Prepared by Fabrizio Cascinelli, Mario Zanin, Francesco Della Scala
As a result of the public consultation held between July and August 2023, Consob adopted, with Resolution No. 22923 of Dec. 6, 2023, its “Regulation on the Issuance and Circulation of Financial Instruments in Digital Form.”
This Regulation has been adopted pursuant to Article 28 of the so-called “FinTech Decree” i.e. Decree Law No. 25 of March 17, 2023, converted, with amendments, by Law No. 52 of May 10, 2023.
The FinTech Decree, in force as of 16 May 2023, has introduced a new form and circulation regime for certain financial instruments (digital form), recognizing the possibility of using distributed ledger technologies (DLT) for their issuance and transfer, regulating the relevant conditions and defining the rules for the circulation for these instruments.
This Decree represents, on the one hand, the national implementation to Regulation (EU) 858/2022, which established a pilot regime for DLT market infrastructures (“Pilot Regime“) and, on the other hand, also applies to situations not included in the scope of the Pilot Regime.
In such cases, it is provided that the relevant issues must take place on digital circulation registers maintained by managers who are registered on a special list maintained by Consob.
In this respect, the FinTech Decree provides that banks, investment firms, market operators, financial intermediaries, payment institutions, e-money institutions, insurance or reinsurance companies, issuers of financial instruments other than the above, as well as new participants specialized in this activity, may qualify as registry managers.
Therefore, by means of the Regulation, the Authority establishes the list of registry managers, defining the requirements necessary to make the registration scheme to the registry operative.
The Regulation consist of two parts and is accompanied by three Annexes; Part I, containing the “General Provisions” (regulatory sources, definitions, organizational unit responsible for the procedure and methods of communication with the Authority), and Part II dedicated to the “List of Registry Managers for Digital Circulation and related discipline.”
The Regulation firstly establish the list of registry managers for digital circulation, providing for the individuals who can be listed as “registry managers” and defining the information that must be indicated for each manager.
In addition, the Regulation defines:
- the application procedure for inclusion in the list of responsible subjects (referring to Annex 1 for detailed instructions for preparing the application and Annex 2 for the minimum content of the technical report illustrating the initiative);
- the inquiry for registration to be carried out by Consob;
- the cases of removal from the list (at the request of the manager or directly by Consob);
- the minimum content of the document that the registry manager must make available to the public about the registry’s operating procedures and the arrangements to safeguard its operations (refer to Annex 3).
The Regulations will enter into force on the day following its publication in the Official Gazette.
For completeness, it should be noted that the Fintech Decree also granted Consob additional regulatory powers, which the Authority has indicated that it will exercise successively and in multiples phases.
Read regolamento Consob sull’emissione e circolazione in forma digitale di strumenti finanziari