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Bank of Italy – temporary measures for banks and regulated intermediaries in relation to the COVID-19 emergency

25/03/2020

With note dated 20 March u.s. the Bank of Italy has issued certain measures aimed at facilitating the conduct of the activities of banks and supervised intermediaries, which has been severely tested by the ongoing health emergency during this period.

In this regard, the Supervisory Authority, in line with the initiatives taken by the European Banking Authority (EBA) and the European Central Bank (ECB), has granted certain delays with reference to the terms relating to regulatory supervisory obligations. In particular, these extensions concern:

  • 60 days for the obligations concerning:

i.      ICAAP/ILAAP for banks and securities investment firms (SIMs), and ICAAP for non-bank financial intermediaries pursuant to Article 106 of the Consolidated Law on Banking (hereinafter, “Financial Intermediaries”);

ii.     recovery plans, reports on outsourcing for banks and Financial Intermediaries;

iii.     reports on organizational structures for SIMs, SGRs, SICAFs, SICAVs, PIs and EMIs (where required for significant organizational changes);

iv.    depositories self-assessment of compliance with authorization requirements;

v.     anti-money laundering annual report (which includes the risk self- assessment for 2019);

vi.    customer due diligence for anti- money laundering purposes and, in particular, recovery of customer data already obtained;

vii.   report on compliance with the obligations regarding deposits and sub- deposits by customers and the requirements provided by the transitional measures for the Regulation of 5 December 2019 implementing the Consolidated Law in Financial Finance by intermediaries that provide investment services;

Periodic reports of the 2nd level control functions (i.e. control of compliance with regulations, risk management) and 3rd level (internal auditing) are also included in the aforementioned supervisory obligations, the contents of which, according to best practice, also include the transmission in conjunction with the meetings of the administrative body called to resolve on the draft financial statements.

  • 150 days for submission of the first Report on Operational Risks and Safety for banks; 
  • 60 days for responses on consultations in progress on regulatory changes and an extension of the deadline for submitting comments for consultations that will start in the coming days.
  • The deadline for sending the update of the plans for the reduction of impaired loans by the less significant banks required to send them has been postponed to 30 June

The Bank of Italy also specified that, where the documentation concerns its own administrative procedures, the new terms include the suspension period referred to in article 103 of the Decree Law 18/2020 pursuant to which, it is recalled, "For the purposes of calculating the authorizing or peremptory, preliminary, final, executive and executive terms, relating to the conduct of administrative procedures at the request of a party or office, pending on 23 February 2020 or started after that date, the period between the same date and that of April 15, 2020 is not taken into account. The terms of formation of the exclusive will of the administration in the forms of significant silence provided for by the law are extended or deferred for the corresponding time. 2. All certificates, certificates, permits, concessions, authorizations and authorizations, however denominated, expiring between January 31 and April 15, 2020, remain valid until June 15, 2020”.

The Supervisory Authority also specified that certain evaluations are ongoing - on which new indications will be provided - on (i) the reprogramming of the on-site inspection calendars, without thereby diminishing the attention to the solidity of the banks and others supervised intermediaries and (ii) the introduction of flexibility margins relating to the terms for sending the supervisory reports and the Central Credit Register, also in coordination with the European Supervisory Authorities.

Lastly, the Bank of Italy took the opportunity to raise the awareness of the recipient intermediaries on the need to consider and deal with the risk of a pandemic in the relative emergency plans, inviting in particular the less significant banks and the other supervised intermediaries to review the business continuity plans and to consider what actions can be taken to minimize the potential effects of COVID-19 diffusion.

Authors

Andrea Arcangeli
Andrea Arcangeli
Of Counsel
Rome
Alfredo Gravagnuolo
Alfredo Gravagnuolo
Senior Associate
Rome