Regulation No. 2013-06: Miscellany of Targeted Revisions to Current Supervisory Provisions

THE GENERAL DIRECTOR
OF THE CENTRAL BANK OF THE REPUBLIC OF SAN MARINO

HAVING REGARD to Law No. 165 of 17 November 2005, and in particular Article 39, which grants the Central Bank of the Republic of San Marino the power to issue measures containing binding and general provisions;

HAVING REGARD to the Statute of the Central Bank of the Republic of San Marino approved by Law No. 96 of 29 June 2005, and in particular Article 30, paragraph 3 of the said Statute, according to which acts of the Central Bank in matters of supervision, deliberated by the Supervisory Coordination, are issued by the General Director;

CONSIDERING the opportunity, on the one hand, to consolidate at the regulatory level the guidelines and pronouncements already expressed by the Supervisory Coordination, and on the other hand, to make "targeted" updates, also taking into account requests from the "system";

CONSIDERING the need to readjust certain deadlines and update certain forms;

CONSIDERING that the modifications introduced by this Regulation have no substantial impact, also for the purposes of Article 38, paragraph 5, on the supervised subjects to whom it is addressed;

HAVING REGARD to the deliberations of the Supervisory Coordination and the Board of Directors by which the text of Regulation No. 2013-06, named "Miscellany of Targeted Revisions to Current Supervisory Provisions", was approved;

ISSUES

the attached Regulation No. 2013-06 which enters into force on today's date.

San Marino, 19 December 2013

Signed: THE GENERAL DIRECTOR
Mario Giannini

MISCELLANY
OF TARGETED REVISIONS
TO CURRENT SUPERVISORY PROVISIONS year 2013 / number 06

Regulation No. 2013-06: Miscellany of Targeted Revisions to Current Supervisory Provisions

Article 1 – Amendments to Regulation No. 2009-04

1. The second paragraph of Article 9 of Reg. 2009-04 is replaced as follows:
   "2. INSURANCE COMPANIES shall transmit the reports referred to in Article 6 no later than 15 March following the closing of the financial year."

Article 2 – Amendments to Regulation No. 2007-02

1. The following letter is added to the first paragraph of Article 15 of Reg. 2007-02:
"d) situations incompatible with the retention of registration in the register, such as:

• the failure to open the INTERMEDIARY's offices to the public;
• the domiciliation of the INTERMEDIARY at the headquarters of another INTERMEDIARY registered in the same register (unless a collaboration agreement under exclusivity has been concluded with the same), professional offices or commercial establishments of other subjects unrelated to the INTERMEDIATION activity;
• the failure to collect correspondence and in particular that coming from the CENTRAL BANK."

2. The fourth paragraph of Article 16 of Reg. 2007-02 is replaced as follows:
"4. The procedure provided for by this article does not apply to the suspension provided for in Art. 12, paragraph 1, letters b), c) and d), which is ordered as soon as the prerequisite is ascertained, and in cases of particular urgency for which the CENTRAL BANK deems it appropriate to activate the procedure referred to in Art. 34, letter f) of Law No. 96 of 29 June 2005."

3. The words "for at least eighteen months" are deleted from paragraph 1 of Article 26 of Reg. 2007-02 and consequently, in paragraph 2 of the same article, letter b) is deleted and letter c) assumes the previous classification.

4. The following paragraphs are added to Article 31 of Reg. 2007-02:
"2. Insurance companies, included in the list referred to in the previous paragraph, are required to communicate to the CENTRAL BANK, within the subsequent thirty days, every modifying event of their legal status, which implies a variation of the indications contained in the said list. If the registered insurance companies are affected by extraordinary operations (e.g. transformations, mergers, demergers) that determine their extinction, the communication, within the subsequent thirty days, is made by the company that succeeds in the legal relations.

3. In the absence of the communication referred to in the previous paragraph, the CENTRAL BANK nevertheless has the power to proceed ex officio to update the information contained in the list in cases where it has come to know the data in the exercise of its supervisory functions."

5. Annex C of Reg. 2007-02 is replaced by the Annex to this Regulation.

Article 3 – Amendments to Regulation No. 2010-01

1. Point 10 of the first paragraph of Article I.I.2 of Reg. 2010-01 is replaced as follows:
   "10. 'Non-cooperative Countries or Territories': Countries, jurisdictions or territories for which the FATF or another FATF-Style Regional Body (including the Moneyval Committee of the Council of Europe) issue public statements or other measures (so-called 'Countries, jurisdictions or territories under close monitoring' as per the regulations issued by the Financial Intelligence Agency);"

2. The third paragraph of Article IV.I.3 of Reg. 2010-01 is replaced as follows:
   "3. The activities for the necessary achievement of the annual hours of mandatory training are organized one or more times during the year and, if a final test is provided for the purpose of verifying the level of effectiveness of the training initiative in general, the results of the test of each participant will remain strictly confidential and communicated, upon request, solely to their respective PROFESSIONAL TRUSTEES."

