Regulation on the Adoption of Regulatory or General Content Acts by the Bank of Italy in the Exercise of Supervisory Functions

Regulation of 9 July 2019. Regulation concerning the discipline for the adoption of acts of a regulatory nature or of general content by the Bank of Italy in the exercise of supervisory functions, pursuant to Article 23 of Law No. 262 of 28 December 2005

THE BANK OF ITALY

HAVING REGARD to Article 23 of Law No. 262 of 28 December 2005 (containing provisions for the protection of savings and the regulation of financial markets), concerning the procedures for the adoption of regulatory and general acts by the Bank of Italy, CONSOB, IVASS, and COVIP; having regard in particular to:

– paragraph 1, pursuant to which measures having a regulatory nature or of general content, excluding those relating to internal organization, must be motivated with reference to the regulatory and supervisory choices of the sector or the matter in question;

– paragraph 2, which provides that the acts referred to in paragraph 1 of the same article are accompanied by a report illustrating their consequences on regulation, on the activity of companies and operators, and on the interests of investors and savers. In defining the content of general regulatory acts, the Authorities adopting them shall in any case take into account the principle of proportionality, understood as a criterion for the exercise of power adequate to achieve the objective, with the least sacrifice of the interests of the addressees. To this end, they shall consult the representative bodies of supervised entities, financial service providers, and consumers;

– paragraph 3, which provides that the Authorities shall subject the content of the regulatory acts adopted by them to periodic review, at least every three years, to adapt them to the evolution of market conditions and the interests of investors and savers;

– paragraph 4, pursuant to which the Authorities shall regulate with their own regulations the application of the principles referred to in the same article, also indicating the cases of necessity and urgency or reasons of confidentiality for which derogation is permitted.

HAVING REGARD to Legislative Decree No. 385 of 1 September 1993, and subsequent amendments, containing the Consolidated Law of Banking and Credit Legislation (Banking Consolidated Law);

HAVING REGARD to Legislative Decree No. 58 of 24 February 1998, and subsequent amendments, containing the Consolidated Law of Provisions on Financial Intermediation (Financial Consolidated Law);

HAVING REGARD to Legislative Decree No. 142 of 30 May 2005, implementing Directive 2002/87/EC on the supplementary supervision of credit institutions, insurance undertakings, and investment firms belonging to a financial conglomerate;

HAVING REGARD to Legislative Decree No. 180 of 16 November 2015, implementing Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms;

HAVING REGARD to Legislative Decree No. 231 of 21 November 2007, implementing Directive 2005/60/EC on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing, as well as Directive 2006/70/EC laying down implementing measures;

HAVING REGARD to Regulations (EU) No. 1093/2010, No. 1094/2010, and No. 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing European Supervisory Authorities (European Banking Authority, European Insurance and Occupational Pensions Authority, and European Securities and Markets Authority);

HAVING REGARD to the Regulation of the Bank of Italy of 24 March 2010 concerning “the discipline for the adoption of acts of a regulatory nature or of general content by the Bank of Italy in the exercise of banking and financial supervisory functions, pursuant to Article 23 of Law No. 262 of 28 December 2005”;

CONSIDERING that Article 23 of Law No. 262 of 2005 indicates the criteria that supervisory authorities must follow to exercise their regulatory powers effectively and efficiently, while pursuing their respective objectives; in this perspective, the criterion of the least sacrifice of the interests of the addressees constitutes an explicit expression of the principle of proportionality understood as the exercise of power adequate to achieve the objective;

CONSIDERING that the principle of proportionality requires that activities carried out within regulatory procedures, and in particular impact analyses and consultations, be guided by criteria of economy and efficiency in relation to the relevance of risks for supervisory, resolution, and anti-money laundering and counter-terrorist financing purposes;

CONSIDERING the need to update the discipline on the adoption of acts having a regulatory nature or of general content in order to adapt it to the evolution of the European regulatory architecture and framework, as well as to increase the efficiency of the production process and the quality of the Bank of Italy’s regulations;

ADOPTS the following Regulation:

Article 1 (Definitions) For the purposes of this Regulation, the following terms shall be understood as:

1. “regulatory acts”: acts having a regulatory nature or of general content within the competence of the Bank of Italy, adopted in the exercise of banking and financial supervisory, resolution, and anti-money laundering and counter-terrorist financing functions.

