FITD - Fondo Interbancario di Tutela dei Depositi

Legislative Decree n.385 of 1st September 1993

The 1993 Banking Law

INTRODUCTORY NOTE

In April 1994 the Bank of Italy published an English translation of the 1993 Banking Law – Legislative Decree 385 of 1 September 1993 – with the aim of fostering the widest possible knowledge and understanding of Italian banking legislation abroad.

Other two editions were published thereafter, in 1997 and 2000, to take account of a number of subsequent amendments.

This fourth edition corresponds to the Italian Banking Law in force as of February 2007. The text incorporates the amendments introduced by the following legislation:

- Decree Law 1 of 4 January 1994, ratified without amendment by Law 135 of 17 February 1994 containing provisions safeguarding agricultural credit (Article 1);

- Law 108 of 7 March 1996 containing provisions concerning usury (Article 5);

- Legislative Decree 415 of 23 July 1996 transposing Directive 93/22/EEC of 10 May 1993 on investment services in the securities field and Directive 93/6/EEC of 15 March 1993 on the capital adequacy of investment firms and credit institutions (Articles 63, 64 and 66);

- Legislative Decree 659 of 4 December 1996 transposing Directive 94/19/EEC on deposit-guarantee schemes (Articles 1, 2 and 3);

Legislative Decree 58 of 24 February 1998 (the Consolidated Law on Financial Intermediation pursuant to Articles 8 and 21 of Law 52 of 6 February 1996 (Article 211));

- Legislative Decree 43 of 10 March 1998 adapting Italian law to the provisions of the Treaty establishing the European Community in the field of monetary policy and the European System of Central Banks (Articles 6 and 11);

- Legislative Decree 213 of 24 June 1998 containing provisions for the introduction of the euro in Italy, pursuant to Article 1, paragraph 1, of Law 433 of 17 December 1997 (Art. 4);

Legislative Decree 333 of 4 August 1999 implementing Directive 95/26/EC reinforcing prudential supervision in the field of credit institutions;

- Legislative Decree 342 of 4 August 1999 containing amendments to Legislative Decree 385 of 1 September 1993 (the 1993 Banking Law);

- Law 39 of 1 March 2002 containing provisions for the performance of obligations arising in respect of Italy’s membership of the European Communities (2001 Community Law);

- Legislative Decree 61 of 11 April 2002 containing provisions governing criminal and administrative offences involving companies pursuant to Article 11 of Law 366 of 3 October 2001;

- Decree Law 269 of 30 September 2003 containing urgent measures to foster development and correct the public finances, ratified with amendments by Law 326 of 24 November 2003;

- Legislative Decree 37 of 6 February 2004 containing amendments to Legislative Decrees 5 and 6 of 17 January 2003 concerning the reform of company law, as well as amendments to Legislative Decree 385 of 1 September 1993 and Legislative Decree 58 of 24 February 1998;

- Legislative Decree 197 of 9 July 2004 implementing Directive 2001/24/EC on the reorganisation and winding up of credit institutions;

- Legislative Decree 310 of 28 December 2004 containing amendments to the provisions of company law and the 1993 Banking Law;

- Legislative Decree 122 of 20 June 2005 containing provisions safeguarding the property rights of purchasers of buildings to be constructed, pursuant to Law 210 of 2 August 2004;

- Legislative Decree 142 of 30 May 2005 implementing Directive 2002/87/EC on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate and establishing preliminary consultation in the field of insurance; - Legislative Decree 206 of 6 September 2005 containing the consumer code, pursuant to Article 7 of Law 229 of 29 July 2003;

- Law 262 of 28 December 2005 containing provisions safeguarding savings and governing financial markets;

- Decree Law 223 of 4 July 2006 containing urgent provisions for economic and social revival, limiting and rationalizing public expenditure, measures concerning revenues and countering tax evasion, ratified with amendments by Law 248 of 4 August 2006;

- Decree Law 297 of 27 December 2006 containing urgent provisions regarding the transposition of Directives 2006/48/EC and 2006/49/EC and the adaptation of Italian law to Community decisions concerning ground assistance in airports, the National Agency for Young People and hunting, ratified with amendments by Law 15 of 23 February 2007;

- Legislative Decree 303 of 29 December 2006 amending Law 262 of 28 December 2005, the 1993 Banking Law and the Consolidated Law on Financial Intermediation. The Italian text alone is authentic.

Article 1 (Definitions)

1. In this Legislative Decree:

a) “credit authorities” shall mean the Interministerial Committee for Credit and Savings, the Minister for the Economy and Finance and the Bank of Italy;

b) “bank” shall mean an undertaking authorized to engage in banking;

c) “Credit Committee” shall mean the Interministerial Committee for Credit and Savings;

d) “Consob” shall mean the Commissione nazionale per le società e la borsa;

d-bis) “COVIP” shall mean the Commissione di vigilanza sui fondi pensione;

e) “ISVAP” shall mean the Istituto per la vigilanza sulle assicurazioni private e di interesse collettivo;

f) “UIC” shall mean the Ufficio italiano dei cambi;

g) “member state” shall mean a state which is a member of the European Community;

g-bis) “home member state” shall mean the member state in which a bank has been authorised to engage in banking;

g-ter) “host member state” shall mean the member state in which a bank has a branch or in which it provides services;

h) “non-member state” shall mean a state which is not a member of the European Community;

i) “Bankruptcy Law” shall mean Royal Decree 267 of 16 March 1942;

l) “competent authorities” shall mean, according to the circumstances, one or more of the authorities responsible for supervising banks, investment firms, collective investment undertakings, insurance companies and financial markets;

m) [Superseded].

2. In this Legislative Decree:

a) “Italian bank” shall mean a bank having its registered office in Italy;

b) “EC bank” shall mean a bank having its registered office and head office in any one member state other than Italy;

c) “non-EC bank” shall mean a bank having its registered office in a state which is not a member of the European Community;

d) “banks authorized in Italy” shall mean Italian banks and Italian branches of non-EC banks;

e) “branch” shall mean a place of business which forms a legally dependent part of a bank and which carries out directly all or some of the business of the bank;

f) “activities subject to mutual recognition” shall mean the activities of:
1. acceptance of deposits and other repayable funds from the public; 2. lending (including, inter alia, consumer credit, mortgage credit, factoring with or without recourse, and financing of commercial transactions including forfaiting); 3. financial leasing; 4. money transmission services; 5. issuing and administering means of payment (credit cards, travelers' cheques and bankers' drafts); 6. guarantees and commitments; 7. trading for own account or for account of customers in: - money market instruments (cheques, bills, CDs, etc.); - foreign exchange; - financial futures and options; - exchange and interest rate instruments; - securities; 8. participation in securities issues and the provision of services relating to such issues; 9. advice to undertakings on capital structure, industrial strategy and related questions, and advice and services relating to mergers and the purchase of undertakings; 10. money broking; 11. portfolio management and advice; 12. safekeeping and administration of securities; 13. credit reference services; 14. safe custody services; 15. all other activities that by virtue of adaptive measures adopted by Community authorities are added to the list annexed to the Second Banking Directive of the Council of the European Communities (89/646/EEC of 15 December 1989);

g) “financial intermediaries” shall mean the persons entered in the register provided for in Article 106.

