This content is from: Local Insights

Italy

As provided in Article 11 of the 2002 Finance Law, the Italian Ministry of the Economy and Finance has issued Decree No 217 (August 2 2002, coming into force on October 16 2002), introducing amendments to legislative decree No 153 of May 17 1999 on the subject of Italy's banking foundations.

In compliance with the guidelines set out in the 2002 Finance Law, Article 2 of Decree No 217 states that banking foundations must choose their own "main sectors" of activity, and these must not exceed three. These permitted activities listed in Article 11 are divided into four main groups of activities including, but not limited to:

  • the family and related values;
  • crime prevention and law enforcement;
  • scientific and technological research, and
  • art, cultural activities and heritage.

It is also provided that the foundations, mainly in connection with the area they serve, must carry out their activities exclusively in the permitted sectors and operate principally in the main sectors assuring, individually and as a whole, the balanced distribution of resources and giving priority to the sectors of greatest social importance.

Another substantial change to the previous regulation concerns the composition of foundations administrative bodies. Banking foundations must give the majority of the seats on their board (organo di indirizzo) to representatives of local authorities to be appointed by the regions, provinces, municipalities and metropolitan cities (if any) within the relevant territory. The remaining seats will be taken by personalities of great renown with specific experience in the sectors of the foundation's activities to be designated by reputable, independent entities operating in such sectors.

Finally, Decree No 217 has set out the rules relating to the controlling stake held by the banks in any bank corporate companies, stating that this stake must be divested before June 15 2003 or in cases of indirect control, that such controlled companies can appoint an asset management company authorized under legislative decree No 58 of February 24 1998 (a società di gestione del risparmio, or SGR) to be selected pursuant to the applicable tender procedures, and also through an irrevocable mandate, for the management of the stake under the SGR's own name and on behalf of the relevant controlled company. The election for the appointment of an SGR must be resolved by the banking foundation before March 15 2003 and for the purposes of the finalization of the transaction before June 15 2003. However, in the case of such election, the controlling stake must be divested before June 15 2006.

The amendments to the statutes necessary to reflect a banking foundation's compliance with the provisions of Decree No 217 must be finalized within 90 days from when the decree came into force, and the banks can proceed with the designation of the statutory bodies within 15 days following the approval of the amended statutes by the Ministry of the Economy and Finance (acting as regulator in respect of the banks). The foundations must limit their activities to ordinary business until the coming into force of the newly elected administrative bodies.

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