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Top stories
Converted into law the so called “Simplifications Decree”
The so-called “Simplifications Decree” has been recently converted into law, introducing important novelties in the areas of public procurement, construction, procedural simplifications, digital administration, business activities, environment and green economy. Particularly noteworthy for the world of enterprises is (i) the raising to 200 thousand Euro of the financing threshold that allows SMEs to obtain the public facility known as “Nuova Sabatini” as a one-off solution, (ii) the cancellation from the Register of Companies in the absence of shareholders’ complaints against the balance sheet of final liquidation, (iii) the possibility for private individuals investing in Italy to stay there for more than 3 months even if they act on behalf of a legal entity, (iv) the approval by absolute majority of capital increase resolutions of joint-stock and limited liability companies, as well as the possibility for listed companies or those with shares traded in multilateral trading facilities to approve capital increases by means of new contributions, with the exclusion of the right of option (provision in force until 30th June 2021), and (iv) simplified criteria for the qualification of listed SMEs.
The European Court of Justice rules for the first time on the “net neutrality”
The European Court of Justice, deciding upon a preliminary ruling filed by a Hungarian company, has recently established that EU Regulation 2015/2120 does not allow an internet provider to enter into agreements with end-users, under which the latter may (i) purchase a tariff entitling them to use a specific volume of data without restriction, without any deduction being made from that data volume for using certain specific applications and services covered by ‘a zero tariff’, and (ii) once that data volume has been used up, continue to use those specific applications and services without restriction, while measures blocking or slowing down traffic are applied to the other applications and services available.
Corporate/Laws of contract
New ANAC Regulation on whistleblowing enters into force
To allow ANAC to exercise its sanctionary authority more effectively, a new Regulation on whistleblowing has been recently issued, which governs the procedure for managing reports, assessing retaliatory behaviors adopted against the whistleblower (if any), as well as for applying sanctions in case of failure to verify and analyse reports, and prepare suitable procedures for the submission and management of the same.
Banking law
New regulatory and implementing technical standards for STS securitisations
The European Commission has recently issued a package of regulations supplementing the Securitisation Regulation, which lays down technical standards having as object (i) information and details of STS Securitisations to be disclosed by the originator, sponsor and SSPE, (ii) modalities of transmission of such information to investors, (iii) information to be provided in accordance with the STS notification requirements and necessary forms, and (iv) application for registration of securitisation repositories.
Official Journal of the European Union no. L. 289 of 3rd September 2020.
Disapplication of EBA guidelines on loan repayments moratoria
Effective 30th September 2020, EBA will phase out its own guidelines on legislative and non-legislative loan repayments moratoria.
The latter will however continue to apply, as far as its regulatory treatment is concerned, to all payment holidays granted under eligible payment moratoria prior to 30th September 2020. Conversely, banks may continue to grant payment moratoria also after 30th September 2020, although the related loans must be classified, on a case-by-case basis, according to the usual prudential framework.
Implementation of EBA guidelines on public reporting and disclosure requirements
The BoI has recently implemented EBA guidelines having as object the filling-in of supervisory reporting schemes and public disclosure, in light of the changes introduced by the “Quick-fix” CRR. In particular, the above guidelines provide information on the calculation of the leverage ratio and the capital requirements against credit risk, reports relating to own funds, as well as the introduction of new disclosure requirements.
New requirements for corporate officers of pension funds
By means of a recently published decree of the Ministry of Labour and Social Policies, there have been issued requirements of professionalism and integrity, grounds for ineligibility and incompatibility, impediments and suspension grounds concerning legal representative, general manager, corporate officers, persons holding key functions, as well as managers of opened pension funds and individual pension forms.
New BoI provisions on recovery plans
The BoI has recently issued new rules on the recovery plans of the so-called less significant banks and SIMs, laying down implementing provisions aimed at defining the minimum content of such plans, as well as at identifying simplified ways of drafting the latter.
Default interests are subjected to the anti-usury discipline
According to the Supreme Court (Joint Chambers), the anti-usury discipline applies also to default interests, since the related provisions are aimed at sanctioning not only the application of excessive interests agreed upon when the loan agreement was entered into, but also the promise of any usurious sum due in relation to such agreement.
Joint Chambers of the Court of Cassation, sentence no. 19597 of 18th September 2020.