h) “close links” shall mean the relationships between a bank and an Italian or foreign person: 1) that controls the bank; 2) that is controlled by the bank; 3) that is controlled by the same person as controls the bank; 4) that holds at least 20 per cent of the bank’s voting capital; 5) at least 20 per cent of whose voting capital is held by the bank. h-bis) “electronic monetary institutions” shall mean undertakings other than banks that issue electronic money; h-ter) “electronic money” shall mean the monetary value represented by a claim on the issuer that is stored on an electronic device, issued on receipt of funds of an amount not less in value than the monetary value issued and accepted as a means of payment by undertakings other than the issuer; h-quater) “holding” shall mean shares, capital parts or other financial instruments conferring administrative rights or in any case the rights envisaged in Article 2351, last paragraph, of the Civil Code; h-quinquies) “significant holding” shall mean a holding that gives control of a company and the holdings identified by the Bank of Italy in conformity with resolutions adopted by the Credit Committee, with regard to the various situations regulated, taking account of voting rights and other rights that make it possible to exercise influence over the company. 3. The Bank of Italy may amend, in accordance with resolutions adopted by the Credit Committee, the definition of close links contained in paragraph 2, subparagraph h), in order to avoid situations preventing the effective exercise of supervisory functions. 3-bis. Unless otherwise regulated, the provisions of this Legislative Decree that refer to the board of directors, administrative bodies and directors shall also apply to the management board and its members. 1 Directive 89/646/EEC was repealed by Article 67 of Directive 2000/12/EC of 20 March 2000, which was in turn repealed by Article 158 of Directive 2006/48/EC of 14 June 2006, which incorporates the rules governing the taking up and pursuit of the business of credit institutions. The activities subject to mutual recognition are listed in Annex I of Directive 2006/48/EC. 3-ter. Unless otherwise regulated, the provisions of this Legislative Decree that refer to the board of statutory auditors, members of the board of statutory auditors and the control body shall also apply to the supervisory board and the management control committee and their members.

TITLE I CREDIT AUTHORITIES

Article 2 (The Interministerial Committee for Credit and Savings)

1. The Interministerial Committee for Credit and Savings shall be the highest supervisory authority for credit and the protection of savings. It shall decide on matters assigned to it by this Legislative Decree or by other laws. The Credit Committee shall be composed of the Minister for the Economy and Finance, who shall be its Chairman, the Minister of International Trade, the Minister for Agricultural, Food and Forestry Policies, the Minister for Economic Development, the Minister for Infrastructure, the Minister of Transport and the Minister for European Community Affairs. Meetings of the Committee shall be attended by the Governor of the Bank of Italy.

2. The Chairman may invite other ministers to attend meetings for the purpose of consultation. For the same purpose, the Chairman may invite the presidents of other competent authorities to participate in individual meetings that address issues related to the fields for which they have statutory responsibility that regard the overall stability, transparency and efficiency of the financial system.

3. The Credit Committee shall be duly constituted where a majority of its members are present and shall decide by majority vote of those present.

4. The Director General of the Treasury shall serve as Secretary to the Committee. The Credit Committee shall establish rules for its internal organization and operation. For the performance of its functions the Credit Committee shall avail itself of the services of the Bank of Italy.

Article 3 (The Minister for the Economy and Finance)

1. The Minister for the Economy and Finance shall adopt by decree the measures within the scope of his authority provided for in this Legislative Decree and may submit such measures to the Credit Committee for its prior consideration.

2. As a matter of urgency the Minister for the Economy and Finance shall act in place of the Credit Committee. Notice of the measures adopted in such cases shall be given to the Credit Committee at its next meeting, which must be convened within thirty days.

Article 4 (The Bank of Italy)

1. The Bank of Italy in the performance of its supervisory functions shall formulate proposals for resolutions within the scope of the authority of the Credit Committee provided for in Titles II and III and Article 107. Furthermore, the Bank of Italy shall issue regulations in the cases provided for by law, issue instructions and adopt specific measures within the scope of its authority.

2. The Bank of Italy shall establish and give prior public notice of the principles and methods of its supervisory activity.

3. The Bank of Italy without prejudice to time limits otherwise established by law shall establish the time limits for the adoption of measures, specify the person responsible for the process, indicate the reasons for its decisions and publish measures for general application. Insofar as they are compatible the provisions of Law 241 of 7 August 1990 shall apply and the Governor of the Bank of Italy shall be understood to have the power to adopt general administrative measures pursuant to such provisions.

4. The Bank of Italy shall publish an annual report on its supervisory activity.

Article 5 (Purpose and scope of supervision)

1. The credit authorities shall exercise the powers of supervision conferred on them by this Legislative Decree having regard to the sound and prudent management of the persons subject to supervision, to the overall stability, efficiency and competitiveness of the financial system and to compliance with provisions concerning credit.

2. Supervision shall be exercised over banks, banking groups and financial intermediaries.

3. The credit authorities shall also exercise the other powers conferred on them by law.

Article 6 (Relationship to Community law)

1. The credit authorities shall exercise their powers in harmony with the provisions of the European Community, apply Community regulations and decisions and act on Community recommendations on credit and financial matters.

Article 7 (Professional secrecy and cooperation between authorities)

1. All the information and figures possessed by the Bank of Italy by virtue of its supervisory activity shall be covered by professional secrecy, also with respect to governmental authorities, except for the Minister for the Economy and Finance as Chairman of the Credit Committee. Professional secrecy may not be invoked with respect to judicial authorities when the information requested is needed for investigations or proceedings involving violations subject to criminal sanctions.

2. In the performance of their supervisory functions employees of the Bank of Italy shall be public officials and required to report any irregularities which they may discover exclusively to the Governor, even where such irregularities appear to be criminal offences.

3. Employees of the Bank of Italy shall be bound by professional secrecy.

4. Governmental authorities and public entities shall provide the information and other forms of cooperation requested by the Bank of Italy in accordance with the laws governing each authority or entity.

5. The Bank of Italy, Consob, COVIP, ISVAP and the UIC shall cooperate by exchanging information and otherwise for the purpose of facilitating the performance of their respective functions. The above- mentioned authorities may not invoke professional secrecy in their dealings with each other.

6. The Bank of Italy shall cooperate by exchanging information and otherwise with the competent authorities of the other member states for the purpose of facilitating the performance of their respective functions. Information received by the Bank of Italy may be transmitted to competent Italian authorities unless permission is denied by the authority of the member state providing the information.

7. Within the framework of cooperation agreements and equivalent obligations of confidentiality the Bank of Italy may exchange information related to the performance of supervisory functions with the competent authorities of non-member states; information the Bank of Italy has received from another member state may be transmitted only with the explicit consent of the authorities that supplied it.

8. The Bank of Italy may exchange information with administrative or judicial authorities within the scope of liquidation or insolvency proceedings, in Italy or abroad, regarding banks, foreign branches of Italian banks, Italian branches of EC and non-EC banks, and persons included within the scope of consolidated supervision. The exchange of information with authorities of non-member states shall be carried out in accordance with paragraph 7.

