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I         General

Italy completed an additional step in the implementation process of the Directive (EU) 2019/1160 of the European Parliament and the Council of 20 June 2019 (known as “Cross Border of Distribution of Funds Directive” or “CBDF”) – amending Directives 2009/65/EC (the “UCITS Directive) and 2011/61/EU (the “AIFMD”) on the simplification of the cross-border distribution of collective investment schemes, including UCITS and AIFs.

For the preceding steps in the Italian implementation, please refer to our Newsletter 2021 06.

In particular, the Legislative Decree no. 191 of November 5, 2021 (or Decreto Legislativo 5 novembre 2021, n. 191 – “LD 191”) was published on the Official Gazette on November 30, 2021, and therefore will enter into force on December 15, 2021; by means of the LD 191, the Government amended the main piece of Italian financial law, i.e., the Consolidated Finance Act or “Testo Unico della Finanza” – Legislative Decree no. 58 of 1998, as amended (“TUF”), and mandated CONSOB to issue the relevant second-level rules within 120 days from the entering into force of LD 191, i.e., by April 14, 2022.

II        Main contents of LD 191

The below summary covers the provisions of the LD 191 applicable to the marketing – and the pre-marketing – in Italy of EU UCITS and AIFs.

Duties of CONSOB and the Bank of Italy

The information on the national rules applicable to the cross-border distribution to be published on the websites of the national regulators, as required by article 5.1 of the Regulation (EU) 2019/1156 (“Reg 1156”) will be published in the websites of CONSOB and the Bank of Italy, according to the respective competences provided by the Italian law set out in article 5 of the TUF, basically the Bank of Italy for the domestic UCIs and CONSOB for the foreign ones.

Foreign UCITS

In relation to foreign UCITS, CONSOB will have to amend its regulations in order to discipline the “facilities” set out by article 92 of the UCITS Directive as amended by the CBDF. In particular, CONSOB will:

“regulate the facilities for the investors to be made available in Italy by EU UCITS, as provided for in Article 92 of Directive 2009/65/EC and, in particular:

a) determine the tasks of the facilities for the investors in order to ensure that investors can exercise their rights and have access to the information provided for in Article 92 of Directive 2009/65/EC;

(b) determine the language in which these facilities are to be provided;

(c) regulate the conditions under which the tasks referred to in point (a) may be carried out by a third party or by the EU UCITS jointly with a third party.”

Most likely the above exercise will be done by CONSOB by amending the provisions of its Issuers’ Regulation (Regulation 11971 of 1999, as amended – “RE”) governing the distribution of foreign UCITS, and will have to comply with the criteria of the CBDF, including, without limitation, the abolition of the current obligation provided by the Italian rules to have a paying agent and an investor relations manager established in Italy.

The cessation of the marketing of foreign UCITS in Italy must be preceded by a notification by the UCITS’ home member State(“de-notification”), according to the provisions of the UCITS Directive as amended by the CBDF and the formalities set out in the second-level rules to be issued by CONSOB.

Notwithstanding the receipt of a de-notification, the Italian regulators may demand additional data and information, continue to supervise on the compliance by the foreign ManCo/SICAV with the applicable EU and Italian rules – especially those on the protection of the investors who remain – although the Italian regulators may not require to comply with the requirements that governed the granting of the original UCITS passport.

it is worth noting that the LD 191 doesn’t address at all the one-month prior notice concerning the changes in the share classes marketed, set out by the new paragraph 8 of article 93 of the UCITS Directive as amended by the CBDF. Thus, it is expected that CONSOB will deal with this matter when amending the RE.

Pre-marketing of AIFs

The definition of “pre-marketing” in the LD 191 is the same as the one in article 4.(1) (aea) of the AIFMD as amended by the CBDF, and the other requirements in terms of difference between “pre-marketing” and “marketing” also reflect those introduced by the CBDF.

In connection with the pre-marketing of EU AIFs, CONSOB is informed by the home member State regulator and CONSOB may ask to the latter additional information on the pre-marketing activities carried out or to be carried in Italy.

In connection with the de-notification of AIFs, the rules provided by the LD 191 are substantially the same as those provided for the UCITS funds.

Other provisions of LD 191

The other provisions of the LD 191 concern the changes to the rules on EuVECA and EuSEF introduced by the CBDF and the update of the rules of the TUF on sanctions for breach of the new rules deriving from the CBDF.