Nullity of the indexation clause linked to Euribor
In a loan agreement, the interest rate’s indexation clause is null and void for indeterminacy of its object, as well as for breach of mandatory rules, should it be referred to Euribor, registered between 29th September 2005 and 30th May 2008, which was sanctioned by the European Commission (in its decision of 4th December 2013). This applies even if the lending bank is not among those that have taken part to the ascertain manipulation of Euribor.
Court of Ancona, decision no. 1056 of 18th August 2020.
How relevant is as evidence the BoI’s inspection report?
In proceedings for opposition against administrative sanctions, the BoI’s inspection report constitutes full evidence, (i) until action for fraud, of the facts acknowledged therein, as well as of the origin of the document itself, and (ii) until rebuttal evidence, of the substantive truthfulness of the content of the documents drawn up among the interested and/or third parties, as well as of the statements made therein. Therefore, the results of the inspection constitute an evidence to be assessed by the Court, as they can only be disregarded in the event of unreliability or contrast with other elements acquired during the proceedings.
Financial law
Amendments to the Prospectus Regulation
A set of provisions have been published in the Official Journal, which amend:
- EU Delegated Regulation 2019/979, removing the obligation of issuers of securities convertible or exchangeable into third party shares to publish a supplement to their prospectus; and
- EU Delegated Regulation 2019/980, providing, among other, that issuers of convertible, exchangeable and derivative securities are subject to less stringent disclosure requirements applicable to issuers of non-equity securities, and clarifying the order of disclosure of information items relating to derivative securities and to the underlying share in the EU Growth prospectus.
Implementation of ESMA’s guidelines on supervisory reporting on MMFs
The BoI has recently implemented ESMA’s guidelines containing instructions and technical standards for filing quarterly reports by MMF managers with the BoI if the assets under management are equal at least to 100 million Euro, or annually should such assets be lower that the latter threshold. In any case, reports relating to the first two quarters of 2020 must be sent to the BoI by 30th September 2020.
Bank’s liability in the sale of diamonds to clients
If a bank’s client enters into an agreement with a third party for the purchase of diamonds, upon proposal of his/her bank acting as an intermediary, the latter may be held liable for the damages incurred by its client if the actual value of the diamonds purchased is far below the price paid. Indeed, the bank’s obligation to properly manage clients’ assets and inform them properly about recommended or merely introduced investments prevails over any other element.
Civil Court of Lucca, decision no. 750 of 4th September 2020.
Financial services/FinTech
EY – Fintech District’s Report on Italian Fintech ecosystem just published
The Italian Fintech ecosystem, although still small, is potentially suitable to attracting foreign investment. This is one of the conclusion reached by the consulting firm EY and the Fintech District of Milan (i.e., the hub of Italian companies active in the sector). According to them, in the next few years (i) the alternative sources of financing will fastly develop because of the incumbents’ credit crunch, (ii) following the implementation of PSD2 in Italy, open banking is likely to become the new development paradigm of such sector, and (iii) RegTech will rapidly expand.
EY – Fintech District, Report of September 2020 on Fintech Italian ecosystem.
Consob’s report on roboadvice just published
Consob has recently published on its website the 7th document of the Fintech series, which focuses on roboadvice. Among others, it is pointed out therein that the probability that an individual follows or not a recommendation from an investment advisor does not depend on the source of the recommendation (whether human or virtual), but rather on the alignment between the self-directed choice made even before receiving the advice in question and the advice itself. Indeed, the propensity to follow the investment advisor increases if the advice confirms the client’s own beliefs about her/his investor profile.
Consob, 7th Fintech Notebook of September 2020 on confidence about roboadvice.
Compliance
Data protection
Public consultations launched by EDPB
Two public consultations (that will end on 19th October next) are currently pending before EDPB, which concern guidelines on:
- the concepts of controller and processor in the GDPR, aimed at clarifying their definition, rule and relationship; and
- the targeting of social media users, aimed at clarifying targeters and social media providers’ rule and responsibilities.
In addition, two task forces have been set up to within the EDPB, with the task of examining complaints brought after the European Court of Justice’s “Schrems II” Judgment (see our NL of July 2020), and developing recommendations for controllers and processors on identifying and implementing further measures to ensure adequate data protection when data are transferred to third countries, respectively.
EDPB’ Guidelines 8/2020 on the targeting of social media users of 2nd September 2020.
The unlawful data processing constitutes a permanent tort
The processing of personal data carried out without prior information and acquisition of consent from the data subject constitutes a permanent tort, which lasts until it is ascertained by the Data Protection Authority. As a result, the defensive argument brought by the sanctioned person whereby the alleged unlawful behavior was subject to the statute of limitation period, provided by the law for tort due to the expiry of five years from the processing of data subject to the Authority’s finding, cannot be upheld by the Court.