9. The Bank of Italy may provide Italian depositor guarantee schemes and, provided confidentiality is ensured, foreign schemes with information and figures in its possession that are necessary for their operation.

9-bis. [Repealed]

10. In compliance with the conditions established in the Community directives applicable to banks, the Bank of Italy shall exchange information with all other foreign authorities and persons specified in such directives.

Article 8 (Publication of administrative measures and statistical data)

1. The Bank of Italy shall publish a Bulletin containing the general measures adopted by the credit authorities and other significant measures concerning persons subject to supervision. Such measures shall be published within the second month following that of their adoption.

2. The resolutions of the Credit Committee and general measures adopted by the Minister for the Economy and Finance pursuant to this Legislative Decree shall be published in the Gazzetta Ufficiale della Repubblica italiana. The general measures adopted by the Bank of Italy shall be published in the Gazzetta Ufficiale della Repubblica italiana where their scope extends to persons other than those subject to supervision.

3. The Bank of Italy shall publish statistical reports and data on persons subject to supervision.

Article 9 (Complaint to the Credit Committee)

1. Parties having an interest in a measure adopted by the Bank of Italy in the performance of the supervisory functions conferred on it by this Legislative Decree may file a complaint with the Credit Committee within thirty days of receipt of notice of the measure or of its publication. Insofar as they are compatible the provisions of Chapter I of Presidential Decree 1199 of 24 November 1971 shall apply.

2. The complaint shall be decided on by the Credit Committee after consulting the professional associations of the persons subject to supervision where the decision on the complaint involves questions of general interest to the profession.

3. The Credit Committee shall establish the general rules of procedure for the consultation referred to in paragraph

TITLE II BANKS

Chapter I

Notion of banking and fund-raising

Article 10 (Banking)

1. Fund-raising on a public basis and the granting of credit constitute banking. Banking is an entrepreneurial activity.

2. Banking shall be restricted to banks.

3. In addition to banking, banks may engage in any other financial business, in accordance with the provisions applicable to each activity, and in related and instrumental activities. Restrictions established by law on such activities shall be unaffected.

Article 11 (Fund-raising)

1. For the purposes of this Legislative Decree the acceptance of repayable funds in the form of deposits or in other forms constitutes fund- raising.

2. Persons other than banks may not engage in fund-raising on a public basis.

2-bis. The receipt of funds connected with the issue of electronic money shall not constitute fund-raising on a public basis.

3. The Credit Committee shall establish limits and criteria, having regard inter alia to the activities and legal form of the persons accepting funds, on the basis of which fund-raising shall not constitute fund-raising on a public basis where the funds are accepted from specific categories of persons defined on the basis of corporate or employment relationships.

4. The prohibition on fund-raising on a public basis shall not apply: a) to member states, to international organizations of which one or more member states are members or to regional or local authorities which are permitted to raise funds under the national laws of member states; b) to non-member states or to foreign persons authorized under special provisions of Italian law; c) to companies with reference to fund-raising effected pursuant to the provisions of the Civil Code by means of the issue of bonds, other debt securities or other financial instruments; d) to other forms of fund-raising specifically permitted by law, in compliance with the principle of the protection of savings.

4-bis. The Credit Committee shall establish criteria for the identification of financial instruments, however they are denominated, whose issue constitutes fund-raising.

4-ter. Where not otherwise regulated by law, the Credit Committee shall establish limits on the issue of financial instruments and, acting on a proposal formulated by the Bank of Italy after consulting Consob, may determine the maturity and face value of the financial instruments, other than bonds, used for fund-raising on a public basis.

4-quater. For the purpose of protecting the restriction on banking, the Credit Committee may establish criteria and limits, even in derogation of those established by the Civil Code, for the fund-raising effected by persons that engage in the granting of financing on a public basis in any form.

4-quinquies. For the purpose of protecting savings, professional investors who are responsible pursuant to the Civil Code for the solvency of the company for bonds, other debt securities and other financial instruments issued by the company must comply with appropriate capital requirements established by the competent supervisory authorities.

5. In the instances referred to in paragraph 4, subparagraphs c) and d), the raising of sight funds and any form of fund-raising related to the issue or administration of generally spendable means of payment shall be precluded.

Article 12 (Bonds and certificates of deposit issued by banks)

1. Banks, however formed, may issue registered and bearer bonds, including convertible bonds.

2. [Repealed]

3. The issue of non-convertible bonds and bonds convertible into securities of other companies shall be approved by resolution of the administrative body; Articles 2410, 2412, 2413, 2414 first paragraph, subparagraph 3, 2414-bis, 2415, 2416, 2417, 2418 and 2419 of the Civil Code shall not apply.

4. Where bonds are convertible into own shares the provisions of the Civil Code shall apply, except for Article 2410.

4-bis. The provisions of paragraphs 3 and 4 shall also apply to financial instruments subject to the regulations governing bonds provided for in the Civil Code.

5. The Bank of Italy, in compliance with the resolutions of the Credit Committee, shall regulate the issue by banks of non-convertible bonds and bonds exchangeable into securities of other companies as well as financial instruments other than holdings.

6. Banks may issue registered and bearer certificates of deposit. The Bank of Italy may regulate the procedures for such issue in compliance with the resolutions of the Credit Committee.

7. The Bank of Italy shall regulate the issue by banks of subordinated loans, loans which are not redeemable and loans which are redeemable subject to authorization by the Bank of Italy. Such issues may also be made in the form of bonds or certificates of deposit.

Chapter II Banking authorization, branches and freedom to provide services

Article 13 (Register)

1. The Bank of Italy shall enter banks authorized in Italy and branches of EC banks established within Italy in a register.

2. Banks shall indicate in their documents and correspondence that they are included in the register.

Article 14 (Banking authorization)

1. The Bank of Italy shall grant authorization to engage in banking where the following conditions are met: a) the legal form adopted is that of a società per azioni or a società cooperativa per azioni a responsabilità limitata; a-bis) the registered office and the head office are located in Italy; b) the paid-up capital is not less than that established by the Bank of Italy; c) a programme of operations has been submitted together with the instrument of incorporation and bylaws; d) the owners of significant holdings satisfy the integrity requirements established pursuant to Article 25 and the conditions are met for granting the authorization provided for in Article 19; e) the persons performing administrative, managerial or control functions satisfy the experience, integrity and independence requirements established pursuant to Article 26. f) close links do not exist between the bank or the components of the group it belongs to and other persons preventing the effective exercise of supervisory functions.

2. The Bank of Italy shall refuse authorization where verification of the conditions indicated in paragraph 1 shows that sound and prudent management is not ensured.

2-bis. The Bank of Italy shall regulate the authorization procedure and the cases in which an authorization shall expire when a bank does not begin to engage in the activity.

3. Procedures for entry in the Company Register may not be initiated in the absence of the authorization referred to in paragraph 1.

4. The establishment of the first branch in Italy of a non-EC bank shall be authorized by the Bank of Italy after consulting the Ministry for Foreign Affairs, subject to satisfaction of conditions corresponding to those specified in paragraph 1, subparagraphs b), c) and e). Authorization shall be granted having regard inter alia to reciprocity.

