The Ministry of Economy and Finance recently launched a public consultation process on a draft decree setting out the rules for a fintech sector regulatory sandbox. The draft decree aims to promote technological innovation by allowing fintech companies to test new IT services and products in the financial, credit and insurance sectors under the supervision of the competent authorities for a limited period.
A recent reform introduced a non-possessory floating pledge to the Italian legal framework. Under the reform, the perfection of such security can take place without the delivery of a pledged asset to the secured creditor, thus introducing an important exception to the general legal framework. Similar to the floating charge structure, the absence of a dispossession requirement enables entrepreneurs to retain the availability of collateral which can be used in the course of the productive cycle.
The government recently issued Decree-Law 22/2019, which is aimed at ensuring the security, financial stability and integrity of financial markets in the event of a so-called 'hard Brexit'. Under the decree-law, UK banks that carry out activities subject to mutual recognition on the United Kingdom's withdrawal date can continue carrying out their activities in Italy by serving notice to the Bank of Italy. Further, Italian branches of UK banks may continue to carry out their activities by serving notice to the Bank of Italy.
The Ministry of Economy and Finance recently published a press release announcing the measures which the Italian government, in close consultation with the regulatory authorities and following discussions with trade associations, intends to take in order to avoid a hard Brexit having a cliff-edge effect on financial activities. During the transitional period provided by the temporary measures, banking intermediaries will be able to continue to operate according to existing laws and regulations.
Virtual currencies represent uncharted territory in Italy for various reasons, and the current rules and restrictions will likely need structural adjustments to make them work. The fact that the issuer of virtual currencies for investment purposes is in most cases based in a foreign country (often outside the European Union) could make the scope of current exemptions under the Securities Act too broad.
The Bank of Italy recently commenced a public consultation on the proposed amendments to Regulation 285/2013 on remuneration policies in the banking sector, the main aim of which is to align the regulation with the European Banking Authority Guidelines of December 2015 and ensure compliance with Articles 74(3) and 75(2) of the EU Capital Requirements Directive. The consultation will end on May 14 2018.
With the Competition Law's recent entry into force, the legislature has finally established a clear legal framework by defining the concept of a 'financial lease' and the consequences for banks (or leasing companies) and clients following a breach of contract. These provisions make financial leases a more transparent tool with the aim of boosting their appeal and increasing investment by Italian companies, thus fostering economic growth.
The Italian courts, as well as scholars and legal practitioners, have debated the concept of supervening usury for many years. Until recently, it was unclear whether interest stipulated below the usury threshold at the time of contract, but exceeding such threshold at the time of payment, was usurious. The Supreme Court finally addressed this issue in a recent decision, which ruled out supervening usury entirely.
The Data Protection Authority has issued regulations for banks and companies within banking groups on the lawful processing of clients' personal data. They govern the circulation of information related to banking clients and the tracking of banking operations (relating to money flow or information) performed by bank employees.
A new legislative decree has implemented the EU Consumer Credit Directive in Italy. Among other things, its amendments to the Banking Law regulate the advertising of consumer credit and introduce new rules on transparency provisions, micro-credit operators, financial agents and credit brokers.
A new legislative decree has implemented the EU Acquisitions Directive in respect of acquisitions and increases in holdings in the financial sector. The new rules aim to increase transparency in the approval procedure for acquisitions of stakes in banks and financial intermediaries, introducing new clearance thresholds and setting out the criteria by which the Bank of Italy will assess a potential acquirer.
The legislative decree that implements the EU Payment Services Directive in Italy has recently entered into force. It introduces a new category of payment services provider - the payment institution - and defines the regulatory requirements for Italian institutions and those from other EU member states. In addition, it sets out rules for conducting payment service operations.
In the past few years the European Commission and the Italian Competition Authority have both examined the retail banking sector and multilateral interchange fees. Seen in the context of the Italian regulator's previous interventions in the sector, the ongoing proceedings against MasterCard and several other banks could have significant consequences in the European context.
The government has passed urgent legislation to assist in the recapitalization of Italian banks and to improve their liquidity, giving the Ministry for Economic Affairs and Finance wide-ranging powers. A recent implementing decree specifies criteria, conditions and procedures for state intervention, but it remains to be seen whether the measures will restore public confidence in Italy's unstable financial system.
Given that June 30 2005 is the deadline for amending the bylaws of cooperative banks, on April 2 2005 the Bank of Italy interpreted the applicability of the Corporate Law Reform 2003 to cooperative banks. Among other things, cooperative credit banks can benefit from different models of corporate governance introduced by the Corporate Law Reform.
The Italian Supreme Court has issued an important new decision on the issue of compound interest. The decision upholds a doctrine established since Spring 1999, whereby the Supreme Court has reversed prior case law by ruling that any contractual clauses in banking agreements which provide for the quarterly capitalization of interest due by the client will be deemed null and void.
Following the implementation of the EU Financial Collateral Directive, where an event of default or any similar event agreed upon between the parties occurs, the collateral holder can enforce the financial collateral by sale or appropriation, with respect to financial instruments, or by set-off, with respect to cash, even when the debtor is subject to winding-up or reorganization proceedings.
Recent amendments to the Italian Banking Law aim to harmonize its provisions with the recent corporate law reform. Among other things, the amendments create new opportunities for raising funds from subjects other than the public, and introduce new provisions governing banking activities performed by companies other than banks.
The Italian government has proposed significant reforms to the banking system in a bid to prevent a repeat of financial crises such as those created by the default of Parmalat, Cirio and various bonds subscribed by retail investors. Among other things, the bill gives increased supervisory powers to various banking authorities and facilitates coordination between these bodies.
New provisions introduced by the Interministerial Committee for Credit and Savings and the Bank of Italy aim to enhance consumer protection with regard to the advertising of financial products and services, and throughout the contractual relationship.