CICR and Urgent DM Deliberations - Deliberation of 4 March 2003, No. 286

Interministerial Committee
for Credit and Savings

SECRETARIAT 2 8 6
DELIBERATION 4 MARCH 2003

Regulation of the transparency of contractual conditions for banking and financial operations and services.

THE INTERMINISTERIAL COMMITTEE FOR
CREDIT AND SAVINGS

HAVING REGARD to Titles I and VI of Legislative Decree No. 385 of 1 September 1993, and subsequent amendments (the Banking Act);

HAVING REGARD to Article 115, paragraph 1, of the Banking Act, according to which the provisions of Chapter I of Title VI apply to activities carried out within the territory of the Republic by banks and financial intermediaries;

HAVING REGARD to the provisions declaring the transparency regulations issued pursuant to Title VI of the Banking Act applicable to other operations, and in particular Articles 123 and 124 of the same Banking Act, Article 16, paragraph 4, of Law No. 108 of 7 March 1996 concerning credit mediation activities, and Presidential Decree No. 144 of 14 March 2001 concerning bancoposta services;

HAVING REGARD to Article 23, paragraph 4, of Legislative Decree No. 58 of 24 February 1998 (the Consolidated Act on Financial Intermediation), according to which the provisions of Title VI of the Banking Act do not apply to investment services nor to the ancillary service provided for in Article 1, paragraph 6, letter f), of the same Decree;

HAVING REGARD to Article 116, paragraph 3, of the Banking Act, which grants the CICR the power to issue regulations on the publicity of operations and services;

HAVING REGARD to Article 117, paragraph 2, of the Banking Act, which grants the CICR the power to issue regulations on the form of contracts;

Interministerial Committee
for Credit and Savings

SECRETARIAT
HAVING REGARD to Article 118, paragraph 1, of the Banking Act, which grants the CICR the power to establish the methods and timeframes for communicating to the client modifications to contractual conditions made unilaterally;

HAVING REGARD to Article 119, paragraph 1, of the Banking Act, which grants the CICR the power to indicate the content and methods of periodic communications to customers;

HAVING REGARD to Article 3, paragraph 4, of Legislative Decree No. 253 of 28 July 2000, implementing Directive 97/5/EC on cross-border credit transfers;

HAVING REGARD to Art. 55 of Law No. 39 of 1 March 2002 (Provisions for the fulfillment of obligations arising from Italy's membership in the European Communities - Community Law 2001), implementing Directives 2000/46/EC and 2000/28/EC regarding electronic money institutions;

CONSIDERING the need to issue provisions aimed at ensuring that customers are provided with clear and comprehensive information on the conditions and characteristics of the operations and services offered;

CONSIDERING that comparability between different offers favors the efficiency and competitiveness of the financial system;

DEEMING that the evolution of intermediaries' operations and technology require constant updating of the transparency regulations, also through provisions by the Bank of Italy;

ON THE PROPOSAL of the Bank of Italy, formulated after hearing the UIC pursuant to Article 127 of the Banking Act;

D E L I B E R E S

SECTION I

GENERAL PROVISIONS

Interministerial Committee
for Credit and Savings

SECRETARIAT
Article 1

(Definitions)

1. For the purposes of this Deliberation, the following are defined:
   *a) "Banking Act", the Legislative Decree No. 385 of 1 September 1993, and subsequent amendments; *b) "intermediaries", banks and financial intermediaries registered in the general list referred to in Article 106 of the Banking Act; *c) "distance communication techniques", techniques for contacting customers, other than advertising announcements, which do not involve the physical and simultaneous presence of the customer and the intermediary or its representative; *d) "off-premises offer", the offer made in a place other than the registered office or branches of the intermediary.

Article 2

(General Criteria)

1. The information provided for by this Deliberation is made available to customers, with methods adequate to the form of communication used, in a clear and comprehensive manner, also taking into account the characteristics of the relationships and the recipients.

SECTION II

PUBLICITY AND CONTRACTS

Article 3

(Operations and Services)

1. The provisions on publicity, provided for in Articles 4 to 9, apply to the operations and services indicated in the Annex to this Deliberation. In relation to the evolution of intermediaries' operations and markets, the Bank of Italy may establish that other operations and services fall within the types indicated in the same Annex.

Interministerial Committee
for Credit and Savings

SECRETARIAT
Article 4

(Notice)

1. In accordance with the provisions issued by the Bank of Italy, intermediaries display in premises open to the public and make available to customers a notice titled "main transparency rules", containing the indication of rights and protection tools provided for pursuant to Title VI of the Banking Act.

Article 5

(Information Sheets)

1. Intermediaries make "information sheets" available to customers containing information on the intermediary, on interest rates, fees, charges, and other contractual conditions, as well as on the main typical risks of the operation or service.

2. The information sheets are dated and updated promptly; a copy of the sheets is kept by the intermediary for five years.

3. The Bank of Italy may prescribe that the detail of the information sheets be graduated in relation to the diffusion and complexity of the operations and services.