For the purposes of this Regulation, the following are not considered regulatory acts:

a) acts adopted in the exercise of functions other than banking and financial supervision, resolution, and anti-money laundering and counter-terrorist financing;

b) opinions, agreements, and other assessments formulated by the Bank of Italy in relation to acts having a regulatory nature or of general content within the competence of other Authorities;

c) memoranda of understanding and other agreements governing relations with other Authorities;

d) acts of mere formal revision of regulatory acts in force;

e) responses to inquiries;

f) acts having exclusively interpretative purposes. When these acts may determine significant impacts on the activity and organization of the addressees, Articles 3, 4, and 6 shall apply;

g) requests for information carried out in collaboration with other Authorities or within the framework of specific surveys, other than supervisory reports;

h) acts of internal organization and those not having external relevance;

i) regulations adopted pursuant to Law No. 241 of 7 August 1990;

j) regulations adopted pursuant to legislation on the processing of personal data.

2. “Authority”: institutions of the European Union, the European Banking Authority (EBA), the European Securities and Markets Authority (ESMA), the European Insurance and Occupational Pensions Authority (EIOPA), the European Systemic Risk Board (ESRB), the Italian Parliament, the Minister of Economy and Finance, the Interministerial Committee for Credit and Savings (CICR), and any other Authority or Body competent to issue acts whose implementation or transposition requires the adoption of regulatory acts by the Bank of Italy.

3. “RIA”: Regulatory Impact Assessment pursuant to Article 5.

4. “RIR”: Regulatory Impact Review pursuant to Article 7.

Article 2 (Scope of Application) This Regulation governs the procedures by which the Bank of Italy adopts regulatory acts and conducts consultations, RIA, and RIR.

Article 3 (Consultation)

1. Proposals for regulatory acts or their drafts shall be subject to consultation in accordance with the provisions of this Article.

2. Unless otherwise provided in paragraph 3, consultation shall take place in public form (“public consultation”) through the publication on the Bank of Italy’s website of a document (“consultation document”) that clarifies the context in which the regulatory act to be adopted is situated and its objectives. In particular, the consultation document shall contain:

a) the motivations for the proposals for regulatory acts or their drafts;

b) the proposals for regulatory acts or their drafts subject to consultation. In the event of publication of the draft of the regulatory act, the Bank of Italy shall specifically indicate the provisions subject to consultation;

c) the RIA and RIR, if any, carried out;

d) the methods and deadlines for submitting comments.

3. For justified reasons, the Bank of Italy may adopt consultation methods other than public consultation; this includes consultation restricted to industry associations or to subjects identified by the Bank of Italy based on the interests involved, for example when the regulatory acts are addressed to subjects sharing homogeneous interests.

4. The consultation may be supplemented, where appropriate, by other forms of dialogue with the addressees of the regulatory acts.

5. The deadline for the conclusion of the consultation shall be determined based on the nature, relevance, and complexity of the subject matter and compliance with the timeframes provided for the adoption of regulatory acts. Unless otherwise indicated by the Bank of Italy, the deadline shall be 60 calendar days from the date of commencement of the consultation.

Article 4 (Participation in Public Consultation)

1. Interested parties wishing to participate in the public consultation shall submit comments in accordance with the methods and deadlines established by the Bank of Italy. Comments shall specifically indicate the provisions of the proposals for regulatory acts or their drafts subject to consultation to which they refer, and, if applicable, the results of the RIA or RIR on which the formulation of such provisions is based.

2. The Bank of Italy may define the methods by which interested parties submit comments by publishing a specific form on its website.

3. Comments received within the framework of a public consultation shall be published on the Bank of Italy’s website.

4. An interested party may request, for justified confidentiality reasons, that the comments submitted not be published or be published in anonymous form. If the final version of the regulatory act accepts, even partially, the comments that the interested party requested to omit from publication, the Bank of Italy shall nevertheless publish such comments in anonymous form.

5. Comments from entities other than natural persons shall be submitted by the legal representative or by a delegated subject.

Article 5 (Regulatory Impact Assessment)

1. For the purposes of adopting regulatory acts, the Bank of Italy shall carry out an RIA examining the impact on the addressees as well as on the economic and financial system as a whole.

2. The RIA shall take into account the results of any RIR carried out.

3. The Bank of Italy shall make public the methods and procedures used to conduct the RIA, drawing on the best standards and practices defined at the national and international levels.

