
Amendments to the procedure before ABF
By means of a resolution adopted by the Interministerial Committee for Credit and Savings, the procedure for the out-of-court settlement of disputes before the ABF has been recently amended, providing for (i) the possibility for the BoI to identify cases in which the intermediary does not have to reimburse the filing fees to the appellant, (ii) a period of 90 days for issuing a decision on the appeal, as well as (iii) the repeal of the provision that envisaged the interruption of the procedure in the event of a tentative conciliation.
Consultation on EBA-ESMA guidelines on banks’ corporate officers
In order to safeguard stability and trust in the financial system in case of the involvement of credit institutions and investment firms in money laundering and terrorism phenomena, EBA has launched two public consultations (that will end on 30th October) having as object guidelines on:
- the suitability assessment of directors and other key functions holders; and
- internal governance, aimed at preventing and managing conflicts of interest and gender discriminations.
EBA, Consultation of 31st July 2020 on Guidelines on internal governance.
Financial law
ESMA proposes amendments to the AIFMD to the European Commission
By means of a letter to the European Commission, ESMA has proposed amendments to some sections of the AIFMD, including (i) harmonisation of AIFMD and UCITS’ respective regimes, (ii) harmonised reporting for UCITS, (iii) scope of additional MIFID services and application of rules, (iv) financial leverage and other liquidity management tools, (v) AIFMD reporting and data use regime, and (vi) harmonisation of supervision on cross-border entities.
ESMA’s Letter of 18th August 2020 on review of the Alternative Investment Fund Managers Directive.
New provisions on prudential default
The BoI has recently postponed to 1st January 2021 the application of the prudential default provisions for investment firms (see our NL of June 2020), which have established the relevance threshold for overdue credit obligations and implemented ABE’s Guidelines on prudential default.
Published amendments to the Intermediaries Regulations implementing the IDD
In order to adapt the Intermediaries Regulation to the IDD implementing measures, Consob has recently introduced new disclosure requirements and rules of conduct for intermediaries in the distribution of IBIPs. Among the main novelties, it is worth mentioning the obligation to (i) preliminary verify the consistency of IBIPs with the client’s insurance requirements and needs, and (ii) extend the suitability test on the client’s investment choice also to equivalent financial or insurance investment products.
Consob’s Resolution no. 21466 of 29th July 2020 amending the Intermediaries Regulation (published in the Official Gazette no. 201 of 12th August 2020; text available in Italian only).
Supplementary pension forms: new obligations for the persons in charge of pension funds
As a result of a recent COVIP’s Resolution on supplementary pension forms, the persons in charge of the latter will have to:
- by the approval of the yearly financial statements closed at 31st December 2020, prepare a report on governance system and policies, as well as the manual of operational procedures; and
- by 31st December 2020, set up the risk management, internal audit and actuarial functions and explain the remuneration policy that the fund at issue intends to adopt.
AIM Italia Market Regulation recently amended
Borsa Italiana has published the amendments to its Market Regulation on AIM Italia concerning, among others, (i) provisions on the Panel on public offerings and the conditions for de-listing, (ii) the introduction of a reserved area for professional investors, (iii) governance and transparency safeguards, (iv) admission requirements, (v) obligations of issuers, and (vi) convertible bonds and warrants.
Consultation on the amendments to the BoI Regulation on collective asset management
The BoI has recently launched a public consultation (open until 20th September) on the Regulation on collective asset management, in order to (i) clarify the modalities for the exercise of the fund manager’s right to suspend, in exceptional market circumstances, the open Italian UCIs’ subscribers’ redemption rights, (ii) review some provisions applicable to closed Italian AIFs, and (iii) clarify the possibility of deferring the payment of subscription fees over time.
Consultation on amendments to the Issuers Regulations
Consob has recently launched a public consultation (which will end on 30th September) on proposed amendments to the Issuers Regulations, concerning, among others, subjects and modalities by which PRIIPs creators must comply with the obligation to make KIDs electronically accessible to Consob itself.
Consultation on the amendments to the Intermediaries Regulation
Consob has recently launched a public consultation (which will end on 21st September) on amendments to the Intermediaries Regulation, aimed at eliminating detailed requirements, by leaving it to the intermediaries to identify operating methods suitable to guarantee compliance with the standards set forth by ESMA Guidelines on the knowledge and competence requirements of intermediaries’ personnel.