Article 15 (Branches)

1. Italian banks may establish branches in Italy and in other member states. The Bank of Italy may prohibit the establishment of a new branch for reasons pertaining to the adequacy of the bank's organizational structure or to its financial situation, profits and losses and assets and liabilities.

2. Italian banks may establish branches in a non-member state, subject to authorization by the Bank of Italy.

3. EC banks may establish branches in Italy. The establishment of the first branch shall be preceded by a notice to the Bank of Italy from the competent authorities of the home member state; the branch shall commence its activities two months after notice has been given. The Bank of Italy and Consob within the scope of their respective authority shall, where appropriate, notify the competent authorities of the member state and the bank of the conditions to which the activities of the branch shall be subject in the interest of the general good.

4. Non-EC banks which have already established a branch in Italy may establish other branches subject to authorization by the Bank of Italy.

5. Where securities business is planned, the Bank of Italy shall notify Consob of notices received pursuant to paragraph 3 and of the opening of branches abroad by Italian banks.

Article 16 (Freedom to provide services)

1. Italian banks may carry on activities subject to mutual recognition in a member state without establishing branches there, in compliance with the procedures established by the Bank of Italy.

2. Italian banks may operate in a non-member state without establishing branches there subject to authorization by the Bank of Italy.

3. EC banks may carry on the activities referred to in paragraph 1 in Italy without establishing branches there after the Bank of Italy has been informed by the competent authorities of the home member state.

4. Non-EC banks may operate in Italy without establishing branches there subject to authorization by the Bank of Italy, issued after consulting Consob in the case of securities business.

5. Where securities business is planned, the Bank of Italy shall notify Consob of notices received pursuant to paragraph 3 and of the provision of services abroad by Italian banks.

Article 17 (Activities not subject to mutual recognition)

1. The Bank of Italy, in compliance with the resolutions of the Credit Committee, shall regulate the pursuit in Italy by EC banks of activities not subject to mutual recognition, however carried on.

Article 18 (Financial companies subject to mutual recognition)

1. The provisions of Article 15, paragraph 1, and Article 16, paragraph 1, shall also apply to a financial company having its registered office in Italy and subject to forms of prudential supervision where the controlling interest is held by one or more Italian banks and the conditions established by the Bank of Italy are met.

2. The provisions of Article 15, paragraph 3, and Article 16, paragraph 3, shall also apply, in harmony with Community law, to a financial company having its registered office in a member state where the controlling interest is held by one or more banks whose registered offices are in the same member state.

3. Where securities business is planned, the Bank of Italy shall give notice to Consob of financial companies subject to mutual recognition under paragraphs 1 and 2.

4. The provisions of Article 54, paragraphs 1, 2 and 3, shall apply to financial companies subject to mutual recognition under paragraphs 1 and 2.

5. The provisions of Article 79 shall apply to financial companies subject to mutual recognition under paragraph 2.

Chapter III Holdings of capital in banks

Article 19 (Authorization)

1. Prior authorization by the Bank of Italy shall be required where the acquisition, in whatever capacity and by whomever effected, of significant holdings in a bank and in any case the acquisition of shares or capital parts that would result, taking account of shares or capital parts already held, in a holding which exceeds 5 per cent of the voting capital of the bank.

2. Prior authorization by the Bank of Italy shall also be required for variations in significant holdings which would result in holdings which exceed the limits established by the Bank of Italy or which, regardless of such limits, would result in control of the bank.

3. The prior authorization referred to in paragraph 1 shall also be required for the acquisition of control of a company having a holding referred to in that paragraph.

4. The Bank of Italy shall specify the persons required to apply for authorization where the rights attaching to the significant holdings are exercisable by or attributed to a person other than the owner of the holding.

5. The Bank of Italy shall grant authorization subject to conditions likely to ensure the sound and prudent management of the bank; authorization may be suspended or revoked.

6. Persons who, through subsidiary companies or otherwise, engage in significant business activity in sectors other than banking and finance may not be authorized to acquire holdings when the total share of voting rights held would exceed 15 per cent or when the acquisition would result in control of the bank. To this end the Bank of Italy shall specify the relevant voting rights and other rights.

7. The Bank of Italy shall refuse or revoke authorization where there are agreements, however concluded, which would result on a lasting basis in a significant concentration in the hands of persons specified in paragraph 6 of the power to appoint or remove a majority of the directors or the members of the supervisory board of a bank such that its sound and prudent management is jeopardized.

8. Where the participants in transactions referred to in paragraphs 1 and 3 include persons from non-member states which do not assure reciprocity, the Bank of Italy shall transmit the application for authorization to the Minister for the Economy and Finance; acting on a proposal from such Minister, the President of the Council of Ministers may prohibit authorization.

8-bis. The authorizations envisaged in this article and the prohibition envisaged in paragraph 6 shall also apply to the direct or indirect acquisition of control resulting from a contract with the bank or from a clause in its bylaws.

9. The Bank of Italy, in compliance with the resolutions of the Credit Committee, shall issue regulations implementing this Article.

Article 20 (Notification requirements)

1. Any person who has a significant holding in a bank shall notify both the Bank of Italy and the bank. Variations in holdings shall be notified where they exceed the limit established by the Bank of Italy.

2. Any agreement, however concluded, including those having the form of an association, which governs or could result in the concerted exercise of voting rights in a bank or cooperative bank or in the parent company of such bank must be notified to the Bank of Italy by the participants or by the legal representatives of the bank or company to which the agreement refers within five days of the signing of the agreement or, where the agreement has not been reduced to writing, of the time when the circumstances which reveal the existence of the agreement are ascertained. Where such agreements result in the concerted exercise of voting rights such that the sound and prudent management of the bank is jeopardized, the Bank of Italy may suspend the voting rights of participants in the agreement.

3. The Bank of Italy shall establish the conditions, procedures and time limits for the notices provided for in paragraph 1, also where voting rights are exercisable by or attributed to a person other than the owner of the holding. The Bank of Italy shall also establish the procedures for the notifications provided for in paragraph 2.

4. For the purpose of verifying compliance with the requirements referred to in paragraphs 1 and 2, the Bank of Italy may request information from any interested parties.

Article 21 (Requests for information)

1. The Bank of Italy may require a bank and the companies and entities of whatever nature which own holdings in the bank to provide the names of the owners of holdings on the basis of the register of members, notifications received or other information available.

2. The Bank of Italy may also require the directors of companies and entities which own holdings in a bank to provide the names of the persons that control such companies and entities.

3. Trust companies in whose names holdings belonging to third parties are registered shall communicate the names and particulars of the beneficiaries to the Bank of Italy at its request.

4. Information referred to in this Article may also be required of foreign persons.

5. The Bank of Italy shall inform Consob of requests involving companies and entities whose securities are traded on a regulated market.

Article 22 (Indirect holdings)

1. For the purposes of the application of Chapters III and IV of this Title account shall also be taken of holdings acquired or held in any way through subsidiary companies, trust companies or nominees.

Article 23 (Notion of control)

1. For the purposes of this Chapter control shall exist, with reference inter alia to persons other than companies, in the cases referred to in Article 2359, first and second paragraphs, of the Civil Code and in the presence of contracts or provisions of the bylaws that establish or effectively entail the power to exercise management and coordination functions.

