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15 November 2002
On July 15 2002 Italy's national financial supervisory authority, CONSOB, issued Statement DIN/2049119 confirming that banks and other authorized intermediaries may appoint special 'financial services promoters', but only subject to certain restrictions.
'Banking activity', as defined by Articles 1 and 10 of the Banking Law (Legislative Decree 385 of September 1 1993), includes the provision of investment services, financial advice and asset management services.
According to Article 31 of the Financial Law (Legislative Decree 58 of February 24 1998), banking services provided off a bank's premises (so-called 'door-to-door offers') may only be provided by financial advisers who have been duly registered with CONSOB.
However, in its earlier Statement DI/98069882 of August 27 1998 CONSOB stated that activity which merely introduces the bank's name to potential customers, without involving any kind of solicitation or promotional activity regarding its products and services, is not subject to Article 31 of the Financial Law. For these activities, banks are therefore authorized to employ not only financial advisers, but also financial services promoters, who need not be listed in CONSOB's register of financial promoters.
This earlier statement further provided that financial services promoters could be paid exclusively through commission earned on banking contracts signed by the new customers whom they introduced to the bank.
However, as there is fine line between the introduction activities described above and door-to-door offers, CONSOB issued a new statement on July 15 2002 clarifying that the banks must adopt suitable measures to ensure that the activities of financial services promoters are limited to introduction services only.
CONSOB also stated that in order to prevent financial services promoters from promoting the bank's services in a bid to earn more commission, it is entitled to request banks which have opted to pay financial services promoters by commission only to prove they have implemented suitable controls to ensure that these employees operate within the parameters specified by Italian law, and do not unlawfully extend their activities to include solicitation and promotion.
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