General introduction to the regulatory framework
The Italian regulatory framework is characterised by rigorous and incisive rules, and supervisors with extensive powers.
The principles governing asset management are contained in the Italian Financial Act, and were primarily implemented – after the adoption of the AIFMD and the Undertakings for Collective Investment in Transferable Securities Directive (UCITS V) rules – by Ministerial Decree No. 30/2015, which sets out the general criteria applicable to Italian UCIs; the Bank of Italy's regulation of 19 January 2015 on the collective asset management rules and the relevant explanatory notes; the Bank of Italy's regulation of 5 December 2019 on internal organisation rules for intermediaries and asset management companies; and regulations issued by Consob.
The asset management industry is represented and supported by Assogestioni, a private organisation, which has developed several codes of practice and guidelines. Other organisations such as the Italian Association of Private Equity (AIFI) are active in different fields of the industry.
The rules governing the marketing in Italy of AIF units or shares fully reflect the regime set out in the AIFMD (including the marketing of non-EU AIFs or AIFs by non-EU AIFMs) and can be summarised as follows:
- EU AIFs to professional investors: the EU AIFM is required to (1) obtain prior authorisation in an EU jurisdiction that has already implemented the AIFMD; and (2) subsequently notify Consob through the home country regulator, otherwise the marketing in Italy of the relevant EU AIF units is prevented; and
- EU AIFs to retail investors: the EU AIFM is required to, in addition to obtaining the authorisation under (1) above, request Consob's authorisation.
As to the marketing in Italy of foreign collective investment schemes under the UCITS framework, the home country regulator must notify Consob before any marketing begins.
The Italian investment management industry was also affected by the implementation of MiFID II, which came into force in January 2018.
Although asset management companies do not fall under the scope of the product governance provisions under MiFID II, various initiatives have been adopted to facilitate the exchange of information between manufacturers (i.e., management companies) and distributors concerning, for example, the target markets and distribution strategies – because the distribution channel is required to comply with this regulation. Consob considers this a best practice that ultimately benefits retail investors.
Conversely, the marketing of UCIs by asset management companies is subject to MiFID II conduct rules and to product intervention measures (such as the prohibition, restriction or suspension of marketing) when investor protection or market stability – or both – are threatened. Similarly, asset management companies authorised to provide investment advisory, portfolio management or reception and transmission of orders are subject to MiFID II conduct rules for the provision of investment services.
Moreover, asset management companies that intend to market UCIs to retail investors are now required to publish a key information document on their website to enable retail investors to understand and compare the key features and risks of an investment.