Article 4 – Amendments to Regulation No. 2013-04

1. Points 7 and 8 of the first paragraph of Article 2 of Reg. 2013-04 are replaced as follows:
"7. 'ECB List': list of compliant equipment published on the website of the European Central Bank and reported, with a hyperlink, on the specific page of the website www.bcsm.sm;
8. 'CTSE List': list of compliant equipment published on the website of the European Commission – Anti-Fraud Office (OLAF) and reported, with a hyperlink, on the specific page of the website www.bcsm.sm;"

2. In point 19 of the M1 minutes, Annex 4 to Reg. 2013-04, "contact details" is replaced with "address".

3. The third paragraph of Article 13 of Reg. 2013-04 is replaced as follows:
"3. The technical instructions on the methods for sending reports are contained in the 'Operational Manual for statistical reports of cash handlers' which will be made available to REPORTING ENTITIES, in its first version, on the BCSM website (www.bcsm.sm) at least 60 days in advance of the expiry of the statistical collection obligations referred to in the following Article 32, paragraph 1."

4. Article 32 of Reg. 2013-04 is replaced as follows:
"Article 32 - Entry into force
1. This Regulation enters into force on 31 August 2013 and the reporting obligations referred to in the previous Article 16 run from the second reference period following, coinciding with the second calendar semester of the year 2014.
2. Without prejudice to what is provided in the previous paragraph 1, taking into account the coincidence in BCSM of the role of National Competent Authority (pursuant to Article 2, point 3, of the LAW) and the function of cash handler within the limits of the banking activity carried out by the Treasury Department (pursuant to point 13, letter e), of the same article of LAW), the forms, scopes and methods of application to itself of the provisions of this Regulation will be defined by BCSM with specific internal self-regulation."

Article 5 – Amendments to Regulation No. 2013-05

1. Paragraphs 1 and 2 of Article 9 of Reg. 2013-05 are replaced as follows:
"Article 9 - Adjustments
1. Without prejudice to the obligation to communicate to its clientele, to be carried out at least by 15 January 2014, PSPs, by 31 January 2014, must apply to the same clientele the changes, if necessary, in line with the provisions of this Regulation, of the contractual conditions connected with the execution of TRANSFERS and DIRECT DEBITS.
2. The BENEFICIARY of a NATIONAL DIRECT DEBIT service must previously inform the PAYER of the intention to avail themselves, from 1 February 2014, of the DIRECT DEBIT in accordance with what is provided in this Regulation with a notice of at least 15 days with respect to the date of activation of the service and, in any case, not later than 15 January 2014."

Article 6 – Amendments to Regulations Nos. 2007-07 and 2011-03

1. The following paragraph is added to Article IV.III.5 of Reg. 2007-07 and Reg. 2011-03:
   "2. In cases of appointment of only the General Director, the deadline for transmission to the CENTRAL BANK, referred to in the previous paragraph, runs from the date on which the resolution of the Board of Directors has been adopted in definitive form."

2. Point 49 of Article I.I.2 of Reg. 2011-03 is replaced as follows:
   "49. 'Gross intermediary margin': gross intermediate income result determined as the algebraic sum of the following income statement items of the balance sheet schema:
   MIL = 'revenues from sales and services' + 'financial revenues' - 'costs for securities trading' - 'financial charges' – 'depreciation of leased fixed assets';"

3. Point 24 of Article I.I.2 of Reg. 2007-07 and Reg. 2011-03 is replaced as follows:
   "24. 'NPLs (Non-Performing Loans)': the entire credit exposure for on-balance sheet and off-balance sheet items towards subjects in a state of insolvency, even if not judicially ascertained, or in substantially equivalent situations, independently of the loss provisions formulated as well as any restructuring of the said credits. The existence of any guarantees (real or personal) securing the exposures is disregarded. Exposures towards public entities in a state of financial distress are included, as well as those arising from resolved leasing contracts, until new financial leasing of the same goods to another lessee or sale of the said goods to third parties, with consequent recovery of the credit within the limits of the sum collected from the sale or computed for the new leasing contract, regardless of the repurchase of full availability of the good. The entire exposure includes capitalized interest and expenses incurred for the recovery activity."