Anti-money laundering
Just published FAFT Report on virtual assets red flag indicators of money laundering
FAFT has recently published a report on virtual asset red flag indicators, whose anonymity is an attraction for criminals.
In this context, the report (i) is a support tool for NCAs in order to detect whether or not virtual assets are being used for criminal activity, as well as for the addressees of AML obligations upon analyzing suspicious transactions to be reported, and (ii) provides useful information for the national financial intelligence units, law enforcement agencies, prosecutors and regulators when assessing suspicious transaction reports or monitoring compliance with AML controls.
EBA calls on the EU Commission to establish a single rulebook on fighting money laundering
EBA has recommended to the European Commission to issue a regulation in order to harmonise the EU legal framework and strengthen some aspects of the Fifth AML Directive with regard to the latter’s provisions not sufficiently robust or specific, while reviewing the list of addressees of such provisions, and clarifying the impact thereof on financial services.
EBA’s Opinion on the future AML/CFT framework in the EU of 10th September 2020.
List of abbreviations
AML: Anti-Money Laundering.
ANAC: The Italian Anti-Corruption Authority.
BoI: Bank of Italy.
Data Protection Authority: The Italian Data Protection Authority.
EBA: European Banking Authority.
EDPB: European Data Protection Board.
EU: European Union.
EU Regulation 2015/2120: Regulation (EU) 2015/2120 of the European Parliament and of the Council of 25th November 2015 laying down measures concerning open internet access.
EU Delegated Regulation 2019/979: Commission Delegated Regulation (EU) 2019/979 of 14th March 2019 supplementing Regulation (EU) 2017/1129 of the European Parliament and of the Council with regard to regulatory technical standards on key financial information in the summary of a prospectus, the publication and classification of prospectuses, advertisements for securities, supplements to a prospectus, and the notification portal, and repealing Commission Delegated Regulation (EU) no. 382/2014 and Commission Delegated Regulation (EU) 2016/301.
EU Delegated Regulation 2019/980: Commission Delegated Regulation (EU) 2019/980 of 14th March 2019 supplementing Regulation (EU) 2017/1129 of the European Parliament and of the Council as regards the format, content, scrutiny and approval of the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Commission Regulation (EC) no. 809/2004.
FAFT: Financial Action Task Force (the global money laundering and terrorist financing watchdog).
Fifth AML Directive: Directive (EU) 2018/843 of the European Parliament and of the Council of 30th May 2018 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU.
GDPR: Regulation (EU) 2016/679 of the European Parliament and of the Council 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, and repealing Directive 95/46/EC.
MMFs: Money Market Funds.
NCAs: National competent authority.
Nuova Sabatini: The measure of instrumental goods, introduced by Law no. 1329 of 28th November 1985 (also known as the “Sabatini Law”), recently amended by Law no. 160 of 27th December 2019 (the so-called “2020 Budget Law”). It is a facility made available by the Ministry of Economic Development with the aim of enhancing access to credit for micro, small and medium sized enterprises and increasing the competitiveness of Italy’s production system.
Prospectus Regulation: Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14th June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC.
PSD2: Directive (EU) 2015/2366 of the European Parliament and of the Council of 25th November 2015 on payment services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 1093/2010, and repealing Directive 2007/64/EC.
“Quick-fix” CRR: Regulation (EU) 2020/873 of the European Parliament and of the Council of 24th June 2020 amending Regulations (EU) No 575/2013 and (EU) 2019/876 as regards certain adjustments in response to the COVID-19 pandemic.
“Schrems II” Judgment: European Court of Justice (Grand Chamber)’s judgement of 16th July 2020 in Case C-311/18.
Securitisation Regulation: Regulation (EU) 2017/2402 of the European Parliament and of the Council of 12th December 2017 laying down a general framework for securitisation and creating a specific framework for simple, transparent and standardised securitisation, and amending Directives 2009/65/EC, 2009/138/EC and 2011/61/EU and Regulations (EC) no. 1060/2009 and (EU) no. 648/2012.
SIMs: Investment firm (Italian acronym for “Società di intermediazione finanziaria”).
Simplifications Decree: Law Decree no. 76 of 16th July 2020.
SMEs: Small and Medium Enterprises.
SSPE: Securitisation Special Purpose Entity.
STS: Simple, Transparent and Standardised.
STS Securitisations: Simple, Transparent and Standardised Securitisations.