Financial facilities

Financial Intermediaries

Financial activities, such as acquisition of holdings in other companies, granting of loans (and guarantees), offer of payment services, and offer of foreign currency intermediation services, may be conducted by several types of entities.

Carrying-out of financial activities in relation to the public is reserved to intermediaries enrolled in the General Register. They are not subject to prudential supervision.

Upon meeting certain requirements, mostly of a quantitative nature or relating to the type of activities carried out, intermediaries already registered in the General Register must apply for registration in the Special Register, in which case they become subject to prudential supervision by the Bank of Italy.

Carrying-out of financial activities not in relation to the public is reserved to other entities enrolled in a separate Section of the General Register.

Investment Services/Asset Management

The Italian Financial Law has implemented the EU's Markets in Financial Instruments Directive Mifid on the provision of investment services.

Investment services include reception and transmission of orders in relation to one or more financial instruments, execution of orders on behalf of clients, dealing on own account, portfolio management, investment advice, underwriting of financial instruments and/or placing of financial instruments on a firm commitment basis, placing of financial instruments without a firm commitment basis, and operation of Multilateral Trading Facilities.

With the exception of EU-investment firms, which may operate under the Mutual Recognition framework, investment firms must be authorised by the Italian Exchange Commission (Consob), in consultation with the Bank of Italy. Banks (and financial intermediaries registered in the Special Register, only in respect of certain investment services) can also perform investment services, subject to a specific authorisation by the Bank of Italy, in consultation with Consob.

Asset management activities are reserved to asset management companies, authorised by the Bank of Italy, in consultation with Consob. Those companies can also carry out the investment service of dealing on its own account.

Investment firms and asset management companies are subject to supervision by Bank of Italy (for risk management and financial stability of the intermediary) and Consob (for compliance with disclosure requirements and soundness of customer relationships).

Markets and Exchanges

Organisation and management of regulated markets for financial instruments is an entrepreneurial activity, performed by joint stock companies (Market Management Companies). The establishment, organisation and management of regulated markets by Market Management Companies must be authorised by Consob pursuant to the Financial Law.

Market Management Companies are enrolled in a register maintained by Consob and are subject to its supervision.

Ten markets have been authorised:

(a) Mercato Telematico Azionario (MTA/Borsa), for the trading of shares;

(b) Mercato Telematico delle Obbligazioni e dei Titoli di Stato (MOT), for the trading of bonds and Treasury Bonds;

(c) Mercato Expandi, for the trading of securities issued by certain small and medium-size enterprises;

(d) Mercato Telematico degli OICR aperti ed ETC (ETF plus), for the trading of units of investment funds;

(e) Mercato Telematico dei Securitised Derivatives (Sedex), for the trading of securitised derivatives;

(f) Mercato degli Strumenti Derivati (IDEM), for the trading of derivative financial instruments regulated by the Financial Law;

(g) Mercato Telematico all'ingrosso dei Titoli di Stato (MTS), for the wholesale trading of Treasury Bonds;

(h) Mercato Bondvision for the wholesale trading of Treasury Bonds through the internet;

(i) MTS Corporate, for the trading of asset backed securities and quasi-government bonds; and

(j) Mercato TLX, for the trading of Treasury Bonds, corporate bonds, asset-backed securities, fund shares, sovereign bonds.

Markets (a) to (f) are managed by Borsa Italiana S.p.A. which is responsible for the organisation, management and promotion of the Italian Stock Exchange, specifically:

• defining and organising the functioning of the markets;

• defining rules and procedures for admission and listing on the market; and

• managing and overseeing the market.

Bank Accounts/Loans to Foreign Investors

There is no specific legal requirement to open an account with an Italian banking institution in order to conduct investments in Italy. However, anti-money laundering legislation has set limitations for the use of cash in investments.

A non-resident person is free to open and use a bank account. The bank must only verify the non-resident's identity and capacity according to his/her national law, and must require his/her identification information and more generally comply with anti-money laundering measures.

There are no legal prohibitions on an investor receiving bank loans which are freely negotiated between a bank and an investor, subject to applicable provisions of law.