4. The third paragraph of Article VII.II.3 of Reg. 2007-07 and Reg. 2011-03 is replaced as follows:
   "3. With reference to the deductions of net capital losses on securities referred to in paragraph 2, the implicit capital gains and capital losses in the fixed portfolio are offset taking into account any hedging contracts on fixed securities. If the overall balance resulting from the offset has a positive sign, no deduction from supervisory capital is required. If the overall balance is negative, it must be offset with any implicit capital gains present in the non-fixed portfolio. 50% of any further negative residual (net capital loss) must be deducted from the computation of supervisory capital. For the purposes of this paragraph, implicit capital gains and capital losses are not computable when concerning Sammarinese government securities forming part of the fixed portfolio."

Article 7 – Amendments to Circular No. 2012-03

1. The fourth indented paragraph, of letter c), of paragraph 5.4, of Circular No. 2012-03 is replaced as follows:
   "- the share of assets already deducted from supervisory capital is also excluded from the calculation of risk positions."

2. In letter h), of paragraph 8.4, of Circular No. 2012-03, the expression "general" is replaced by "generic".

3. The second point, of letter d), of paragraph 8.5, of Circular No. 2012-03 is replaced as follows:
   "for the purposes of applying the calculation of the aforementioned amortization, the quarterly share (5%) of the annual value provided by the regulations (20%), applied in reduction of the amount of the loan starting from the quarter in which the beginning of the last 5 years of residual life of the obligation falls."

4. The second point, of letter a), of paragraph 8.6, of Circular No. 2012-03 is replaced as follows:
   "any participations held in the capital of BCSM do not count, as this does not fall within the definition of 'FINANCIAL COMPANIES'. The following are also excluded from deductions:

• participations in FINANCIAL COMPANIES placed in voluntary or compulsory administrative liquidation. From the REPORT referred to the month in which the cancellation from the respective registers or lists occurred due to liquidation, the REPORTING SUBJECT will apply, from a prudential perspective, to exposures towards the FINANCIAL COMPANY in liquidation the same weighting factors provided for non-financial companies;
• contributions for the endowment of the deposit guarantee fund (former Delegated Decree No. 89/2011 and subsequent amendments)."

Article 8 – Amendments to Regulation No. 2006-03

1. The definitions referred to in letters o) and p), paragraph 1, Article 1, of Regulation No. 2006-03 are replaced as follows:
   "o) UCITS OIC: UCITS III type funds and foreign OICs falling within the scope of application of the EU UCITS Directive; p) Non-UCITS OIC: OICs other than UCITS OICs;"

2. As a result of what is provided in the previous paragraph, within Regulation No. 2006-03 the expression "UCITS III OIC" is replaced by "UCITS OIC" and the expression "NON-UCITS III OIC" is replaced by "NON-UCITS OIC".

3. The third paragraph of Article 163 of Regulation No. 2006-03 is replaced as follows:
   "3. The communication is not due if the offer referred to in paragraph 1 concerns UCITS OICs for which the documentation indicated in Article 164, paragraph 2, letter b) is available. The obligations referred to in Article 167 remain unchanged."

4. Letter b) of the second paragraph of Article 164 of Regulation No. 2006-03 is replaced as follows:
   "b) documentation in Italian or English relating to the public information, and in particular:
   1) copy of the management regulations of the OIC or other equivalent document;
   2) the latest prospectus or other documentation transmitted for the purposes of the offer to the competent authority of the country of origin and published, complete with the Italian language document containing key information for investors, drawn up in accordance with EU provisions (also known as KIID);
   3) the latest annual report and the subsequent semi-annual report, if published;
   4) indication of the sources where the value of OIC SHARES and notices regarding changes to management regulations and the exercise of rights connected to participation in the OIC (such as, by way of example, convening of assemblies, methods of payment of proceeds) are published."

5. Letter d) of the first paragraph of Article 167 of Regulation No. 2006-03 is replaced as follows:
   "d) deliver before subscription the informational documents required by regulations on investment solicitation, including the Italian language document containing key information for investors (also known as KIID) drawn up in accordance with EU provisions;"

6. Letter e) of the first paragraph of Article 167 of Regulation No. 2006-03 is replaced as follows:
   "e) make available to OIC participants information on the modifications made to the management regulations of the subscribed OICs;"

Article 9 – Amendments to Regulation No. 2008-01

1. The definitions referred to in letters aa) and bb), paragraph 1, Article 1, of Regulation No. 2008-01 are replaced as follows:
   "aa) UCITS OIC: UCITS III type funds and foreign OICs falling within the scope of application of the EU UCITS Directive; bb) Non-UCITS OIC: OICs other than UCITS OICs;"

2. As a result of what is provided in the previous paragraph, within Regulation No. 2008-01 the expression "UCITS III OIC" is replaced by "UCITS OIC" and the expression "NON-UCITS III OIC" is replaced by "NON-UCITS OIC".

