According to the supervisory regulations on banks issued by
the Bank of Italy in 1999, as amended, and the resolution of
the Inter-Ministerial Committee for Credit and Savings dated
July 19 2005 (the CICR Resolution), a collection of savings may
be made by financial intermediaries registered under Article
106 of the Italian Banking Act only through the issue of
financial instruments, and subject to certain limits.
According to these provisions, financial intermediaries are
allowed to issue financial instruments (such as notes) for an
amount not exceeding the value of their assets, represented by
the capital, legal reserve and available reserves according to
the latest approved balance sheet.
In addition, the Supervisory Regulations provide that an
issue of financial instruments does not represent a collection
of public savings if, inter alia, it is destined to
subscription by institutional investors subject to supervisory
control in compliance with the applicable laws.
The limit for the issue of financial instruments by
financial intermediaries under the Supervisory Regulations
makes reference to a generic "collection of savings through
financial instruments" without any express limitation on the
public savings made by retail investors.
The issue is relevant, since infringement of the above
provisions also falls under Italian criminal laws.
The Bank of Italy, upon a specific query, has recently
intervened on the issue providing its interpretation of the
According to the Bank of Italy the issue by financial
intermediaries of financial instruments destined exclusively to
institutional investors does not fall within the limits set by
the Supervisory Regulations and CICR Resolution (that is, issue
of financial instruments for an amount not exceeding the assets
of the issuer) since the issue is not considered a "collection
of public savings", to which the restriction applies.
The Bank of Italy stated that the relevant terms and
conditions of an issue of financial instruments for an amount
exceeding the limit of the assets of the financial intermediary
shall have to expressly provide that those financial
instruments (i) are to be placed and held until maturity
exclusively by institutional investors and (ii) cannot be
subsequently distributed to investors other than institutional
investors until their maturity.
The Bank of Italy also confirmed that the provisions of
Article 2412 paragraph 2 of the Italian Civil Code do not apply
to issues of notes by financial intermediaries over the limits
indicated above, since those notes cannot be distributed to
retail investors until maturity.