Interministerial Committee for Credit and Savings

SECRETARIAT

DELIBERATION OF 3 MARCH 1994

Collection of savings pursuant to Article 11 of Legislative Decree No. 385 of 1 September 1993 (Consolidated Text of Laws on Banking and Credit).

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THE INTERMINISTERIAL COMMITTEE FOR CREDIT AND SAVINGS

Having regard to Article 11, paragraph 1, of Legislative Decree No. 385 of 1 September 1993, which defines the activity of collecting savings as the acquisition of funds with an obligation to repay;

Having regard to paragraph 2 of the same article, which prohibits entities other than banks from collecting savings from the public;

Having regard to paragraph 3 of the aforementioned article, which grants the CICR the power to establish limits and criteria, including with regard to the activity and legal form of subjects, based on which certain types of acquisition of funds with an obligation to repay do not constitute the collection of savings from the public;

Having regard to paragraph 4, letter c) of the aforementioned article, which establishes that the prohibition referred to in paragraph 2 does not apply when referring to collections carried out by joint-stock companies and limited partnerships by issuing bonds, within the limits provided by the Civil Code;

Having regard to letter d) of the aforementioned paragraph, which, with reference to collections carried out by companies and entities with securities traded on a regulated market, grants the CICR the power to:

• establish, also taking into account the issuer's activity for the purpose of protecting the reserve of banking activity, the limits within which the prohibition referred to in the aforementioned paragraph 2 does not apply to the aforementioned companies and entities;
• identify, upon proposal by the Bank of Italy and after consulting CONSOB, the characteristics, including duration and denomination, of the securities through which such collection may be carried out;
• derogate from the limits provided by paragraph 1 of Article 2410 of the Civil Code;

Having regard to letter e) of the aforementioned paragraph, which, with reference to collections carried out by companies through banks and entities subject to prudential supervision, delegates to the CICR the power to:

• determine, also with regard to the activity carried out by the issuer, criteria and limits within which the prohibition referred to in the aforementioned paragraph 2 does not apply;
• identify the categories of financial entities, in addition to banks, through which the collection may be carried out;

Having regard to Articles 130 and 131 of the aforementioned Legislative Decree, which subject to criminal penalty the activity of collecting savings from the public carried out in violation of Article 11 cited above;

Having regard to the articles under Title VI, Chapter I, of the same Decree, and in particular Article 117, paragraph 8, which recognizes the Bank of Italy's power to prescribe that certain contracts or securities, identified through a particular name or based on specific qualifying criteria, have a determined typical content;

Having regard to Article 10 of Law No. 59 of 31 January 1992, regarding loans by members of cooperative societies;

Having regard to Law No. 43 of 13 January 1994 on the regulation of financial bills;

Considering that the protection of savers, in terms of transparency, is ensured by Articles 18 and following, sub-article 1, of Law No. 216 of 7 June 1974 and by the provisions adopted by CONSOB in implementation of the same Article 18;

Recognizing the need to outline a unitary and organic regulation of the collection of savings permitted to subjects other than banks and to provide, within this framework, adequate safeguards in favor of savers;

On the proposal formulated by the Bank of Italy;

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DELIBERATION

1. Collection from Members

The collection of savings through the acquisition of funds with an obligation to repay from members is not considered "collection of savings from the public" if carried out in compliance with the provisions of this paragraph.

The collection must be directed to subjects registered in the members' book for at least three months who hold a participation of at least 2 percent of the share capital resulting from the last approved balance sheet. This right must be provided for in the statutes.

Cooperative societies that do not carry out financial activities may collect savings, even from members with less than 2 percent of the capital, provided that the total amount of social loans does not exceed the limit of three times the equity (paid-in capital and reserves) resulting from the last approved balance sheet. This limit is raised to five times the equity if the total of social loans is secured, to at least 30 percent, by guarantees issued by the subjects referred to in paragraph 3, or when the cooperative society adheres to a social loan guarantee scheme that provides adequate protection for investors. The methods of collection from members must also be clearly indicated in the specific regulations.

Collection from members may not in any case take place with "on-demand" instruments or linked to the issuance or management of payment instruments.

The equity limits indicated above do not apply to cooperative societies with no more than 50 members.

Collection from members is not permitted to cooperative societies carrying out financial activities referred to in paragraph 1 of Article 106 and paragraph 1 of Article 113 of Legislative Decree No. 385 of 1993.

