Financial intermediaries under Article 106 of the TUB

Business scope

Registered financial intermediaries under Article 106 of the Italian Consolidated Law on Banking (TUB) are entities, other than banks, providing the following professional services to the public:

• lending in any form: please refer to Italian Ministerial Decree 53/2015 for details on the business scope and the circumstances in which these services are deemed to be offered to the public;
• servicing in loan securitization transactions pursuant to Italian Law 130/1999.

Financial intermediaries can also:

• issue electronic money and offer payment services, provided they are duly authorized and registered;
• offer payment services only, provided they are duly authorized and registered;
• offer investment services, in compliance with the requirements set by the Bank of Italy pursuant to the Italian Consolidated Law on Finance (TUF);
• offer other services laid down by law, though only as ancillary services to their lending business, e.g.:
  • offering and entering into loan and payment services agreements;
  • granting preferential loans and managing public funds;
  • insurance and reinsurance brokerage, provided they are registered as insurance brokers.

The regulation of financial intermediaries is not harmonized at European level; therefore, mutual recognition is not allowed at EU level, with the exception of entities controlled by EU banks.

Requirements

Applicants to be licensed as financial intermediaries must meet the following requirements:

a) legal form of a joint-stock company (società per azioni), a limited joint-stock partnership (società in accomandita per azioni), a limited liability company (società a responsabilità limitata), or a cooperative company;

b) registered office and headquarters in Italy;

c) initial share capital of at least:

• €2 million for intermediaries not issuing guarantees;
• €1.2 million for intermediaries in the form of a largely mutual cooperative company and not issuing guarantees;
• €3 million for financial intermediaries issuing guarantees, whether or not on an exclusive basis;

d) regulatory requirements for qualified shareholders;

e) regulatory fit-and-proper requirements for members of the management body;

f) no close links between a financial intermediary, or any entities within its group, and other entities that could stand in the way of effective supervision;

g) business scope limited to financial intermediation.

In addition, applicants are required to submit specific documents in compliance with Bank of Italy Circular 288/2015, including, among others, their memorandum and articles of association, a business plan with an analysis of the financial viability of start-up operations, and a report on their organizational structure.

The Bank of Italy shall reject applications where, based on the requirements assessment, the applicant cannot ensure sound and prudent management.

Post-licensing requirements

Newly-licensed intermediaries are required to send the Bank of Italy a certificate showing the date of business registration (for newly-incorporated entities) or of the amendments to their articles of association (for existing entities).  As of that date, licensed intermediaries will be registered pursuant to Article 106 of the TUB and notified of their identification number.

Once registered, financial intermediaries are required to:

• join an Alternative Dispute Resolution (ADR) system, pursuant to Article 128-bis of the TUB;
• notify the Bank of Italy of the start date of their operations within 12 months of registration;
• notify the Bank of Italy of any changes to the information contained in the register, within 10 days of filing for registration of those changes in the business register.

Intermediaries are supervised by the Bank of Italy in accordance with the organizational criteria published on our website and are subject to the supervisory powers set forth in statutory provisions.