On 10 July 2023, Consob published for public consultation a draft regulation implementing the FinTech Decree with specific regard to (i) the enrolment in and removal from the register for digital circulation and (ii) minimum content for the document containing information on operating procedures of the register and measures to safeguard its operation (“Regulation”). This set of rules is just part of the regulatory measures to be issued for the purposes of the implementation of the FinTech Decree.
Pursuant to the Regulation, the application for the enrolment in the register must contain all the information needed to demonstrate compliance with the requirements laid down in the FinTech Decree, including all the documents and information described under Annex 1 of the proposed Regulation, based on the type of entity applying as digital register manager (e.g. evidence of authorization in case of regulated entities or copy of the corporate documents in case of other entities).
The application must also be supported by an explanatory report, as detailed under Annex 2 of the proposed Regulation, which must include for example:
- A description of the technical/implementation features of the technological infrastructure;
- A detailed description of the risks that could potentially compromise the proper functioning of the infrastructure, including cyber risks and the measures adopted to mitigate the risks;
- An assessment regarding the compliance of the register and of the further measures adopted with the requirements of the FinTech Decree;
- Any other additional information, such as the indication of the categories of financial instruments that can be entered in the register and of any third parties the register manager intends to use as well as a description of the activities carried out by them.
Consob must verify the regularity and completeness of the application within 20 working days of receipt and can ask for missing documentation to be transmitted within 30 business days from the applicant under penalty of non-acceptance of the application.
As regards the removal from the register, the manager of the register must submit a dedicated removal request to Consob and the latter will resolve on the request within a maximum period of 90 days, by adopting an express decision.
Finally, for transparency requirements, the manager of the register must make available to the public, in an electronic form, accessible and searchable at any time, a document containing information relating to the criteria of functioning of the register, including the information provided for in Annex 3 of the proposed Regulation, such as the categories of financial instruments that can be entered in the register, the offered services and the functioning of the register.
Next steps
With the proposed Regulation, Consob intends to implement only the mandatory and optional regulatory provisions considered strictly functional for the immediate launch of the digital managers’ register.
In a second phase, after discussion with the other supervisory authorities involved and the market, Consob will assess how to exercise further regulatory powers.
The public consultation, available here in Italian only, will be opened up to 9 August 2023.
Authored by Jeffrey Greenbaum, Claudia Colomba, Rebecca Carbone.
