ITALY: CONSOB Issues Consultation on Modifications to Broker Regulations

Tuesday August 1 2017

On 28 July 2017 CONSOB began the consultation with the financial market on the proposed modifications to Book VIII of brokers regulations for the purpose of implementing article 1, paragraph 36, of Law no. 208 of December 28 2015 (Stability law for 2016), that provided for the confluence of supervisory and sanctioning powers in the Supervisory Body and the keeping of a single register of financial consultants (Ocf).

The regulatory proposals implement, at a secondary level, the mentioned reform dictating the principles and criteria to which the work of the Body must adhere.

The main modifications made to Book VIII concern:

• the new supervisory competences of the Ocf;
• the provision of general Ocf organisational requisites with special reference to the management of conflicts of interest;
• the regulations regarding registration in the registry and the activity of freelance financial consultants and consultancy companies.

With special reference to the three categories of financial consultants mentioned above, book VIII contains:

• a core of common regulations, included in parts I (“Preliminary previsions”), II (“Body”), III (“Regulation of the Registry”) and V (“Sanctioning and cautionary measures”);
• distinct and specific regulations that on the one hand, the activity carried on by financial consultants qualified to make out of office (Part IV) and, on the other, the activity carried on by freelance financial consultants and consultancy firms (Part IV-bis).

Furthermore, the regulations subject to consultation, in the laying down of a specific code for freelance consultants and consultancy firms – in conformance with art. 3, paragraph 2, of the Mifid II Dirctiv (Markets in Financial Instruments Directive) – the provisions of the same directive have largely been replicated, as well as those of the delegated regulation (EU)2017/565,regarding organisational requisites and conditions of exercising the activity of investment undertakings. This choice was made in consideration of the considerable analogy between the consultancy service provided by parties on the register and the investment services provided by parties qualified for the purposes of enforcing the recommended investment choices.

The consultation closes on 30^th September 2017.

Please click on the link above for further information