This issue of the Legal Research Journal consists of two papers on the payment system oversight function performed by the Bank of Italy: the first deals with the legal framework in the light of the amendments introduced by Legislative Decree 11/2010 while the second examines the provisions issued by the Bank of Italy on 18 September 2012 on the oversight of retail payment systems.
The first paper, by Nicola De Giorgi, examines the Bank of Italy’s oversight function pursuant to Article 146 of the Consolidated Law on Banking, in the light of the similar function assigned to the European System of Central Banks by Article 127 of the Treaty on the Functioning of the European Union. It also analyses the amendments made to Article 146 of the Consolidated Law on Banking by Legislative Decree 11/2010 transcribing the 2007 Payment Services Directive, particularly in relation to the objective of oversight and the scope of its application. As to the objective, the new provision makes explicit reference to the “protection of users of payment services”, in line with the legislative trend towards taking greater care of client/user protection. As to the scope of application, overseen entities are classified in categories, contrary to the previous provision.
Attention is also paid to the extension of the powers conferred to the Bank of Italy to carry on the oversight function. According to the new Article 146, in addition to regulatory powers the Bank of Italy is entrusted with the power of collecting data, making onsite inspections and issuing administrative acts.
The essay also describes the provisions, other than those of the Italian Banking Law, that establish the whole oversight legislative framework at a national level.
Specific issues are examined: in particular it is suggested that the new objective of the “protection of users of payment services” makes it doubtful whether the oversight function in its entirety can still be considered a central banking function; moreover, the new objective may result in the Bank of Italy’s oversight function not being exactly the same as that assigned to the European System of Central Banks by Article 127 of the Treaty on the Functioning of the European Union.
The paper by Maria Iride Vangelisti offers a thorough analysis of the regulation issued by the Bank of Italy on 18 September 2012, concerning the oversight of retail payment systems and abrogating the regulation of the Governor of the Bank of Italy of 11 November 2005 (oversight of low-value payment systems). The regulation was issued after the approval of the new Article 146 of the Consolidated Law on Banking and takes account of the new framework of the Bank of Italy’s oversight powers.
The paper examines the main innovations of the new regulation regarding notification requirements: payment service providers (whose registered office and/or centre of operation is in Italy) must inform the Bank of Italy in writing of the name of any foreign payment system they intend to utilize, specifying its oversight regime. This provision stems directly from the new powers assigned to the Bank of Italy by the new Article 146 of the Consolidated Law on Banking: protecting Italian payment service users even if the clearing and settlement process of the payment transactions is managed by a system that is not directly overseen by the Bank of Italy.
The work also analyses the specific provision regarding retail payment system managers, e.g. risk controls, access, functioning rules, service features, organization. The issue of interdependencies and links between payment systems is also evaluated as a topic of major importance in the integration of the European payment market. In the same vein the provision on outsourcing is evaluated with emphasis on the main issues: the reason for the decision, the clarity of the rights, obligations and responsibilities, and mitigation of the impact in the event of insolvency. Business risk is another major topic covered by the paper, specifically important in a context in which competition among service providers is increasing due to the standardization fostered by European integration in the payment market.
With regard to the operators that offer clearing and settlement services, the paper analyses the increasing liberalization that has occurred in the market since 2005. Public and private operators compete in the present legal environment in the supply of services involving all the different phases of the clearing and settlement process. As a consequence, they are subject to the same oversight requirements laid down in the regulation discussed here, with a few exceptions due to the not-for-profit nature of the service offered by the central bank.
