Regulatory Alerts2014-11-04
Provisions - Entry into Force of the Single Supervisory Mechanism
The Bank of Italy issued this provision to detail the effects of the Single Supervisory Mechanism's entry into force on November 4, 2014, on its administrative supervisory proceedings. It establishes that the European Central Bank assumes prudential supervision responsibilities for significant banks and specific common procedures, while the Bank of Italy assists and handles initial applications for authorizations and qualified participations. The document further mandates that existing Bank of Italy regulations remain applicable where compatible with EU regulations until they are updated to reflect the new supervisory framework.
6 Pag. 1/2 489425/14 Provision of the Bank of Italy Entry into force of the Single Supervisory Mechanism. Effects on administrative supervisory proceedings under the competence of the Bank of Italy
Regulation (EU) No 1024/2013 of 15 October 2013 has attributed specific tasks to the European Central Bank (ECB) regarding the prudential supervision of credit institutions, in cooperation with the national supervisory authorities of participating countries, within the framework of the Single Supervisory Mechanism (SSM).
The ECB assumes the tasks attributed by this Regulation on 4 November 2014; these are exercised with the assistance of the Bank of Italy, in the manner provided for by Regulation of the European Central Bank No 468/2014 of 16 April 2014. The relevant decisions will be taken, on the proposal of the Supervisory Board, by the Executive Board of the ECB; the Bank of Italy is represented in both these decision-making bodies.
- Main changes for the supervisory activities of the Bank of Italy
From 4 November 2014, based on Regulation (EU) No 1024/2013, the ECB, with the assistance of the Bank of Italy, is responsible for the prudential supervision of significant banks, as identified in the list published by the ECB on 4 September 2014.
Furthermore, the Regulation contains specific provisions concerning all banks, in relation to certain specific types of supervisory proceedings (so-called "common proceedings"). In particular:
(i) The application for authorization to carry out banking activities, for an entity that will have its legal seat and head office in Italy, is submitted to the Bank of Italy. The latter, having assessed the existence of the authorization conditions provided for by national law, proposes to the ECB the issuance of the authorization. In other cases, the Bank of Italy rejects the authorization request. The authorization is considered issued by the ECB in the absence of communications within the time limit prescribed by law for the issuance of the authorization (Article 14 of Regulation (EU) No 1024/2013). With regard to procedural time limits, EU Regulations refer to what is provided for by national law;
(ii) The withdrawal of the authorization to carry out banking activities may be ordered, depending on the case, on the initiative of the ECB or on the proposal of the Bank of Italy; the withdrawal is ordered by the ECB (Article 14 of Regulation (EU) No 1024/2013), without prejudice to the power of the Bank of Italy to propose to the Ministry of Economy and Finance the compulsory administrative liquidation pursuant to Articles 80 and following of the Banking Act;
(iii) In the case of acquisition of qualified participations in a credit institution having its legal seat and head office in Italy, the application for authorization is submitted to the Bank of Italy. It assesses the proposed acquisition and transmits the application to the ECB and subsequently a proposal regarding the issuance of the authorization. The ECB then decides whether to prohibit the acquisition "on the basis of the assessment criteria established by the
6 Pag. 2/2 489425/14 relevant Union law, in accordance with the procedure and within the time limits for the assessment established therein" (Article 15 of Regulation (EU) No 1024/2013).
- Effects on the Bank of Italy's regulations with external relevance
The Bank of Italy Regulation of 25 June 2008 governs administrative supervisory proceedings for all supervised entities and, in the attached list, identifies pursuant to Law No 241/1990 the time limits and organizational units responsible for each specific procedural case.
This list must be updated to take into account the launch of the SSM and the supervisory provisions issued in the meantime.
Pending this revision, the Regulation of 25 June 2008 – as modified by the Provision of the Bank of Italy of 21 January 2014, particularly for the purpose of identifying the responsible organizational units – is applicable insofar as it is compatible with Regulation (EU) No 1024/2013 and Regulation (EU) No 468/2014.
The Governor Deliberation 568/2014 signature 1