Regulation No. 2020-05 - Amending Regulation No. 2007-01 on Reporting Procedures under Article 68 of Law No. 165 of 17 November 2005

VICE 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 and Article 68, the latter as integrated by Article 17 of Delegated Decree No. 61 of 29 March 2019;

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, pursuant to which acts of the Central Bank regarding supervision, deliberated by the Supervisory Coordination, are issued by the General Director, and Article 14, paragraph 5, which governs the case of absence or impediment of the General Director;

HAVING REGARD TO the outcomes of the public consultation procedure on the draft amending regulation of Regulation No. 2007-01, concluded on 10 December last;

HAVING REGARD TO the resolutions of the Supervisory Coordination and the Board of Directors by which the text of Regulation No. 2020-05, named "Amending Regulation of Regulation No. 2007-01 on Reporting Procedures under Article 68 of Law No. 165 of 17 November 2005," was approved;

ISSUES the attached Regulation No. 2020-05 which enters into force on 4 January 2021.

San Marino, 23 December 2020
Signed: THE VICE DIRECTOR f.f.
Avv. Giuseppe Ucci

AMENDING REGULATION OF
REGULATION NO. 2007-01
ON REPORTING PROCEDURES
UNDER ARTICLE 68 OF LAW NO. 165 OF 17 NOVEMBER 2005 Year 2020 / Number 05

Central Bank of the Republic of San Marino
Regulation No. 2020-05 – Amending Regulation No. 2007-01

Article 1 – Reporters

1. Article 1 of Regulation No. 2007-01 is replaced as follows:

"Article 1 – Subjects Legitimized to Make Reports

1. The following may submit reports under Article 68, paragraph 1, of Law No. 165 of 17 November 2005 (so-called 'complaint-reports'):
   a) clients of authorized entities, financial promoters, independent financial advisors, and insurance or reinsurance intermediaries; b) legally recognized associations representing consumer interests, directly or through professionals expressly appointed for this purpose.

2. Reports under Article 68, paragraph 1-bis, of Law No. 165 of 17 November 2005 (so-called 'whistleblowing reports') may be submitted by anyone, including corporate officers and employees of the entities listed in letter a) of the previous paragraph 1, who, in cases of complicity in the violation, will benefit from the mitigations provided in Article 31, paragraph 3, letters h) and i-quinques), of Law No. 96 of 29 June 2005 and subsequent amendments.

3. Under Article 68, paragraph 1-quater, of Law No. 165 of 17 November 2005, reports made under the previous paragraph:
   a) do not constitute a violation of any restrictions on the communication of data or information arising from contracts or legislative, statutory, regulatory, or administrative provisions, nor of obligations of confidentiality, professional secrecy, official secrecy, or banking secrecy under Article 36 of Law No. 165 of 17 November 2005; b) do not entail any type of liability if made in good faith."

Article 2 – Subject Matter

1. Article 2 of Regulation No. 2007-01 is replaced as follows:

"Article 2 – Subject Matter of Reports

1. Complaint-reports may concern solely alleged non-compliance with the provisions of Law No. 165 of 17 November 2005, including those to which the law itself refers and those listed in its annexes, and/or provisions contained in implementing measures issued by the Supervisory Authority, when such non-compliance results in alleged infringement of rights or consumer interests by the economic operators listed in letter a) of the previous Article 1, paragraph 1.

2. Among the complaint-reports referred to in the previous paragraph are therefore also those concerning errors committed, to the detriment of the reporters, by supervised intermediaries in communications transmitted by them in fulfillment of their obligations under Articles 50 (Central Risk Register) and 51 (Protest Information System) of Law No. 165 of 17 November 2005.

3. Whistleblowing reports concern alleged violations of the norms and provisions referred to in the previous paragraph 1 by anyone bound by them, even personally, in relation to the role exercised or office held within the ownership, organizational, or governance structures of the economic operators referred to in paragraph 1, when such violations do not infringe upon the legal sphere of the reporter or consumer interests.

