CICR and Emergency DM Deliberation - Deliberation of 19 July 2005, No. 1058

Interministerial Committee for Credit and Savings Secretariat

DELIBERATION of 19 July 2005 Collection of savings by subjects other than banks.

THE INTERMINISTERIAL COMMITTEE FOR CREDIT AND SAVINGS

HAVING REGARD TO Legislative Decree 1 September 1993, No. 385 (Consolidated Text of Laws on Banking and Credit Matters – TUB);

HAVING REGARD TO Article 4, paragraph 1, of the TUB, which establishes that the Bank of Italy, in the exercise of its supervisory functions, formulates proposals for deliberations within the competence of the CICR, as provided for, inter alia, in Title II of the same consolidated text;

HAVING REGARD TO Article 11 of the TUB, which:

in paragraph 1, defines the collection of savings as the acquisition of funds with an obligation of repayment, whether in the form of deposits or in any other form;

in paragraph 2, prohibits subjects other than banks from collecting savings from the public;

in paragraph 2-bis, establishes that the receipt of funds connected to the issuance of electronic money does not constitute the collection of savings from the public;

in paragraph 3, attributes to the CICR the power to establish limits and criteria, also with regard to the activity and legal form of the subjects, on the basis of which the collection of savings from the public is not considered to be that carried out among specific categories identified on the basis of corporate or employment relationships;

in paragraph 4, establishes that the prohibition referred to in paragraph 2 does not apply to the cases of collection specifically indicated;

in paragraph 4-bis, attributes to the CICR the power to determine the criteria for identifying financial instruments, however named, the issuance of which constitutes the collection of savings;

in paragraph 4-ter, attributes to the CICR the power to fix, if not regulated by law, limits on the issuance and, on a proposal formulated by the Bank of Italy after hearing CONSOB, to determine the duration and denomination of financial instruments, other than bonds, used for collection from the public;

in paragraph 4-quater, attributes to the CICR the power to establish, for the purpose of protecting the reserve of banking activity, criteria and limits, also in derogation from what is provided for by the Civil Code, for the collection carried out by subjects who exercise towards the public the activity of granting financing in any form;

in paragraph 5, provides that the collection of demand funds and every form of collection connected to the issuance or management of means of payment with general spendability are in any case precluded, in the cases provided for in paragraph 4, letters c) and d);

HAVING REGARD TO Articles 130 and 131 of the TUB, which subject to criminal sanction the activity of collecting savings from the public carried out in violation of Article 11 cited above;

HAVING REGARD TO the provisions of the Civil Code on obligations, debt securities and other financial instruments and, in particular, Articles 2412, 2483, 2526 of the same Code;

HAVING REGARD TO Law 13 January 1994, No. 43, on the regulation of financial bills;

CONSIDERING that the protection of investors, in terms of transparency and correctness of conduct, is ensured by Legislative Decree 24 February 1998, No. 58, and by the implementing regulations issued by CONSOB;

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

ON PROPOSAL formulated by the Bank of Italy pursuant to the aforementioned Article 4, paragraph 1, of the TUB and by the same Bank of Italy, after hearing CONSOB, pursuant to the aforementioned paragraph 4-ter of Article 11 of the TUB;

DELIBERATES

SECTION I GENERAL PROVISIONS

Article 1 (Collection of savings)

1. Collection of savings is the acquisition of funds with an obligation of repayment, whether in the form of deposits or in any other form.

2. The timing and amount of repayment may be conditioned by subordination clauses or depend on objective parameters, including those related to the economic performance of the business or the venture in relation to which the funds were acquired.

3. The obligation of repayment, even if excluded or not explicitly provided for, is considered to exist in cases where it can be inferred from the characteristics of the financial flows connected with the operation.

4. Participation in a share of net profits or net equity resulting from the liquidation of the assets of the business or related to the venture in relation to which the funds were acquired does not constitute repayment.

Article 2 (Collection of savings from the public)

1. The collection of savings from the public is prohibited for subjects other than banks, save for what is provided for in Article 11 of the consolidated text of laws on banking and credit matters and, with regard to the issuance of financial instruments, by this Deliberation.

2. The following does not constitute collection of savings from the public:

   • carried out in connection with the issuance of electronic money;
   • among members, employees or group companies according to the provisions of this Deliberation;
   • on the basis of personalized negotiations with individual subjects, through contracts from which the nature of financing results.

SECTION II COLLECTION THROUGH THE ISSUANCE OF FINANCIAL INSTRUMENTS

Article 3 (Financial instruments for collection)

1. Financial instruments for the collection of savings are bonds, debt securities and other financial instruments that, however named and regardless of any attribution of administrative rights, contain an obligation of repayment pursuant to Article 1.

Article 4 (Limits on the issuance of financial instruments for collection)

1. The total amount of issuances of financial instruments for collection referred to in Article 3, carried out by joint-stock companies and limited partnerships and cooperative societies, including those referred to in paragraph 2, must not exceed the limit provided for in Article 2412, first paragraph, of the Civil Code; the aforementioned issuances are subject to the derogations provided for in the same article of the Civil Code.

