On February 22, the Bank of Italy launched a public consultation on a number of proposals to modify the “Regulation on Sanctions and Administrative Sanction Procedure” defined in the regulation of December 18, 2012 (“Regulation” – see here).

The proposed amendments, implement article 32, paragraph 1-terof Legislative Decree no. 11 of 27 January 2010 (“Legislative Decree 11/2010”), as amended by Legislative Decree no. 218 of 15 December 2017, which transposed the Payment Services Directive 2 – “PSD2” (Directive 2015/2366/EU) in Italian law.

The aforementioned provision empowers the Bank of Italy, among other things, to define, by means of a general provision and “taking into account the impact of conduct on the overall business organization and risk profiles”, the criteria of relevance of the breaches committed with regard to the rights and obligations of the parties in the provision of payment services which, if proven, could lead to the application of a fine ranging from; 30,000 to 5 million euros, or up to 10% of the turnover – when this amount exceeds 5 million euros and the turnover is available and determinable.

This consultation is open for comments until March 24 and all interested stakeholders are invited to participate by sending their comments:

• if you have a certified electronic mail (PEC), in electronic form at the address [email protected]; Where
• in paper form, at the Servizio Rapporti Istituzionali di Vigilanza, Divisione Analisi delle Irregolarità, via Nazionale 187, 00184, Rome. In this case, an electronic copy must be sent at the same time to the e-mail address [email protected].

Due to the significant changes to the consultation process, we recommend that all intermediaries thoroughly review this document to submit any comments and/or assess the need to change or refine their organizational structure. in the field of transparency rules. .

The new regulations in brief

Insofar as they are interested, the amendments submitted for consultation aim to:

1. extending to breaches of the rights and obligations of the parties, the criteria of relevance currently provided for by the same regulation with regard to breaches relating to the transparency of contractual conditions and the fairness of relations with customers (referred to in Article 144( 8) Legislative Decree no. 385 of September 1, 1993, the “Italian Banking Law”);
2. define specific materiality criteria for breaches of obligations regarding “Strong Customer Authentication” (SCA), as referred to in Article 10-bis of Legislative Decree 11/2010, and common and secure open communication standards .

With particular regard to the action under (i) concerning the rights and obligations of the parties, the solution proposed by the Autorité provides that the regulatory power in terms of sanctions for breaches of the rules of transparency and the rights and obligations of the parties can be exercised taking into account the criteria of materiality listed in Appendix B of the “regulations” currently being consulted.

In particular, pursuant to the provisions of the aforementioned Appendix B, the relevance of the breaches, for the purposes of the initiation of the sanction procedure, can be deduced:

a) their ability to create significant legal or reputational risks;

b) their generalized or systematic nature in relation to the geographical distribution or to the operations of the intermediary or the payment service provider;

c) non-compliance with warnings or instructions from the Supervisory Authority;

d) the inadequacy of the organizational and control measures adopted by the intermediary to ensure compliance with the regulations relating to the transparency of transactions and banking and financial services and the regularity of the customer relationship, as well as the rights and obligations of the parties in the provision of payment services.

With respect to Strong Customer Authentication (SCA) and security measures, as defined in Article 10-bis of Legislative Decree no. 11/20110, as well as common and secure open communication standards, some of the materiality criteria mentioned in point I) above are partly extended to related offences, and an additional criterion is introduced under which the significance of the offenses can be inferred “the ability of the behavior to affect market efficiency, competitive equality or the security of the payment system” (see Annex C of the “Rules” in consultation).

In our opinion, an additional and important intervention aims to clarify the fact that, with specific regard to the provision of payment services, the power of execution of the Bank of Italy can also be exercised with regard to providers of EU payment services operating under the regime of freedom of establishment in Italy, that is; – subject to any further clarification that may be provided during this consultation – as payment service providers operating in Italy through branches and agents, the engagement of an agent being considered as an institution of the nominating entity.

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