2. In the absence of proof to the contrary, control shall be deemed to exist in the form of dominant influence in any of the following situations: 1) where a person, pursuant to agreements, is entitled to appoint or remove a majority of the directors or the members of the supervisory board or controls alone a majority of the voting rights for the purposes of adopting resolutions concerning the matters referred to in Articles 2364 and 2364-bis of the Civil Code; 2) where a person owns holdings which would allow such person to appoint or remove a majority of the members of the board of directors or the supervisory board; 3) where there exist financial or organizational relationships, including those between members, which are likely to produce one of the following effects: a) the transfer of profits or losses; b) the coordination of the management of an undertaking with that of other undertakings for the purpose of pursuing a common objective; c) the attribution of powers greater than those deriving from the holdings owned; d) the attribution of powers in the choice of directors, members of the supervisory board or managers of undertakings to persons other than those entitled to exercise such powers on the basis of ownership of holdings; 4) where undertakings are subject to common management arising from the composition of the administrative bodies or other concurrent factors.

Article 24 (Suspension of voting rights and other rights, obligation to divest)

1. Voting rights and other rights that enable the holder to influence the company attaching to holdings for which the authorizations provided for in Article 19 have not been obtained or have been suspended or revoked may not be exercised. Likewise voting rights and other rights that enable the holder to influence the company attaching to holdings for which the notices provided for in Article 20 have not been given may not be exercised.

2. In the event of non-compliance, resolutions or other acts adopted with the decisive contribution of the holdings envisaged in paragraph 1 may be challenged under the provisions of the Civil Code . The challenge may also be initiated by the Bank of Italy within one hundred and eighty days of the date of the resolution or, where the resolution is subject to entry in the Company Register, within one hundred and eighty days of such entry, or, where the resolution is subject only to deposit with the office of the Company Register, within one hundred and eighty days of the date of such deposit. The holdings for which voting rights may not be exercised shall be counted for the purpose of establishing the due constitution of the related general meeting.

3. The holdings for which the authorizations provided for in Article 19 have not been obtained or have been revoked, as well as those held in violation of paragraph 6 of Article 19, must be divested within the time limits established by the Bank of Italy. In the event of non-compliance, the court, upon request of the Bank of Italy, shall order the sale of such holdings held in violation of paragraph 6 of Article 19. 3-bis. The rights attaching to contracts or clauses of the bylaws for which the authorizations provided for in Article 19 have not been obtained or have been suspended or revoked may not be exercised.

Chapter IV Experience and integrity requirements

Article 25 (Integrity requirements for owners of holdings)

1. The Minister for the Economy and Finance, after consulting the Bank of Italy, shall establish the integrity requirements for owners of significant holdings by a regulation issued under Article 17, paragraph 3, of Law 400 of 23 August 1988.

2. In the regulation referred to in paragraph 1 the Minister for the Economy and Finance shall establish the size of the holdings which must be owned for such paragraph to apply. For this purpose holdings owned through subsidiary companies, trust companies or nominees shall also be considered.

3. Failure to satisfy such requirements shall preclude the exercise of the voting rights and other rights that enable the holder to influence the company attaching to holdings in excess of the above-mentioned limit. In the event of non-compliance, resolutions or other acts adopted with the vote or decisive contribution of the holdings envisaged in paragraph 1 may be challenged under the provisions of the Civil Code. The challenge may also be initiated by the Bank of Italy within one hundred and eighty days of the date of the resolution or, where the resolution is subject to entry in the Company Register, within one hundred and eighty days of the date of such entry, or, where the resolution is subject only to deposit with the office of the Company Register, within one hundred and eighty days of the date of such deposit. The holdings for which voting rights may not be exercised shall be counted for the purpose of establishing the due constitution of the related general meeting.

4. Holdings exceeding the limit referred to in paragraph 2 owned by persons who do not satisfy the integrity requirements must be divested within the time limits established by the Bank of Italy.

Article 26 (Experience, integrity and independence requirements for corporate officers)

1. Persons performing administrative, managerial or control functions in banks shall satisfy the experience, integrity and independence requirements established by the Minister for the Economy and Finance, after consulting the Bank of Italy, in a regulation issued under Article 17, paragraph 3, of Law 400 of 23 August 1988.

2. Failure to satisfy the requirements shall result in disqualification from office. The disqualification shall be declared by the board of directors, the supervisory board or the management board within thirty days of the appointment or within thirty days of its learning of subsequent failure. In the event of inaction by the board of directors the Bank of Italy shall declare the disqualification.

2-bis. In the event of failure to satisfy independence requirements established by the Civil Code or the bylaws of the bank, the provisions of paragraph 2 shall apply.

3. The regulation referred to in paragraph 1 shall establish the grounds for temporary suspension from office and its duration. The suspension shall be declared in the manner established by paragraph 2.

Article 27 (Incompatibility)

1. The Credit Committee shall regulate the assumption of administrative positions in banks by public employees. The application of Article 26 shall be unaffected. Chapter V Cooperative banks

Article 28 (Applicable provisions)

1. Pursuit of banking by società cooperative shall be restricted to banche popolari and banche di credito cooperativo governed by Sections I and II of this Chapter.

2. Powers of control over società cooperative conferred on governmental authorities by the Civil Code shall not apply to banche popolari or banche di credito cooperativo.

2-bis. For the purposes of tax relief measures, banche di credito cooperativo that satisfy the mutual aid requirements provided for in Article 2514 of the Civil Code and the requirement to operate primarily with members provided for in Article 35 of this Legislative Decree shall be considered cooperative a mutualità prevalente. Section I Banche popolari

Article 29 (General provisions)

1. Banche popolari shall be formed as società cooperative per azioni a responsabilità limitata.

2. The face value of each share may not be less two euro. 3. Members of the administrative and control bodies shall be appointed exclusively by the competent corporate bodies.

4. The provisions of Legislative Decree 1577 of 14 December 1947 and subsequent amendments shall not apply to banche popolari.

Article 30 (Members)

1. Each member shall have one vote regardless of the number of shares held.

2. No person may hold shares in excess of 0.50 per cent of the share capital. The bank, upon learning that the limit has been exceeded, shall give notice to the holder of the violation of the prohibition. Shares in excess of the limit must be divested within one year of notice; upon expiry of such limitation period, related property rights matured up to the divestiture of the excess shares shall be acquired by the bank.

3. The prohibition established by paragraph 2 shall not apply to Undertakings for Collective Investment in Transferable Securities, for which the limits established by the provisions specifically applicable to each category of undertaking shall apply.

4. The minimum number of members may not be less than two hundred. Where the number of members falls below the minimum, the membership must be replenished within one year; in the event of non-compliance the bank shall be placed in liquidation.

5. Resolutions of the board of directors refusing applications for admission to membership must state the reasons therefor, taking account of the interests of the cooperative, the provisions of the bylaws and the spirit of the cooperative form. The board of directors shall re-examine an application for admission upon request of the board of arbiters, constituted pursuant to the bylaws and complemented by a representative of the applicant. The request for re-examination must be presented within thirty days of receipt of notice of the resolution and the board of arbiters shall announce its decision within thirty days of the request.