2. Limited liability companies and cooperative societies to which the rules on limited liability companies apply issue financial instruments for collection in compliance with what is provided for, respectively, in Articles 2483 and 2526 of the Civil Code.

Article 5 (Features of financial instruments for collection)

1. The financial instruments for collection referred to in Article 3, other than bonds, excluding those intended for listing on regulated markets issued by companies with shares listed on regulated markets, are issued with a minimum unit denomination of not less than 50,000 euros.

2. The identity of the guarantor and the amount of the guarantee must be indicated on the financial instruments for collection referred to in Article 3 and on the registers related to them.

SECTION III COLLECTION AMONG MEMBERS, EMPLOYEES AND WITHIN GROUPS

Article 6 (Collection among members)

1. Companies may collect savings from members, by methods other than the issuance of financial instruments, provided that this right is provided for in the statutes. In any case, the collection of demand funds and every form of collection connected to the issuance or management of means of payment is precluded.

2. Companies other than cooperatives may carry out the collection referred to in paragraph 1 exclusively among members who hold at least 2 percent of the share capital resulting from the last approved balance sheet and have been registered in the members' register for at least three months. These conditions are not required for partnerships.

3. Cooperative societies may carry out the collection referred to in paragraph 1

provided that they have no more than 50 members. For cooperative societies with more than 50 members, the total amount of the aforementioned collection must not exceed three times the share capital, the legal reserve and the available reserves resulting from the last approved balance sheet. This limit is increased to five times if the collection is supported, for at least 30 percent, by a guarantee issued by the subjects identified in the implementing instructions of the Bank of Italy or when the company adheres to a guarantee scheme having the characteristics indicated in the same instructions.

Article 7 (Collection among employees)

1. Companies may collect savings from their own employees, by methods other than the issuance of financial instruments, provided that this right is provided for in the statutes. In any case, the collection of demand funds and every form of collection connected to the issuance or management of means of payment is precluded.

2. For companies other than cooperatives, the total amount of the collection referred to in paragraph 1 must not exceed the share capital, the legal reserve and the available reserves resulting from the last approved balance sheet.

3. For cooperative societies, the total amount of the collection referred to in paragraph 1 must not exceed, together with that among members, the limits provided for in paragraph 3 of Article 6 for cooperatives with more than 50 members.

Article 8 (Collection within groups)

1. Companies may collect savings, by methods other than the issuance of financial instruments, from holding companies, subsidiaries or affiliated companies pursuant to Article 2359 of the Civil Code and from subsidiaries controlled by the same holding company.

2. For the purposes of this regulation, the Bank of Italy defines the notion of "group" to which subjects of a cooperative nature participate.

SECTION IV FINANCIAL COMPANIES

Article 9 (Collection by financial companies)

1. For companies that carry out the activity of granting financing to the public in any form, the issuance of financial instruments for collection is permitted for a total amount not exceeding the share capital, the legal reserve and the available reserves resulting from the last approved balance sheet.

2. For the companies referred to in paragraph 1, registered in the special list referred to in Article 107 of the TUB, the issuance of financial instruments for collection is permitted for a total amount not exceeding twice the share capital, the legal reserve and the available reserves resulting from the last approved balance sheet. The Bank of Italy may increase this limit up to five times if the aforementioned companies have shares listed on regulated markets and the financial instruments for collection are intended for listing on regulated markets.

3. For the companies referred to in paragraphs 1 and 2, constituted in the form of limited liability companies and cooperative societies to which the rules on limited liability companies apply, the collection referred to in the same paragraphs 1 and 2 is carried out in compliance with what is provided for, respectively, in Articles 2483 and 2526 of the Civil Code.

4. For the companies referred to in paragraphs 1 and 2, constituted in the form of cooperative societies, the collection of savings from members by methods other than the issuance of financial instruments is not permitted.

SECTION V FINAL PROVISIONS

Article 10 (Transitional provisions)

1. The Bank of Italy issues implementing instructions for this Deliberation, having regard, in particular, to the protection of the reserves of the activity of collecting savings from the public and of banking activity.

2. 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 implementing instructions of the Bank of Italy.

Article 11 (Repealed provisions)

1. The following provisions are repealed by this Deliberation:

CICR Deliberation of 3 March 1994, containing the general implementing regulation of Article 11 of the consolidated text of laws on banking and credit matters, excluding Article 5, paragraph 1;

DM 7 October 1994, on the characteristics of financial bills and investment certificates;

DM 29 March 1995, concerning the collection of savings among the own employees of capital companies and cooperatives, excluding Article 2, on the regulation of collection among members of bodies constituted among employees of the same public administration;

CICR Deliberation 3 May 1999, concerning limits and criteria for the issuance of bonds by cooperative societies.

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

Rome, 19 July 2005

THE PRESIDENT D. Siniscalco [signature]