4. Under the previous paragraph, the following may be reported:
   a) violations that have already occurred, of which the reporter has certainty, regardless of their ability to produce, as an attachment, documentation proving the reported violations; b) facts and circumstances, even ongoing, that the reporter presumes could represent violations of the aforementioned norms and provisions.

5. As a result of the provisions in the previous paragraphs, reports under Article 68 of Law No. 165 of 17 November 2005 are an important tool to improve the effectiveness and timeliness of the Supervisory Authority's actions; however, while complaint-reports concern compliance with norms on diligence, correctness, and transparency in relations with clients, whistleblowing reports concern any other legal or supervisory provision in the financial sector, excluding disputes with the reported entity of a commercial nature or concerning the employment relationship."

Article 3 – Formal Requirements

1. Article 3 of Regulation No. 2007-01 is replaced as follows:

"Article 3 – Formal Requirements of Reports

1. Reports must be in writing and drafted in Italian or English.

2. Anonymous reports will not be considered.

3. For whistleblowing reports, in order to support reporters in drafting a clear and complete report in accordance with the following article, the use of the form in Annex A of this Regulation is recommended."

4. Annex A, the "whistleblowing report model," attached to this Regulation, is added to Regulation 2007-01.

Article 4 – Substantive Requirements

1. Article 4 of Regulation No. 2007-01 is replaced as follows:

"Article 4 – Substantive Requirements of Reports

1. The mandatory minimum content of any report is:
   a) identifying data of the reporter (surname, name, identification code, residential address, telephone number, and email address); b) a clear, precise, and detailed description of the facts that gave rise to the non-compliance and/or violations (references to dates, locations, persons, operations, amounts, etc.); c) date of the report; d) signature of the reporter, also electronic if legal conditions are met.

2. In cases of complaint-reports by a consumer defense association, for the purposes of the previous paragraph, letter a), it is sufficient to state the name of the association, provided that the obligation to include, for the purposes of letter b) of the same paragraph, the details of at least one client directly affected by the alleged non-compliance is fulfilled.

3. In all cases of complaint-reports, if the reporting subject possesses documentation proving the facts reported, a copy must be attached to the report. In any case, for the report to be admissible, it must include a copy of previous correspondence with the Complaints Office, if present at the reported entity, even to prove that a remedy was previously attempted but without satisfactory results.

4. In cases of whistleblowing reports by a corporate officer or employee of the same economic operators on which the report falls, or to whose corporate officers or employees the reported facts and circumstances are attributed, the report must also contain precise information regarding the role, qualification, or office held by the reporting subject within the corporate organization at the time of the reported facts.

5. In all cases of whistleblowing reports, if the reporting subject has already reported the same facts to another authority, or intends to do so, they are required to provide precise communication within the report, as well as regarding any outcomes of such reports."

Article 5 – Submission Methods

1. Article 5 of Regulation No. 2007-01 is replaced as follows:

"Article 5 – Submission Methods of Reports

1. Complaint-reports must be submitted in writing using one of the following alternative methods:
   a) registered electronic or postal mail to the Central Bank of the Republic of San Marino - Supervision Department, Via del Voltone n. 120 – 47890 San Marino; b) hand delivery to the same address specified above, with simultaneous issuance of a receipt.

2. Whistleblowing reports must be submitted in writing using one of the following alternative methods:
   a) directly at the Supervision Department at the address specified above and by prior appointment, informing the personnel of the Department who will draw up a specific record signed by the reporter; b) hand delivery or by registered postal or electronic mail of the report signed at the bottom (see Annex A); c) sending by email to whistleblowing@bcsm.sm with the report referred to in the previous letter b) attached in electronic format."

Article 6 – Verification Activities

1. Article 6 of Regulation No. 2007-01 is replaced as follows:

"Article 6 – Verification of Reports

1. The Supervisory Authority proceeds with a preliminary examination of the facts subject to the report based on the indications provided therein and any additional documentation attached, reserving the right to request integrations and clarifications from the reporting subject in writing and/or orally.

