What is the supervisory regime for trust companies registered in the separate section of the register established pursuant to Article 106 of the TUB?
The Bank of Italy shall supervise registered trust companies in accordance with the TUB, in order to ensure compliance with the provisions of Legislative Decree 231/2007. The current regulatory framework does not include any prudential capital requirements for trust companies to offset risks. However, their operations remain under the supervision of the Ministry of Enterprises and Made in Italy.
The Bank carries out analysis and takes measures to promptly identify any signs of potential anomalies in trustees’ technical/organizational structures and urges them to take appropriate corrective measures. It performs both documentary checks – based on the collection, processing and systematic analysis of a set of statistical, accounting and administrative information – and on-site inspections to confirm the quality and accuracy of the data provided by trustees and to have a better understanding of their organization and management. On-site inspections are tailored to reflect the profile, size and complexity of each supervised entity and focus on material risks, corporate governance and internal audit.
The Bank of Italy and the Ministry of Enterprises and Made in Italy inform each other of any measures taken in their respective areas of responsibility.
What is the deadline for submitting licensing applications for the purpose of registering in the separate section of the register established pursuant to Article 106 of the TUB?
Licensing applications must be submitted to the Bank of Italy within 60 days of compliance with the requirements laid down by law.
Is there an application form?
There is no standard form. However, Bank of Italy Circular 288/2015 lists the documents to be attached to the application and includes templates for the report on operations and the organizational structure report.
What documents should be attached to the application?
The information and documents to be submitted with licensing applications are listed in Bank of Italy Circular 288/2015. As a rule, the following documents are required:
- memorandum and articles of association;
- a copy of the licence issued by the Ministry of Enterprises and Made in Italy;
- report on operations and organizational structure report;
- list of direct and indirect qualified shareholders, with the values of their holdings. For indirect qualified shareholder, the entity through which the interest is held must be specified;
- evidence that the direct and indirect qualified shareholders meet all requirements;
- group chart;
- fit and proper certificates for members of the management body.
Depending on their specific profile, applicants may be required to produce additional documents for preliminary assessment.
The documents referred to in points e) and g) must be no older than 6 months prior to the date of the licensing application.
What should the corporate purpose clause read in the articles of association?
The corporate purpose clause shall list the applicant’s business operations, pursuant to Law 1966/1939 and the Ministerial Decree of 16 January 1995, with no mention of any financial services that it does not offer or intend to offer within the time horizon covered by the business plan.
How does the Bank of Italy assess the ownership structure of a trust company?
In order to ensure compliance with anti-money laundering and terrorist financing regulations, the Bank of Italy shall assess the quality of the holders of qualifying holdings, taking into account the candidate’s likely degree of influence over the trust company.
This assessment is carried out based on the criteria set by the Bank of Italy Measure of 26 July 2022, namely:
- the holder’s good repute, including in terms of the requirements laid down in Article 25 of the TUB, integrity and professional expertise;
- the ethics and professionalism of those who will perform administrative and management functions in the trust company;
- the ability of the intermediary to comply with anti-money laundering provisions;
- no grounds to suspect that the holding’s acquisition is or may be associated with money laundering or terrorist financing, or that it could increase the risk thereof.
The assessment will not result in a separate decision on qualifying holdings or follow the procedures laid down in the relevant legislation, but will feed into the preliminary assessment for licensing.
Participants are required to submit the documents listed in the Bank of Italy Measure of 26 October 2021 to prove compliance with the above requirements.
How does the Bank of Italy assess corporate governance and members of the management body?
The Bank of Italy will assess the intermediary’s governance structure for risk management capabilities, consistency with the prospective business scope and size, and transparency in the allocation of tasks among corporate boards and in investor relations.
In addition, the Bank of Italy will conduct fit and proper (F&P) assessments of corporate officers in administrative, management and auditing functions, which is key to ensure sound and prudent management.
F&P assessment rules are laid down in Article 26 of the TUB and in Ministerial Decree 169/2020.
Financial intermediaries are responsible for identifying fit and proper corporate officers and for ensuring that the appointees meet F&P requirements and criteria throughout their term of office.
What should be included in the report on operations?
The content of the report on operations is covered by Bank of Italy Circular 288/2015. The document should include:
- the services that the trust company intends to offer pursuant to Law 1966/1939 and to the Ministerial Decree of 16 January 1995;
- three-year forecasts for the performance of fiduciary assets;
- the financial statements for the last three financial years, or any available financial statements for younger companies;
- the performance of fiduciary assets in the previous three years, or since licensing by the Ministry of Enterprises and Made in Italy for younger companies.
Can the Bank of Italy run specific checks on applicants as part of the licensing process?
The Bank of Italy may order an assessment to confirm the overall viability of an applicant’s corporate structure and the amount of its capital. For this purpose, it may use its own inspectors or request a third-party appraisal. Depending on the applicant’s line of business, the Bank may highlight additional points to be assessed and recorded in the assessment report.
What does the Bank of Italy check for the purposes of licensing?
Licensing is subject to compliance with the requirements laid down in Article 199 of the Italian Consolidated Law on Finance (TUF) and with corporate governance and organizational requirements pursuant to anti-money laundering and terrorist financing regulation (Legislative Decree 231/2007). For the purposes of the above assessments, the Bank of Italy also uses updated information from the Ministry of Enterprises and Made in Italy.
Can a trust company be the parent company of a financial group?
The parent company of a financial group may be a financial intermediary or a financial company that directly or indirectly controls the other group companies. A financial group consists of one or more financial intermediaries, non-EU banks, financial companies and ancillary subsidiaries, and is subject to consolidated supervision.
A trust company cannot act as a parent company.
Can the Bank of Italy reject a licence application from a trust company for the purposes of registration in the separate section of the register of financial intermediaries pursuant to Article 106 of the TUB?
Yes, the Bank of Italy shall reject applications where, based on the requirements assessment, the applicant cannot ensure effective risk management in terms of anti-money laundering and terrorist financing pursuant to Legislative Decree 231/2007.
Rejected applicants are required to make any necessary changes to meet licensing requirements.
The Ministry of Enterprises and Made in Italy shall be informed of any licence denials.
When does the Bank of Italy remove a trust company from the separate section of the register pursuant to Article 106 of the TUB?
The Bank of Italy shall deregister a trust company if its licence from the Ministry of Enterprises and Made in Italy or from the Bank of Italy itself is withdrawn, as well as when the licence has officially lapsed.
Likewise, trust companies will be deregistered in the event of voluntary dissolution or change of corporate purpose. In such cases, the application for removal shall be sent to the Bank of Italy by the company or its liquidators within 10 days of the corresponding decisions being entered into the business register.
Under what conditions does a licence lapse?
A licence will lapse if the trust company:
- expressly renounces it within 12 months of its issue;
- has not started operations within 12 months of licensing.
A limited extension period, normally not exceeding 6 months, may be granted for cause at the request of the intermediary, to be submitted at least 60 days before the 12-month time limit expires.
Upon revocation, the Bank of Italy removes the intermediary from the relevant register.
A lapsed licence means the trust company is no longer required to register in the separate section of the register pursuant to Article 106 of the TUB.
Under what conditions is a licence withdrawn?
Without prejudice to the cases of licence withdrawal permitted by law, the Bank of Italy shall withdraw the licence from, and deregister, a trust company if it finds that it has not engaged in business for more than 18 consecutive months.
A withdrawn licence means the trust company is no longer required to register in the separate section of the register pursuant to Article 106 of the TUB.
