On 2 July 2021, the Decree of the Italian Ministry of Economy and Finance No. 100 of 30 April 2021 setting out the criteria to test FinTech initiatives in a sandbox environment (the "Sandbox") and the establishment of a FinTech Committee (the "Committee") (the “Decree”) was published in the Italian Official Gazette. The Decree implements the provisions set out under Article 36(2-bis) and (2-octies) of Law Decree No. 34/2019, as converted into Law No. 58/2019, as further amended.
The FinTech Sandbox
• Scope of the Sandbox and admissibility criteria: access to the Sandbox may be requested for a technologically innovative activity (whether regulated or not) affecting the banking, financial or insurance sectors. Such activity must meet specific requirements such as, among other things, having significantly innovative features or contributing to the offering of innovative banking, financial or insurance products and services through the use of new technologies, as well as implying a derogation from one or more provisions or guidelines issued by the supervisory authorities and bring added value at least in terms of benefits for users, contribution to the efficiency of the banking/financial/insurance system, lower compliance costs or enhanced internal systems of market players with regard to risk management.
• Requirements for entities applying for the Sandbox and dialogue with supervisory authorities: entities intending to apply for the Sandbox must meet specific requirements set out under the Decree. Before filing the application for the admission to the Sandbox, relevant entities may consult informally with the relevant supervisory authorities in order to obtain support through the dedicated channels to be established by the FinTech Committee and supervisory authorities on their websites.
• Application dossier and procedure: the relevant supervisory authorities may establish timeframes of a maximum 2-month period for filing applications which may also be related to specific innovative projects. The Decree sets out the content of the application which, among other things, must include (i) a detailed description of the project, including its goals, its duration, the expected added value and the reasons why a testing period is requested; (ii) a proof of concept including an evaluation of the financial sustainability of the project; (iii) an assessment of potential risks and a description of appropriate remedial actions and (iv) user safeguarding measures.
• Duration: each eligible project has a maximum duration of 18 months, but this may be extended in specific circumstances.
• Monitoring activity and register of the entities admitted to the Sandbox: the relevant supervisory authorities shall carry out an on-going monitoring of the testing and report to the FinTech Committee at least on a half-yearly basis. The FinTech Committee is to establish a register of the entities admitted to the Sandbox.
The FinTech Committee
• Tasks of the Committee: the FinTech Committee (chaired by the Italian Minister of Economy and Finance and participated by the main Italian regulators) is in charge, among other things, of
(i) monitoring the evolution of FinTech at national, European and international level, in order to identify goals, define programmes and implement actions to foster the development of FinTech in Italy, also by promoting and supporting the reduction of administrative burdens and by developing guidelines and best practices;
(ii) facilitating contacts between market operators, institutions and supervisory authorities, as well as promoting and coordinating collaboration and information exchange activities with the competent foreign institutions, including European authorities.
• Committee meetings: the Committee shall meet upon request of any of its members and in any event at least every three months. The Committee may also invite FinTech experts of other administrations or authorities, trade associations and FinTech players to participate in its meetings.
The Decree will enter into force on 17 July 2021.
Authored by Jeffrey Greenbaum, Claudia Colomba, and Elisabetta Zeppieri