4. The Bank of Italy may identify operations and services for which, due to particular complexity, the intermediary is required to deliver the information sheet to the customer before the conclusion of the contract.

Interministerial Committee
for Credit and Savings

SECRETARIAT
Article 6

(Off-premises offers and distance communication techniques)

1. In the case of an off-premises offer, the party making the offer delivers to the customer the notice and information sheets referred to in Articles 4 and 5 before the conclusion of the contract.

2. Where the intermediary uses distance communication techniques, the notice and information sheets are made available to customers also through such techniques.

Article 7

(Advertising Announcements)

1. Advertising announcements, however made, by which the intermediary makes known the availability of operations and services, specify their nature as advertising messages and indicate that information sheets are available to customers.

Article 8

(Pre-contractual Information)

1. Before the conclusion of the contract, the customer has the right to obtain a complete copy for a considered evaluation of the content. The delivery of the copy does not bind the parties to conclude the contract.

Article 9

(Contractual Information)

1. A document summarizing the main contractual conditions, drawn up according to the criteria indicated by the Bank of Italy, is attached to the contract.

Interministerial Committee
for Credit and Savings

SECRETARIAT
2. The Bank of Italy identifies the operations and services for which, due to technical characteristics, intermediaries are obliged to make known a "Synthetic Indicator of Cost" (ISC) including interest and charges that contribute to determining the effective cost of the operation for the customer, according to the formula established by the Bank of Italy itself.

Article 10

(Form of Contracts)

1. The Bank of Italy may identify forms other than written form for operations and services carried out based on contracts drawn up in writing, as well as for operations and services, subject to publicity pursuant to this Deliberation, which are of an occasional nature or involve charges of a low amount for the customer.

SECTION III

COMMUNICATIONS TO CUSTOMERS

Article 11

(Communication of contractual changes unfavorable to customers)

1. In contracts of duration, changes unfavorable to the customer, concerning interest rates, prices, and other conditions of operations and services, are communicated to the customer with clear highlighting of the changes made.

2. Generalized unfavorable changes may be communicated to customers in an impersonal manner, through specific insertions in the Official Gazette of the Italian Republic, also for the purposes of exercising the right of withdrawal provided for in Article 118, paragraph 3, of the Banking Act.

3. The changes referred to in paragraph 2 are in any case communicated individually to the customer at the first available opportunity, within the framework of periodic communications or those regarding specific operations.

4. Interest rate changes resulting from variations in contractually provided parameters and independent of the will of the parties are not subject to the communication obligations referred to in this Article.

5. The Bank of Italy issues provisions regarding the content and methods of communications.

Article 12

(Periodic Communications)

1. In contracts of duration, intermediaries periodically provide customers with analytical communications on the progress of the relationship. In every communication, the interest rate and other conditions in force are indicated.

2. The Bank of Italy issues provisions regarding the content and methods of communications.

SECTION IV

FINAL PROVISIONS

Article 13

(Implementation Provisions)

1. The Bank of Italy issues implementation provisions for this Deliberation. For intermediaries registered in the general list referred to in Article 106 of the Banking Act, the provisions are issued after hearing the UIC.

2. The provisions of this Deliberation and the implementation provisions issued by the Bank of Italy apply, insofar as compatible, to subjects registered in the specific sections of the general list referred to in Article 106 of the Banking Act, to subjects exercising consumer credit referred to in Article 121, paragraph 2, letter c), of the Banking Act, to credit mediators referred to in Article 16 of Law No. 108 of 7 March 1996, to Poste Italiane spa, for bancoposta activities only as per Presidential Decree No. 144 of 14 March 2001, and to electronic money institutions, referred to in Articles 114-bis and following of the Banking Act, introduced by Art. 55 of Law No. 39 of 1 March 2002. The assessments of compatibility of the provisions are left to the respective supervisory authorities.

Article 14

(Transitional Provisions)

1. The Decree of the Minister of the Treasury of 24 April 1992, containing "Norms for the transparency of banking and financial operations and services", is repealed, pursuant to Article 161, paragraph 5, of the Banking Act.

2. This Deliberation and the implementation provisions, which the Bank of Italy will issue within one hundred and twenty days from the publication of this Deliberation, will enter into force on 1 October 2003.

3. For relationships existing on the date referred to in paragraph 2, the general criteria and provisions on communications to customers contained in this Deliberation and in the implementation provisions of the Bank of Italy apply.

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

Rome, 4 March 2003

THE PRESIDENT
G. Tremonti

Interministerial Committee
for Credit and Savings

SECRETARIAT
Annex

OPERATIONS AND SERVICES

— deposits
— bonds
— certificates of deposit and savings certificates — other debt securities — mortgages — credit lines — bank advances — signature credits — portfolio discounts — financial leasing — factoring — other financing — received guarantees — correspondence accounts — collections and payments — issuance and management of payment instruments — issuance of electronic money — deposit and withdrawal of cash at automated teller machines — purchase and sale of foreign currency — currency intermediation — custody and administration of financial instruments — safe deposit box rental