Implementation Methods for Article 4-septies.2 of Legislative Decree 58/1998 (TUF)

Legal Headquarters Via Nazionale, 91 - 00100 Rome Capital paid-in capital Euro 7,500,000,000.00 Tel. 06/47921 - VAT No. 00950501007 - www.bancaditalia.it 2 Page 1/3 542594/22 DEPARTMENT OF BANKING AND FINANCIAL SUPERVISION MACROPRUDENTIAL REGULATION AND ANALYSIS SERVICE Implementation Methods for Article 4-septies.2 of Legislative Decree 58/1998 (TUF)

With Legislative Decree of 3 August 2022, No. 131 (the Decree), national legislation has been aligned with the provisions of Regulation (EU) 2017/2402 (the Securitisation Regulation), which establishes a general framework for securitisation and creates a specific framework for Simple, Transparent, and Standardised (STS) securitisations. Based on the new Article 4-septies.2 of the TUF and without prejudice to the tasks of the ECB, the Bank of Italy is the competent authority to supervise the obligations under the following articles of the Securitisation Regulation when a less significant bank (1), a securities investment firm (SIM) other than those of class 1, as defined by Article 1, paragraph 1, letter e-bis) of the TUF, a financial intermediary under Article 106 of the TUB, or an Italian manager (2) (hereinafter, "supervised intermediaries") are involved in the securitisation operation:

1. Article 5 (due diligence obligations for institutional investors), when one of the aforementioned subjects holds a position towards a securitisation or receives instructions to fulfill the obligations of another institutional investor;
2. Articles 6 (risk retention), 7 (transparency obligations), 8 (prohibition of re-securitisation), and 9 (credit granting criteria) in securitisations where one of these subjects intervenes in the role of originator, original lender, sponsor, or securitisation special purpose entity (SSPE). If the originators, original lenders, sponsors, and SSPEs in the securitisations are not all supervised intermediaries of the Bank of Italy, the latter exercises supervisory and investigative powers through the supervised intermediaries, to whom the necessary information is transmitted by the non-supervised subjects. The Bank of Italy retains the right to request information directly from non-supervised subjects.

With the aim of ensuring compliance with the regulatory framework established by the Securitisation Regulation and allowing the Bank of Italy to immediately exercise the aforementioned powers, preliminary indications are provided to supervised intermediaries in the attached note.

To minimize potential burdens on intermediaries, notification obligations are currently provided only with reference to Articles 6 to 8, in a manner consistent with the approach adopted by the ECB with reference to significant banks. Notification obligations are not provided for Articles 5 and 9. However, full compliance with these latter articles is a necessary prerequisite for carrying out securitisation operations or assuming risks in positions towards securitisations; the related requirements, partly already incorporated into current Supervision Rules, remain subject to verification during ordinary supervisory activities.

Similarly, the methods by which supervised intermediaries must collect information from non-supervised subjects potentially involved in securitisations are not defined. For this latter type of operations, the Bank of Italy will identify specific rules within the secondary provisions that will be placed under public consultation.

1 For less significant institutions (LSI), we mean subjects that do not fall within the definition of Article 2(16) of Regulation (EU) 468/2014 of the European Central Bank establishing the framework for cooperation within the Single Supervisory Mechanism between the European Central Bank and national competent authorities and with national designated authorities (SSM Framework Regulation). 2 For the definition of "manager", reference is made to Article 1, paragraph 1, letter q-bis of the TUF.