6. Without prejudice to the provisions of paragraph 2, persons whom the board of directors have refused to admit to membership may exercise property rights attaching to shares held.

Article 31 (Transformations and mergers)

1. The Bank of Italy, in the interest of creditors or where there is a need for capital strengthening or with the aim of rationalizing the system, shall opolari into società per azioni or mergers involving banche popolari which result in the formation of società per azioni.

2. The resolutions of general meetings on such matters shall be adopted by the majorities established by the bylaws for amendments thereto; where in relation to the object of such amendments the bylaws provide for different majorities, the smallest shall apply. Members' right of withdrawal shall be unaffected.

3. Article 56, paragraph 2, and Article 57, paragraphs 2, 3 and 4, shall apply.

Article 32 (Profits)

1. Banche popolari must allocate at least ten per cent of net profits for the year to the legal reserve.

2. Profits not allocated to the legal reserve or other reserves, allocated otherwise as established by the bylaws or distributed to members shall be allocated to charity or social welfare. Section II Banche di credito cooperativo

Article 33 (General provisions)

1. Banche di credito cooperativo shall be formed as società cooperative per azioni a responsabilità limitata.

2. The name must contain the expression “credito cooperativo”.

3. Members of the administrative and control bodies shall be appointed exclusively by the competent corporate bodies.

4. The face value of each share may not be less than twenty-five euro or more than five hundred euro.

Article 34 (Members)

1. The minimum number of members of a banca di credito cooperativo may not be less than two hundred. Where the number of members falls below the minimum, the membership must be replenished within one year; in the event of non-compliance the bank shall be placed in liquidation.

2. To be a member of a banca di credito cooperativo it is necessary to reside, have a place of business or engage in a continuing activity in the area of the bank's operations.

3. Each member shall have one vote regardless of the number of shares held.

4. No member may hold shares having a total face value of more than fifty thousand euro.

5. [Repealed]

6. Article 30, paragraph 5, shall apply.

Article 35 (Operations)

1. Banche di credito cooperativo shall grant credit primarily to their members. The Bank of Italy shall authorize individual banche di credito cooperativo to operate primarily with persons other than members for fixed periods only where considerations of stability are involved.

2. The bylaws of banche di credito cooperativo shall contain provisions governing their activities, lending and fund-raising operations and geographical operating limits, established on the basis of the criteria laid down by the Bank of Italy.

Article 36 (Mergers)

1. The Bank of Italy, in the interest of creditors and where considerations of stability are involved, shall authorize mergers between banche di credito cooperativo and banks of a different nature which result nks having the form of società per azioni.

3. Article 57, paragraphs 2, 3 and 4, shall apply.

Article 37 (Profits)

1. Banche di credito cooperativo must allocate at least seventy per cent of net profits for the year to the legal reserve.

2. A portion of net profits for the year must be paid, in the amount and manner established by law, into mutualistic funds for the promotion and development of cooperation.

3. Profits not allocated pursuant to the preceding paragraphs, used to increase the value of the shares, allocated to other reserves or distributed to members must be allocated to charity or mutual aid.

Chapter VI Provisions concerning certain credit operations Section I Real estate and public works credit

Article 38 (Notion of real estate credit)

1. Real estate credit shall have as its object the granting by banks of medium and long-term loans secured by a first mortgage on real property.

2. The Bank of Italy, in compliance with the resolutions of the Credit Committee, shall determine the maximum amount of such loans, which shall mortgaged property or to the cost of the work to be done on the same, as well as the situations in which the existence of previously recorded mortgages shall not prevent the granting of loans.

Article 39 (Mortgages)

1. For the purposes of recording mortgages banks may elect as domicile their head office.

2. Where the completion of the contract and the disbursement of the money are separate acts, the keeper of the property registers, on the basis of the receipt provided by the beneficiary of the loan, shall note beside the earlier entry that the money has been disbursed and any change in the interest agreed to by the parties; in such cases the interest recorded in the notation shall have the same priority.

Bank claims arising from loans with indexing clauses shall be secured by the recorded mortgage up to the total amount effectively owed as a result of the application of such clauses. The adjustment of the mortgage shall be effected automatically where the mortgage record mentions the indexing clause.

4. Mortgages securing loans shall not be subject to revocation in bankruptcy where they have been recorded ten days prior to publication of the judgment declaring the bankruptcy. Article 67 of the Bankruptcy Law shall not apply to payments made by the debtor in respect of real estate loans.

5. Upon discharge of each fifth of the original debt, debtors shall be entitled to a proportional reduction of the amount recorded. They shall also be entitled to the partial release of one or more mortgaged properties where documents produced or professional valuations establish that the remaining encumbered properties constitute sufficient security for the amount still owing, in accordance with Article 38.

6. In the case of condominium buildings or complexes for which the individual portions, even if under construction, may be entered in the land registry separately, the debtor, the third-party purchaser, the promisee purchaser or the assignee of the mortgaged property or part thereof, the latter three, with sole regard to the portion purchased or promised for purchase or assignment, shall be entitled to a division of the loan into quotas and, accordingly, to a proportionate division of the securing mortgage.

6-bis. The bank shall perform the duties referred to in paragraph 6 within ninety days of the date of receipt of the request to divide the loan into quotas accompanied by appropriate documentation proving the identity of the requesting party, the date of title and the entry in the land registry of the individual portions for which division of the loan has been requested. The time limit shall be extended to one hundred and twenty days where the request regards a loan to be divided into more than fifty quotas.

6-ter. Where the bank does not act by the time limit specified in paragraph 6-bis, the requesting party may petition the president of the court in whose jurisdiction the property is located. Where the president of the court, having heard the parties, grants the petition, he shall designate a notary who, individually or with assistants, shall draft a public instrument dividing the loan signed exclusively by the notary. Repayment of the amounts disbursed in respect of the divided loan quotas shall commence as from the date of the instrument establishing the division or any subsequent date established in the mortgage contract; such circumstance shall be mentioned in the instrument establishing the division. 6-quater. Unless otherwise agreed by the parties, the loan repayment period shall be equal to that originally established in the mortgage contract, and repayment shall be effected at the interest rate determined on the basis of the criteria established for the grace period immediately preceding the start of the loan repayment period. The head of the competent land registry office shall note the division of the loan and the related mortgage, the starting date and duration of the loan repayment period and the interest rate beside the entry in the mortgage record.

7. For the purposes of registration and mortgage charges and the honorarium and fees due to the notary, the mortgage documents and formalities, including notations, shall be considered as a single agreement, a single entry in the property registers and a single certificate. The notary's honorarium shall be reduced by half.

Article 40 (Early repayment and termination of the contract)

1. Debtors may repay all or part of their debt early by paying the bank a contractually determined all-inclusive early repayment fee. Contracts shall specify the manner of calculating such fee in accordance with the methods laid down by the Credit Committee for the sole purpose of ensuring the transparency of contractual conditions.

2. The bank may cite late payment as cause for the termination of the contract where it has occurred at least seven times, consecutively or otherwise. For this purpose, a payment shall be considered late where it is effected between thirty and one hundred and eighty days after the due date of the instalment.