2. Having verified the relevance of the facts for the purposes of the provisions contained in Law No. 165 of 17 November 2005 and its implementing measures, the Supervisory Authority, in cases of complaint-reports, communicates the essential contents of the report to the supervised entity, assigning a deadline to present any counter-arguments; in cases of whistleblowing reports, it initiates, where necessary, appropriate verifications to ascertain the reported facts and circumstances."

Article 7 – Effects

1. Article 7 of Regulation No. 2007-01 is replaced as follows:

"Article 7 – Effects of Reports

1. Reports, accompanied by any additional information acquired, are evaluated by the Supervisory Authority for the purposes of carrying out its institutional functions, including the adoption of measures and other initiatives within its competence.

2. In any case, the resolution or judgment of any dispute between the authors of the reports and the supervised entities, subject to complaint-reports, falls outside the tasks and powers of the Supervisory Authority."

Article 8 – Rights of the Reporter

1. In Article 8 of Regulation No. 2007-01, after paragraph 2, the following paragraphs 3 and 4 are added:

"3. In cases of whistleblowing reports, the Supervisory Authority, in compliance with Article 68, paragraph 1-ter, of Law No. 165 of 17 November 2005, guarantees:
a) a secure and specific communication channel; b) adequate protection of the reporting subject against retaliatory, discriminatory, or otherwise unfair conduct resulting from the report; c) confidentiality regarding the identity of the reporter and the alleged responsible party for all stages of the procedure, unless consented to by the reporter or when knowledge is indispensable for the defense of the reported party, without prejudice to the rules governing investigations or proceedings initiated by the judicial authority regarding the facts subject to the report.

4. In any case, all information acquired by the Supervisory Authority in the exercise of its functions is subject to official secrecy under Article 29 of Law No. 96 of 29 June 2005."

Article 9 – Final and Transitional Provisions

1. This Regulation enters into force on 4 January 2021 and shall therefore apply to reports transmitted to the Supervisory Authority from that date onwards.

2. The consolidated text of Regulation No. 2007-01, 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).

ANNEX A
WHISTLEBLOWING REPORT

IDENTIFYING DATA OF THE REPORTER
NAME
SURNAME
ISS / TAX CODE
RESIDENTIAL ADDRESS
EMAIL / TELEPHONE NUMBER for any further contacts

DATA AND INFORMATION ON THE REPORTED VIOLATIONS SUPERVISED ENTITY SUBJECT TO REPORT OPERATIONAL AREA TO WHICH THE VIOLATIONS ARE REFERABLE (e.g. Credit Area, Securities Area, Payments Area, Internal Controls, Governance Structure, etc.) DATE OR TIME PERIOD OF THE REPORTED FACTS MAIN LOCATION OF THE VIOLATIONS (e.g. Branch, Office, Body, etc.) BRIEF DESCRIPTION OF THE FACTS SUBJECT TO THE REPORT

SUPPLEMENTARY ELEMENTS FOR REPORTERS WHO ARE OFFICERS, EMPLOYEES, OR COLLABORATORS OF THE REPORTED ENTITY* ROLE, QUALIFICATION, OR OFFICE HELD AT THE TIME OF THE REPORTED FACTS TYPE OF IDENTITY DOCUMENT ATTACHED AS A COPY TO THIS REPORT (e.g. Identity Card, Passport, Driver's License)

SUPPLEMENTARY ELEMENTS IN CASE OF SUBMISSION OF THE SAME REPORT TO OTHER ENTITIES (e.g. Judicial Authority, A.I.F., police forces, auditors, statutory auditors, internal control functions, etc.)

DATE
RECIPIENT ENTITY
Possible follow-up if known

DATE
RECIPIENT ENTITY
Possible follow-up if known

DATE
RECIPIENT ENTITY
Possible follow-up if known

Date: __________________________________ Signature: ___________________________________

• In such cases (insider whistleblowing), a photocopy or scan of the reporter's identity document must be attached to this form. In all cases, any supporting documentation for the report must also be attached, if available.