Disclosure obligations must be met by the intermediary also with regard to expert investors
The intermediary must comply with the disclosure obligations on nature, expected return and any other characteristics of the financial instrument in question also with regard to an investor who has already carried out high-risk financial transactions, since the causation link between the violation of such obligations and the occurrence of an unaware choice by the investor is presumed by the law.
Market manipulation occurs even without price alteration
The behaviour of the online trader who operates on Italian government securities, by implementing an operating scheme that provides for misleading information on demand, offer and price of such securities, amounts to the administrative offence of market manipulation referred to in Article 187-ter of the Consolidated Financial Act, even if the afore-said conduct is not capable of making a significant alteration of the market price of the above securities.
Application of personality rights to asset management companies
The right to honor and commercial reputation must be recognised also on legal entities, with the consequence that an asset management company can claim and obtain non-pecuniary damages deriving from the disclosure of information suitable to generate a representation of its economic-financial situation worse than the actual one.
Court of Milan, decision no. 4416 of 17th July 2020.
Effects of binding instructions given to the portfolio manager
In relation to the portfolio management service, the managed client’s right to provide the manager with binding instructions is an expression of the personalised nature of the portfolio management itself, yet it can never be deemed as in implied approval of the manager’s previous decisions.
Civil Court of Cassation, Sec. I, decision no. 9024 of 15th May 2020 (text available in Italian only).
On the irrelevance of the modalities of acquisition of a privileged information in the insider trading
With regard to insider trading, it is sufficient to establish a causation link between the possession by the (alleged) insider of the relevant information and the use of the latter in transactions over financial instruments, being irrelevant both the way in which the insider has obtained such information and the fraudulent acquisition of the latter.
List of abbreviations
ABF: Italian Banking and Financial Ombudsman.
AIFMD: Directive 2011/61/EU of the European Parliament and of the Council of 8th June on Alternative Investment Fund Managers.
AIFs: Alternative Investment Funds.
AIM ITALIA: Multilateral trading facility for small and medium enterprises regulated and managed by Borsa Italiana.
August Decree: Law Decree no. 104 of 14th August 2020, containing urgent measures to support and relaunch the economy.
BoI: Bank of Italy.
Borsa Italiana: The Italian Stock Exchange’s managing company.
Consob: The national financial markets Authority.
Consolidated Financial Act: Legislative Decree no. 58 of 24th February 1998.
COVIP: Italian Supervisory Commission on Pension Funds.
COVIP’s Resolution: COVIP Resolution of 29th July 2020 on supplementary pension forms.
EBA: European Banking Authority.
ESMA: European and Securities Market Authority.
IBIP: Insurance-Based Investment Products.
IDD: Directive (EU) 2016/97 of the European Parliament and of the Council of 20th January 2016 on insurance distribution.
KID: Key Information Document.
MEF: Ministry of Economic and Finance.
MIFID: Directive (EU) 2014/65 of the European Parliament and of the Council of 15th May 2014 on markets in financial instruments.
MISE: Ministry of Economic Development.
Panel: Arbitration board composed of three members appointed by Borsa Italiana, competent to provide its prior interpretation and recommendations on any issue related to public offer to buy or exchange.
Post-trading Provision: BoI and Consob’s Regulation of 13th August 2018 on post-trading.
PRIIP: Packaged retail and insurance-based investments products.
Regulation on collective asset management: BoI’s Regulation of 19th January 2015, as amended.
Relaunch Decree: Law Decree no. 34 of 19th May 2020, containing urgent measures on health, support for work and the economy, as well as social policies related to the epidemiological emergency by COVID-19.
SGR: Asset management company.
SHRD II: Directive (EU) 2017/828 of the European Parliament and of the Council of 17th May 2017 amending Directive 2007/36/EC as regards the encouragement of long-term shareholder engagement.
SIM: Investment firm.
SMEs: Small and Medium Enterprises.
UCIs: Undertaking for Collective Investment.
UCITS: Undertaking for the Collective Investment in Transferable Securities.