Article 10 – Entry into force

1. This Regulation enters into force on the date of its issuance.

Article 11 – Consolidated Texts

1. The consolidated texts with the modifications introduced by this Regulation will be made available on the website of the Central Bank of the Republic of San Marino (www.bcsm.sm).

Central Bank of the Republic of San Marino
Regulation No. 2013-06 - Annex -

ANNEX
C
Schema of report on activities carried out

Central Bank of the Republic of San Marino
Regulation No. 2013-06 - Annex -

REPORT ON ACTIVITIES CARRIED OUT IN THE YEAR ___________ by the intermediary ____________________________________________________________________ registered at no. _______ of the Register established pursuant to Article 27 of Law 17 November 2005, No. 165.

Identifying elements of the reporter:
The intermediation activity was predominantly carried out in the capacity of:
(see point no. 1 of the instructions for completion)

• Agent (specify the Principal Insurance Company) ______________________________________________
• Sub-agent (specify the Principal Agent) _________________________________________
  (specify the Principal Insurance Company) _________________________________________
• Broker
• Other (specify)_______________________

Legal Representative ________________________________________________________________ Reference Name _____________________________________ Phone ________________ Public Opening Hours ___________________________________________________________

Rules of organization and conduct (Article 17) (only Sections A and B):
Civil liability insurance policy concluded in the reference year:
Maximum per claim __________________________________________________________ Global Maximum _____________________________________________________________

Methods of collecting premiums destined to insurance companies:
Payment to bank account held by ____________________________________________________ Other (specify) _______________________________________________________________

The intermediation activity, depending on the residence of the policyholder, was carried out on behalf of the following companies: (if necessary use more sheets)

Insurance contracts concluded with RESIDENT policyholder in SMR

Name of Insurance Company (see point n. 2 of instructions for completion)	Branch	Number of Policies (total) in force	of which concluded in the year under review	Total premiums intermediated in the year under review	of which relating to policies concluded in the year under review	Total premiums intermediated in the year under review net of commissions due to the intermediary
	Life
	Non-Life

Insurance contracts concluded with NON-RESIDENT policyholder in SMR

Name of Insurance Company (see point n. 2 of instructions for completion)	Branch	Number of Policies (total) in force	of which concluded in the year under review	Total premiums intermediated in the year under review	of which relating to policies concluded in the year under review	Total premiums intermediated in the year under review net of commissions due to the intermediary
	Life
	Non-Life

Sums paid out in the year under review: (if necessary use more sheets)

Name of Insurance Company (see point n. 3 of instructions for completion)	Amount Claims / Maturities / Surrenders paid in the year under review
	Beneficiaries Resident in SMR	Beneficiaries Non-Resident in SMR	Total
Life
Non-Life

During the year the intermediary availed itself of the following collaborators for the intermediation activity (only Sections A and B):
(if necessary use more sheets)

Surname	Name	Place and Date of Birth	Residence	Employee of the Intermediary (Yes/No)

The intermediary declares that, as of 31 December last year, the natural persons who, directly or indirectly, exercise control on the company pursuant to Article 2 of Law 17 November 2005, No. 165, are the following (only Section B):
(if necessary use more sheets)

Surname	Name	Place and Date of Birth	Residence

San Marino, dated ___________________

---

(signature of the legal representative)

Instructions for completion

1. Type of intermediary means:
   Agent: one who has received the mandate for insurance intermediation directly from an insurance company; Sub-agent: one who has received the mandate for insurance intermediation from an Agent of an insurance company; Broker: one who carries out intermediation activity without any mandate or sub-mandate link with an insurance company; Other: other cases attributable to insurance or reinsurance intermediation as defined by LISF different from the previous cases (to be specified by the interested party).
2. Indicate the full name of the insurance company on whose behalf – directly (as agent) or indirectly (as sub-agent) as well as for brokerage activity – insurance contracts were concluded in San Marino.
3. Indicate the full name of the insurance company, on whose behalf the related contracts are intermediated and sums for maturities, claims and surrenders (partial or total) are paid out directly (by the intermediary) or indirectly (by the insurance company).