Article 6 (Outcome of Consultation and Adoption of the Act)

1. The Bank of Italy shall evaluate comments received during the consultation only if they are pertinent and relevant for defining the content of the regulatory acts. They do not entail an obligation to provide a specific response to each individual comment and do not constitute a binding constraint for the investigation. Comments received after the expiration of the consultation deadline shall not be subject to evaluation for the adoption of regulatory acts.

2. Without prejudice to the publication forms provided by law, the Bank of Italy shall publish the adopted regulatory acts on its website.

3. Upon the publication of regulatory acts subject to public consultation, or subsequently and in any case no later than sixty days, the Bank of Italy shall provide, through a specific document which may be drafted in summary form, an account of the evaluation of the comments examined for the purpose of defining the content of the adopted regulatory acts (“consultation report”).

4. The consultation report may contain the RIA or RIR on specific aspects of the regulatory acts, if deemed appropriate in light of the comments received.

5. The Bank of Italy shall set out the motivations for the regulatory choices made.

Article 7 (Review of Regulatory Acts and RIR)

1. The Bank of Italy shall normally carry out the RIR on regulatory acts, or parts thereof, on which the RIA has been conducted. The Bank of Italy may also carry out the RIR on regulatory acts, or parts thereof, that have revealed significant impacts on the addressees, or on the economic and financial system as a whole, or for which critical issues have been identified during implementation.

2. The Bank of Italy shall make public the methods and procedures used to conduct the RIR, drawing on the best standards and practices defined at the national and international levels.

3. Also in light of the results of the RIRs carried out, the Bank of Italy shall identify, at least every three years, the regulatory areas to be subject to review.

Article 8 (Cases of Derogation)

1. The application of Articles 3, 4, 5, and 6, paragraphs 1, 2, 3, and 4, may be excluded, in whole or in part, in cases of necessity and urgency or for reasons of confidentiality, particularly when at least one of the following conditions is met:

a) exceptional changes in market conditions, or specific requirements for the protection of the objectives assigned to the Bank of Italy by the legal system, impose the timely adoption of regulatory acts;

b) knowledge of the regulatory act prior to its adoption may compromise the achievement of its objectives;

c) a superior legal source imposes the urgent adoption of regulatory acts or establishes a deadline for its implementation that does not allow for the application of the cited Articles.

2. The application of Articles 3, 4, 5, and 6, paragraphs 1, 2, 3, and 4, and of Article 7, may be excluded, in whole or in part, when the regulatory act:

a) merely implements or transposes in conformity the content of acts, even non-binding, of other European Authorities already subject to consultation or RIA procedures; or

b) is merely an adaptation to acts of other Authorities that are directly applicable or binding.

3. The application of Article 5 is excluded for regulatory acts, or parts thereof, when they do not entail additional costs for the addressees or, in any case, do not have significant impacts on the addressees or on the economic and financial system as a whole.

4. The Bank of Italy shall provide motivation regarding the existence of one of the cases of derogation referred to in this Article.

Article 9 (Advisory Panels) Without prejudice to Articles 3, 4, 6, and 7, the Bank of Italy may establish advisory panels representative of intermediaries and clients to achieve the objectives of this Regulation.

Article 10 (Memoranda of Understanding with Other Authorities) For the adoption of regulatory acts to be adopted in agreement, or based on other agreements however named, with other Authorities, this Regulation shall apply, unless otherwise provided by the memoranda of understanding or other agreements.

Article 11 (CICR Resolution Proposals)

1. The Bank of Italy may submit to consultation, pursuant to Article 3, the resolution proposals for the CICR. For justified reasons, the consultation may also take place jointly with that on proposals for regulatory acts, or their drafts, within the competence of the Bank of Italy necessary to implement the resolutions of the CICR. The application of Article 10 remains unaffected.

2. Regarding the resolution proposals for the CICR and the resolutions of the CICR, the Bank of Italy may carry out, respectively, the RIA and the RIR pursuant to Articles 5 and 7. For justified reasons, the RIA and the RIR may also be carried out jointly with those on regulatory acts within the competence of the Bank of Italy necessary to implement the resolutions of the CICR.

Article 12 (Final Provisions)

1. This Regulation shall be published on the website of the Bank of Italy and in the Official Gazette of the Italian Republic.

2. From the entry into force of this Regulation, the Regulation of 24 March 2010 implementing Article 23 of Law No. 262 of 28 December 2005 is repealed.

The Governor signature 1