| Country Manuals Products – We would like to inform you that BRP has updated its COUNTRY MANUAL PRODUCTS for the following jurisdiction: ITALY (OUT OF A THIRD COUNTRY) |
| SOURCE OF CHANGES | ANSWERS |
| Law/Regulation | YES |
| New Position of the Authorities | YES |
| Evolution of Expert’s interpretation | YES |
Definitions & Concepts, Regulatory Overview and Behaviour Template
Regulatory changes
On 3 February 2022, the Commissione Nazionale per le Società e la Borsa (“CONSOB”) revoked the Communications no. 9019104 of 2 March 2009 concerning “The duty of the intermediary fair and transparent behaviour in the distribution of illiquid financial products” and no. 0097996 of 22 December 2014 concerning the “Communication on the distribution of complex financial products to retail customers” (see BRP Alert Italy 1/2022). CONSOB believes that with the current evolution of the European legal framework on the provision of investment services and the consequent strengthening of investor protection measures, the recommendations provided in the aforementioned Communications have been directly or indirectly absorbed by the broader and more complex rules of MiFID II/MiFIR. Having said that, in order to facilitate the consistent application of the European laws and regulations and to ensure coordination between the relevant laws and regulations of European source and the previous interpretations made by CONSOB, the Communications were consequently revoked.
Material changes
In line with the regulatory changes outlined above, the Country Manual has been reviewed to ensure that the content of all the documents remains accurate and up to date. The changes/modifications are as follows:
> Due to the revocation of CONSOB’s communications, CONSOB’s guidance does no longer apply with respect to certain financial products which were not considered apporiate for Retail Investors and therefore should not be distributed/offered/marketed to the latter. Therefore, the Regulatory Overview no longer contains any provisions on “complex financial products” and the Behaviour Template provides the answers “YES” (instead of the previous “Grey zone”) in the relevant “advisory” and “execution-only” scenarios.
> In alignment with the Country Manual Private Banking, the provision of investment advice as well as any marketing activities are either not permitted or not recommended onshore in Italy (at target). The Behaviour Template hence now provides the answers “NO” (for spot advice) and “Grey zone/NO” (for ongoing advice and specific reverse solicitation) for the relevant onshore scenarios.
> Due to licensing requirements, the active provision of investment advice without/outside of the scope of a written advisory agreement (spot advice) is no longer permitted on a cross-border basis into Italy (remote). Accordingly, the Behaviour Template now provides the answer “NO” for the relevant cross-border scenarios.
> The provision of investment advice generally triggers the “local distribution rules” in Italy. However, it could be argued that the provision of investment advice on a cross-border basis into Italy (remote) based on a written advisory agreement (ongoing advice), does – under very limited circumstances – not trigger the “local distribution rules” (see the Regulatory Overview for further information). Please note that foreign (unlicensed) service providers should carefully assess their position with respect to the above in view of their own internal risk evaluation policies. Accordingly, the Behaviour Template now provides the answer “Grey zone/YES (for registered products/not registered products where a “private placement exemption” is available) and “Grey zone” (for not registered products where no “private placement exemption” is available).
> Finally, the provision of execution only-services is no longer recommended in Italy (at target) due to licensing requirements. Accordingly, the Behaviour Template answers this scenario with “Grey zone/NO”.
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For more information, please contact us: info@brpsa.com
Best regards,