Article 41 (Execution)

1. In actions for execution in connection with real estate credit notice of the contractual right of execution shall not be required.

2. The bank may initiate or proceed with actions for execution on properties mortgaged as security for real estate loans even after a declaration of the debtor's bankruptcy. The official receiver may intervene in the action. Where the sum realized from the execution exceeds the quota allotted to the bank, the excess shall be assigned to the bankruptcy.

3. The custodian of the attached properties, the court-appointed administrator or the official receiver shall pay over to the bank, after deducting expenses for administration and taxes, any income from the properties mortgaged in its favour, until satisfaction of its claims.

4. In ordering the sale or assignment of the property, the court shall provide for purchasers or assignees who do not intend to avail themselves of the right to assume the loan contract provided for in paragraph 5 to pay directly to the bank the part of the purchase price corresponding to the bank's total claims and shall set the time limit for such payment. Purchasers or assignees who do not effect payment within the time limit established shall be considered in default pursuant to Article 587 of the Code of Civil Procedure.

5. Purchasers or assignees may, without authorization by the court, assume the loan contract signed by the divested debtor, assuming all the obligations related thereto, provided that within fifteen days of the date of the decree provided for in Article 574 of the Code of Civil Procedure or of the date of the purchase or assignment they pay all the instalments due, accessory costs and expenses to the bank. Where the sale is in more than one lot, each purchaser or assignee shall pay the instalments due, accessory costs and expenses on a pro rata basis.

6. The transfer of the attached property and the assumption of the loan under paragraph 5 shall continue to be subject to issue of the decree provided for in Article 586 of the Code of Civil Procedure.

Article 42 (Notion of public works credit)

1. Public works credit shall have as its object the granting of loans by banks to public or private persons for the construction of public works or plants of public utility.

2. Where loans are granted to private persons, the public work or public utility requirement must be established by law or by measures adopted by a governmental authority.

3. Loans may be secured by a charge in accordance with Article 46.

4. Where loans are secured by a mortgage on real property the provisions of this Section concerning real estate loans shall apply.

Section II Agricultural and fishing credit

Article 43 (Notion)

1. Agricultural credit shall have as its object the granting of loans by banks for agricultural and livestock production and related and collateral activities.

2. Fishing credit shall have as its object the granting of loans by banks for fishing and aquaculture and related and collateral activities.

3. Related and collateral activities shall include agritourism and the preparation, preservation, processing, marketing and promotion of products, as well as other activities specified by the Credit Committee.

4. Agricultural and fishing credit may be granted by way of agricultural bills and fishing bills respectively. Such bills must state the purpose of the loan, the security provided and the location of the project financed. Agricultural bills and fishing bills shall be equivalent to ordinary bills for all legal purposes.

Article 44 (Security)

1. Agricultural and fishing loans, including those at short term, may be secured by a charge in accordance with Article 46.

2. Short and medium-term agricultural and fishing loans shall be secured by a legal charge on the following movable property of the borrower undertaking: a) crops, finished goods or work in progress; b) livestock, commodities, inventory, raw materials, machinery, equipment or other goods acquired with the proceeds of the loan; c) receivables, including future receivables, deriving from the sale of the goods referred to in subparagraphs a) and b).

3. The legal charge shall have a priority immediately following that of the property income tax credits referred to in subparagraph 2 of Article 2778 of the Civil Code.

4. In the event of default the magistrate of the jurisdiction in which the property encumbered by the charges referred to in paragraphs 1 and 2 is located may, at the request of the creditor bank and after acquiring summary information, order its seizure and sale. The sale shall be effected in accordance with Article 1515 of the Civil Code.

5. Where agricultural or fishing loans are secured by mortgages on real property, the provisions of Section I of this Chapter concerning real estate loans shall apply.

[Repealed] Article 45 Section III Other operations

Article 46 (Loans to undertakings: charges)

1. The granting of medium and long-term loans by banks to undertakings may be secured by a special charge on movable property employed in the business that is not recorded in public registers. The charge may be imposed on: a) existing or future plants or works, licences or capital goods; b) raw materials, work in progress, inventory, finished products, crops, livestock or commodities; c) any goods acquired with the proceeds of the loan; d) receivables, including future receivables, deriving from the sale of goods referred to in the preceding subparagraphs.

2. The charge, on pain of nullity, must be reduced to writing. The writing must specify the encumbered goods or receivables, the creditor bank, the debtor and the person granting the charge, the amount and the conditions of the loan as well as the amount of the charge.

3. The validity of the charge on the goods as against third parties shall be subject to transcription of the writing in which the charge appears in the register referred to in Article 1524, second paragraph, of the Civil Code. Transcription must be effected in the competent offices of the place where the borrower has its head office or resides.

4. The charge provided for in this Article shall have the priority indicated in Article 2777, last paragraph, of the Civil Code and shall not prejudice other rights of preference of equal priority with a date certain prior to that of the transcription.

5. Without prejudice to the provisions of Article 1153 of the Civil Code, the charge may also be enforced against third parties who have acquired rights in the encumbered goods after the transcription referred to in paragraph 3. Where it is not possible to enforce the charge against a third- party buyer, the charge shall be transferred to the consideration received.

6. Notary fees shall be reduced by one half.

Article 47 (Supported loans and management of public funds)

1. All banks may grant loans or provide services specified in laws on incentives in force at the time, provided they are governed by a contract with the competent governmental authority and are included among the activities in which they may engage on an ordinary basis. The provisions of laws providing for incentives, including those regarding taxes, duties and preferential procedures, shall apply in full to such loans.

2. The assignment and management of public funds for loan support under the laws in force at the time and the provision of services inherent therein shall be governed by contracts between the competent governmental authority and the banks it has chosen. The contracts shall indicate criteria and methods for resolving conflicts of interest between the management of such funds and the banks' activities for own account; for this purpose, banks may set up separate bodies to adopt resolutions concerning supported loans and keep separate accounts. The contracts shall also establish the fees and reimbursements to which banks shall be entitled.

3. The contracts referred to in paragraph 2 may require the bank chosen to manage a public fund for loan support to enter into agreements with other banks to regulate the granting of interest rate support to be paid out of the fund in connection with loans disbursed by such banks. The latter contracts shall be approved by the competent governmental authority.

Article 48 (Pledge loans)

1. Banks may take up the business of granting loans secured by movables governed by Law 745 of 10 May 1938 and by Royal Decree 1279 of 25 May 1939, provided they create the necessary structures and give notice thereof to the Bank of Italy.

Chapter VII Bankers' drafts and injunctive remedy

Article 49 (Bankers' drafts)

1. The Bank of Italy shall authorize banks to issue bankers' drafts and other similar or equivalent drafts. The authorization order shall be published in the Gazzetta Ufficiale della Repubblica italiana.

2. The Bank of Italy, in compliance with the resolutions of the Credit Committee, shall establish the amount, form and manner of payment of the deposits which issuing banks are required to make with the Bank of Italy in connection with drafts referred to in paragraph 1.

