CICR Deliberation of 9 February 2000: Regulation of Non-Bank Financial Subjects

Interministerial Committee for Credit and Savings

SECRETARIAT

DELIBERATION OF 9 FEBRUARY 2000

Regulation of subjects operating in the financial sector (Article 155, paragraph 6, of the Banking Act Consolidated Text, as amended by Article 35 of Legislative Decree 342/99).

THE INTERMINISTERIAL COMMITTEE FOR CREDIT AND SAVINGS

HAVING REGARD TO Article 10, paragraphs 1 and 2, of Legislative Decree 1 September 1993, No. 385 (Banking Act Consolidated Text), according to which the collection of savings from the public and the exercise of credit constitute banking activity, the exercise of which is reserved to banks;

HAVING REGARD TO Article 11, paragraph 2, of the same Banking Act Consolidated Text, which prohibits subjects other than banks from collecting savings from the public;

HAVING REGARD TO Article 155, paragraph 6, of the Banking Act Consolidated Text, as amended by Article 35, paragraph 2, of Legislative Decree No. 342 of 4 August 1999, which attributes to the CICR the power to determine the operational modalities and quantitative limits within which subjects other than banks, already operating as of 19 October 1999, who traditionally collect modest amounts locally and provide small loans without profit motive, may continue to carry out their activity, given its marginal nature;

HAVING REGARD TO Article 106, paragraph 1, of the Banking Act Consolidated Text, as amended by Article 20, paragraph 1, of the aforementioned Legislative Decree No. 342 of 4 August 1999, which imposes the obligation to register in a special list kept by the Italian Foreign Exchange Office on subjects who exercise, among other things, the activity of granting financing in any form towards the public;

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Interministerial Committee for Credit and Savings

SECRETARIAT

HAVING REGARD TO Article 106, paragraph 4, letter b), of the Banking Act Consolidated Text, which attributes to the Minister of the Treasury the power to allow financial intermediaries carrying out certain types of activities to assume legal forms and minimum capital requirements different from those provided for in Article 106, paragraph 3, letters a) and c), of the same Act;

HAVING REGARD TO Article 4 of the Decree of the Minister of the Treasury of 30 December 1998, No. 516, which regulates - pursuant to Article 109 of the Banking Act Consolidated Text - the integrity requirements of the representatives of financial intermediaries;

TAKING INTO ACCOUNT the structural and operational peculiarities that characterize the remaining non-bank bodies which, without profit motive, traditionally collect modest amounts locally and provide small loans;

DEEMING it necessary to regulate the activity of the aforementioned subjects in a manner consistent with current legislation on the collection of funds by subjects other than banks and to provide, within this scope, adequate safeguards for savers;

ON THE PROPOSAL formulated by the Bank of Italy, after hearing the Italian Foreign Exchange Office;

DELIBERATES

1. Subjects other than banks and intermediaries registered in the list referred to in Article 106, paragraph 1, of the Banking Act Consolidated Text, who, without profit motive, traditionally collect modest amounts locally and provide small loans, may continue to carry out their activity provided that their statutes contain the provisions set forth in point 2.

2. The statutes of the subjects referred to in point 1 must include the indication of the name, purpose, headquarters, and legal representative of the entity, with

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Interministerial Committee for Credit and Savings

SECRETARIAT

the specification of their respective duties and responsibilities. Furthermore, the statutes must provide that:

• the number of members does not exceed 200;
• the funds collected are contained within the limit of 3 million euros for each member;
• the funds collected may be used, to an extent not exceeding half, exclusively for mutualistic purposes, in loans to members within an individual limit of 6 million euros;
• the residual funds compared to those referred to in the previous paragraph are invested in government bonds, bank bonds, or bank deposits;
• the collection of demand funds and any form of collection linked to the issuance or management of means of payment with general spendability is prohibited;
• the legal representative of the entity possesses the integrity requirements referred to in Article 4 of the Decree of the Minister of the Treasury of 30 December 1998, No. 516.

3. The subjects referred to in point 1 are registered in a special section of the list kept by the Italian Foreign Exchange Office, referred to in Article 106, paragraph 1, of the Banking Act Consolidated Text. They carry out exclusively the activities indicated in the same point 1.

4. Considering the statutory prescriptions referred to in point 2, the requirements provided for in Article 106, paragraph 3, letters b) and d), of the Banking Act Consolidated Text do not apply to the subjects referred to in point 1.

5. By decree of the Minister of the Treasury referred to in Article 106, paragraph 4, letter b), of the Banking Act Consolidated Text, legal forms and capital requirements different from those provided for in Article 106, paragraph 3, letters a) and c), of the Banking Act Consolidated Text will be established.

6. Compliance with the statutory prescriptions must occur by 30 September 2000. By the same date, a copy of the statute must be

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Interministerial Committee for Credit and Savings

SECRETARIAT

sent to the Italian Foreign Exchange Office, together with the application for registration in the aforementioned list referred to in Article 106, paragraph 1, of the Banking Act Consolidated Text.

7. The provisions of this deliberation apply to subjects already operating as of 19 October 1999, as well as to those who have ceased operations in compliance with measures issued by the Bank of Italy starting from 17 November 1997. The latter subjects, within the term indicated in point 6, must send suitable documentation to the Italian Foreign Exchange Office (e.g., concerning relationships with banks or other supervised intermediaries) from which it emerges that they disposed of their activity subsequently to the aforementioned date of 17 November 1997.

8. This deliberation, which will be published in the Official Gazette of the Italian Republic, enters into force on the day of its publication.

Rome, 9 February 2000

THE PRESIDENT G. AMATO