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2. Collection of Savings from the Public

The collection of savings from the public by subjects other than banks, through the acquisition of funds with an obligation to repay, is permitted through the instruments indicated below, according to methods and within limits differentiated by categories of subjects.

Bonds

The collection of savings through the issuance of bonds is permitted to joint-stock companies and limited partnerships, respecting the limit provided by Article 2410 of the Civil Code.

This limit is raised up to the amount of paid-in capital and reserves resulting from the last approved balance sheet for companies with securities traded on a regulated market. The derogation from the Civil Code does not apply to listed companies that carry out financial activities referred to in paragraph 1 of Article 106 and paragraph 1 of Article 113 of Legislative Decree No. 385 of 1993. The derogation applies, however, to supervised financial companies registered in the special list referred to in Article 107 of the same Decree.

Other Securities

The collection of savings from the public through securities other than bonds is permitted:

• to companies and entities with securities traded on a regulated market;
• to other companies provided that the balance sheets for the last three fiscal years show a profit. The securities must also be secured by a guarantee, in an amount not less than 50 percent of their subscription value, issued by the subjects referred to in paragraph 3 of this deliberation. The identity of the guarantor and the amount of the guarantee provided must be clearly indicated on the securities.

Such collection is carried out through the issuance of:

• "financial bills" pursuant to Law No. 43 of 13 January 1994;
• securities, even bearer securities, named "investment certificates."

The total amount of collection carried out through "financial bills" and "investment certificates" cannot exceed, together with the collection through bonds, the limit of paid-in capital and reserves resulting from the last approved balance sheet.

The Bank of Italy, after consulting CONSOB, proposes the characteristics, including duration and denomination, of the aforementioned securities to the Minister of the Treasury, who proceeds with its own decree. The minimum denomination cannot be less than one hundred million lire; the duration will take into account the need to distinguish the two collection instruments. Further characteristics will be fixed to ensure that securities of the same issuance are fungible among themselves.

Collection through "financial bills" and "investment certificates" is precluded to intermediaries carrying out the financial activities referred to in paragraph 1 of Article 106 and paragraph 1 of Article 113 of Legislative Decree No. 385 of 1993. The preclusion does not concern supervised financial companies registered in the special list referred to in Article 107 of the same Decree.

The provisions of Article 129 of Legislative Decree No. 385 of 1993 and the related implementation norms, concerning preventive and final reports on the issuance and placement of securities, apply to the collection carried out with the instruments indicated in this paragraph.

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3. Provision of Guarantees by Subjects Subject to Prudential Supervision

The guarantees required by paragraphs 1 and 2 of this deliberation may be issued, within the limits provided by the relevant sector regulations, by the subjects subject to prudential supervision indicated below:

• banks authorized in Italy and EU banks referred to in Article 1, paragraph 2, letters d) and b) of Legislative Decree No. 385 of 1993;
• financial companies registered in the special list referred to in Article 107 of Legislative Decree No. 385 of 1993;
• insurance companies and entities authorized pursuant to Law No. 295 of 10 June 1978 and Law No. 742 of 22 October 1986.

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4. Collection within Business Groups

Collection carried out from holding companies, subsidiaries, or affiliated companies pursuant to Article 2359 of the Civil Code and from subsidiaries of the same holding company is free, as is collection carried out within the same group. The Bank of Italy defines the scope of cooperative subjects that, for the purposes of this regulation, constitute a "group."

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5. Transitional Provisions

With regard to proposals for the revision of the tax treatment of financial income, the issuance of financial bills is temporarily precluded to banks.

The definition of the limits and criteria through which the collection of savings from employees may be carried out will be the subject of a subsequent deliberation.

The provisions of this deliberation enter into force fifteen days after the date of publication in the Official Gazette of the Italian Republic of the implementation instructions of the Bank of Italy.

Subjects other than banks who, on that date, have outstanding debt positions exceeding the quantitative limits established by this deliberation, will comply with the provisions contained therein within the terms fixed by general measures of the Bank of Italy.

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6. Repealed Provisions

With this deliberation, the provisions of the Committee's Deliberation of 27.10.1983 concerning the exercise of banking activity by unauthorized companies, as well as other deliberations incompatible with it, are repealed.

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7. Implementation Instructions

The Bank of Italy issues implementation instructions on the matters regulated by this deliberation.

This deliberation will be published in the Official Gazette of the Italian Republic.

Rome, 3 March 1994

The President P. Barucci