Through its Resolution no 21755 of March 10, 2021, CONSOB have simplified some of the requirements of knowledge and competence for the staff of the financial intermediaries (including Italian SIM’s or SGR’s, Italian branches of foreign investment firms or ManCo’s, AIFM’s, hereinafter, the “Intermediaries”) who render investment advice or give information about financial instruments, investment services or ancillary services to clients (jointly referred to as “Front Office Members”). CONSOB have also eliminated, inter alia, the specific requirements on how to administer the training to the Front Office Members and the tests, replaced by internal procedures of the Intermediary, and the obligation of thirty hours per year of continuing professional education for the Front Office Members.
II The CONSOB Resolution no 21755 of March 10, 2021 (the “Resolution”)
The professional education requirements for Front Office Members were first determined by CONSOB in its Regulation no 20307 of 2018 on Intermediaries(hereinafter, the “RI”), which transposed the second-level provisions of MiFID II. These requirements were described in our Newsletter no 2018-04. The Resolution has now amended and or deleted the articles of RI on the professional education, i.e., articles 78 to 82, by only leaving a re-drafted article 78.
In terms of duration of the professional experience, the requirements for the Front Office Members giving information on products or services remain about the same, or have been slightly reduced (but please see below), while the duration of the professional experience required for the Front Office Members rendering investment advice has been materially reduced. In case of collaborators without a university degree, the duration of the professional experience has been reduced by 50% for both the classes of Front Office Members.
The Resolution has also eliminated the detailed provisions of the RI on the formalities and procedures for administering the training of the Front Office Members (e.g., organization of the tests, minimum and maximum duration of the training every day, etc.), and replaced them with the principle that the training is organized according to internal procedures of the Intermediary, provided that these comply with the general principles set out in ESMA Guidelines 205/1886 in terms of consistency of the training with the characteristics of the clients and of the products/services which are offered. The Resolution also provides that the definition and the ongoing revision of the training programs for the Front Office Members can be outsourced to third parties and that the documentation on the administration of the training programs has to be kept by the Intermediary for at least five years.
Finally, to the extent the Resolution has deleted article 81 of the RI, the attendance by the Front Office Members to thirty hours of continuing professional education every year is no longer required.
III Entering into force
The Resolution enters into force on March 31, 2021.
The simplified requirements in terms of education and professional experience provided by the Resolution only apply to the Front Office Members who are starting their position with an Intermediary from March 31, 2021.
The notice in English on the Resolution is on: https://www.consob.it/web/consob-and-its-activities/news-in-detail/-/asset_publisher/kcxlUuOyjO9x/content/press-release-8-3-20-2/718268
We remain at disposal for any clarification
STUDIO LEGALE CROCENZI E ASSOCIATI
Francesco P Crocenzi
1 IMPORTANT INFORMATION This memorandum is not given in performance of a professional engagement during an attorney-client relationship and is only given for a general information to the reader regarding the matters discussed herein. Therefore, this document should not be relied upon as a legal opinion and no action should be taken on the basis of the information herein contained. © 2021 Francesco Paolo Crocenzi