Legal Headquarters Via Nazionale, 91 - 00100 Rome Capital paid-in capital Euro 7,500,000,000.00 Tel. 06/47921 - VAT No. 00950501007 - www.bancaditalia.it 2 Page 2/3 542594/22 COMMUNICATION REGARDING THE NOTIFICATION OF SECURITISATION OPERATIONS

1. Scope of Application
   This communication establishes the methods by which less significant banks (3), securities investment firms (SIM) other than those of class 1, as defined by Article 1, paragraph 1, letter e-bis) of the TUF, financial intermediaries under Article 106 of the TUB, and Italian managers (4) carry out notifications regarding Articles 6 to 8 of Regulation (EU) 2017/2402 (hereinafter, "Securitisation Regulation") when acting as "originators", "original lenders", "sponsors", or special purpose entities ("SSPE") (5) of securitisation operations (hereinafter, "Supervised Intermediaries").

The communication identifies the information that Supervised Intermediaries holding one of the indicated roles are required to transmit to the Bank of Italy at the time of the securitisation operation's realization, as well as during its duration when the operation is subject to modifications that may affect compliance with Articles 6 to 8.

The requirements of Articles 6 to 8 apply to all securitisations falling within the scope of application of the Securitisation Regulation.

The notification obligations under this communication apply to all securitisation operations issued (6) after 1 January 2023 (7).

2. Notifications to the Bank of Italy
   a. Organizational structures and notification of compliance with the Securitisation Regulation The communication of compliance of the securitisation operation with the requirements provided for in Articles 6 to 8 of the Securitisation Regulation must be transmitted by a letter signed by the head of the management body. Control functions – in line with what is provided for by the Securitisation Regulation and the Bank of Italy's Circulars on internal controls (8) – are required to verify the adequacy of the policies, procedures, and specific measures adopted by Supervised Intermediaries to ensure the effective continuous ability to comply with the provisions of the Securitisation Regulation.

Technical details on the methods for submitting notifications and the data model are published on the Bank of Italy's website.

3 For less significant institution (LSI), we mean subjects that do not fall within the definition of Article 2(16) of Regulation (EU) 468/2014 of the European Central Bank establishing the framework for cooperation within the Single Supervisory Mechanism between the European Central Bank and national competent authorities and with national designated authorities (SSM Framework Regulation). 4 For the definition of "manager", reference is made to Article 1, paragraph 1, letter q-bis of the TUF. 5 For the definitions of "originator", "sponsor", "original lender", and "SSPE", reference is made to Article 2 of the Securitisation Regulation. 6 By issuance date, we mean the date on which the exposure was securitised for the first time; this date may coincide with: (i) the issuance date of the securities (traditional securitisation); (ii) the date of the guarantee contract (synthetic securitisation); (iii) the date on which the ABCP security was issued for the first time (ABCP securitisation). See Article 43(9) of the Securitisation Regulation. 7 The Bank of Italy may request information on securitisation operations carried out before 1 January 2023. 8 For banks, Part I, Title IV, Chapter 3 of Circular 285/2013, including specific provisions provided for risks arising from securitisation operations. For Financial Intermediaries under Article 106 of the TUB, Title III, Chapter I of Circular 288/2015.

b. Timing and methods of notification
New operations must be notified to the Bank of Italy within one month from the issuance date (9).
For operations carried out by 31 March 2023, intermediaries have two months to effect the notification.

c. Information to be sent at the time of operation issuance
Originators, sponsors, or original lenders are required to provide the Bank of Italy with information regarding each new operation at the time of issuance, using the data model, which contains information regarding the following categories: (i) information on the operation; (ii) information on securitised exposures; (iii) information on positions related to the securitisation; (iv) compliance with Articles 6 to 8 of the Securitisation Regulation.

d. Information to be provided on a continuous basis The requirements of Articles 6 to 8 of the Securitisation Regulation must be satisfied on a continuous basis. Supervised Intermediaries are required to notify the Bank of Italy, without delay, any significant event as defined in Article 7, paragraph 1, letter g), of the Securitisation Regulation that, affecting the characteristics of the operations, may have effects on the compliance with these articles.

The obligation to notify significant events to the Bank of Italy also applies to securitisation operations issued after 1 January 2019.

Notifications for subsequent significant events are subject to the provisions of paragraph 2.b.

9 See note 4.