Article 50 (Injunctive remedy)

1. The Bank of Italy and banks may also request the injunctive remedy provided for in Article 633 of the Code of Civil Procedure on the basis of a statement of account certified to be in conformity with the accounting records by a manager of the applicant bank, who shall also declare that the credit is true and certain.

TITLE III SUPERVISION

Chapter I Supervision of banks

Article 51 (Reporting requirements)

1. Banks shall send the Bank of Italy periodic returns, as well as any other figures or documents it may request, in the manner and within the time limits it establishes. They shall also transmit financial statements in the manner and within the time limits established by the Bank of Italy.

Article 52 (Notifications by boards of statutory auditors and persons appointed to audit the accounts)

1. Boards of statutory auditors shall inform the Bank of Italy without delay of every act or fact they come to know of in the performance of their duties that may constitute an irregularity in the management of banks or a violation of the provisions governing banking. To this end, the bylaws of banks, regardless of the administrative and control system adopted, shall assign the body responsible for control functions the necessary duties and powers.

2. Persons appointed to audit or check the accounts of banks shall notify the Bank of Italy without delay of acts or facts found in the performance of the engagement that may constitute a serious violation of the provisions governing banking, jeopardize the continued existence of the undertaking or result in an adverse or a qualified opinion on the annual accounts or a disclaimer. Such persons shall send the Bank of Italy any other information or documents requested.

2-bis. The bylaws of banche di credito cooperativo may assign the task of checking the accounts to the board of statutory auditors.

3. Paragraph 1, first sentencence, and paragraph 2 shall also apply to persons who perform the duties referred to therein at companies that control or are controlled by banks within the meaning of Article 23.

4. The Bank of Italy shall establish procedures and time limits for transmitting the information referred to in paragraphs 1 and 2.

Article 53 (Regulatory powers)

1. The Bank of Italy, in compliance with the resolutions of the Credit Committee, shall issue general regulations concerning: a) capital adequacy; b) the limitation of risk in its various forms; c) permissible holdings; d) administrative and accounting procedures and internal control mechanisms; d-bis) disclosure concerning the matters referred to in subparagraphs a) to d).

2. The regulations issued pursuant to paragraph 1 may provide that certain transactions shall be subject to authorization by the Bank of Italy.

2-bis. The regulations issued pursuant to paragraph 1, subparagraph a) shall permit banks to use: a) credit risk assessments issued by external companies or entities. The regulations shall specify the requirements, including those regarding technical qualifications and independence, that such persons must meet and the related verification procedures; b) internal risk measurement systems for calculating capital requirements, subject to authorization by the Bank of Italy. For banks subject to supervision on a consolidated basis by an authority of another member state, that authority shall be the competent authority for the decision in the absence of the adoption of a joint decision with the Bank of Italy within six months of the submission of the application for authorisation.

2-ter. External companies or entities that, also managing bank information systems, issue banks with credit risk assessments or develop statistical models to be used for the purposes referred to in paragraph 1, subparagraph a), shall store for this exclusive purpose, including by way of derogation from the provisions of other applicable regulations, legitimately held personal information for a historical observation period appropriate to the requirements of the regulations issued pursuant to paragraph 2-bis. The implementation procedures and criteria that ensure non-identifiability shall be specified with the assent of the Garante per la protezione dei dati personali.

3. The Bank of Italy may: a) convene the directors, members of the board of statutory auditors and managers of a bank to examine its situation; b) order the convening of the governing bodies of a bank, set the agenda for the meeting and propose the adoption of certain decisions; c) proceed directly to convene the governing bodies of a bank where the competent bodies have not complied with an order issued under subparagraph b); d) adopt specific measures regarding individual banks concerning all the matters referred to in paragraph 1, where the situation so requires, including with regard to restrictions on operations or the structure of their networks, as well as prohibitions on carrying out certain transactions, including corporate operations, or on distributing profits or other elements of capital.

4. The Bank of Italy, in compliance with the resolutions of the Credit Committee, shall issue regulations establishing conditions and limits on the acquisition of risk assets by banks in respect of persons in a position to exercise directly or indirectly an influence over the management of the bank or the banking group or persons that are connected with them. Where such a conflict of interest should exist, the Bank of Italy may establish specific conditions and limits on the acquisition of risk assets.

4-bis. [Repealed]

4-ter. The Bank of Italy shall specify the cases in which failure to comply with the conditions referred to in paragraph 4 shall result in the suspension of the administrative rights attaching to the holding.

4-quater. The Bank of Italy, in compliance with the resolutions of the Credit Committee, shall regulate conflicts of interest between banks and the persons referred to in paragraph 4 relative to other types of financial relationship.

Article 54 (Inspections)

1. The Bank of Italy may carry out inspections of banks and require them to exhibit the documents and records it deems necessary.

2. The Bank of Italy may request the competent authorities of a member state to carry out on-the-spot verifications of branches of Italian banks established within the territory of such state or agree on other methods of verification.

3. The competent authorities of a member state, after notifying the Bank of Italy, may, directly or by way of persons engaged by them, inspect the branches established in Italy of banks which they have authorized. Where the competent authorities of a member state so request, the Bank of Italy may directly carry out on-the-spot verifications or agree on other methods of verification.

4. Subject to reciprocity, the Bank of Italy may conclude agreements with the competent authorities of non-member states on procedures for the inspection of branches of banks established in their respective territories.

5. The Bank of Italy shall give notice to Consob of notifications received pursuant to paragraph 3.

Article 55 (Controls on Italian branches of EC banks)

1. The Bank of Italy, in compliance with the resolutions of the Credit Committee, shall carry out controls on Italian branches of EC banks.

Article 56 (Amendments to bylaws)

1. The Bank of Italy shall verify that amendments to the bylaws of banks do not conflict with their sound and prudent management.

2. Procedures for entry in the Company Register may not be initiated in the absence of the verification referred to in paragraph 1.

Article 57 (Mergers and divisions)

1. The Bank of Italy shall authorize mergers and divisions involving banks where they are not in conflict with the principle of sound and prudent management. The application of the provisions of Legislative Decree 356 of 20 November 1990 shall be unaffected.

2. Entry in the Company Register of a planned merger or division and the resolutions of the general meeting making changes to such plans may not take place in the absence of the authorization referred to in paragraph 1.

3. The time limit established by Article 2503, first paragraph, of the Civil Code shall be reduced to fifteen days.

4. Charges and guarantees of whatever kind, by whomever granted or however existing in favour of banks absorbed by other banks, banks involved in mergers resulting in the formation of new banks or banks involved in divisions shall maintain their validity and their priority, without the need for any formality or recording, in favour, respectively, of the absorbing bank, the bank resulting from the merger or the bank benefiting from the transfer by division.

Article 58 (Assignment of legal relationships)

1. The Bank of Italy shall issue instructions for the assignment to banks of businesses, parts of businesses, goods and legal relationships identifiable en bloc. The instructions may provide for transactions of major importance to be subject to authorization by the Bank of Italy.

2. The assignee bank shall give notice of the effected assignment by way of entry in the Company Register and publication in the Gazzetta Ufficiale della Repubblica italiana. The Bank of Italy may establish additional forms of publication.

3. Charges and guarantees of whatever kind, by whomsoever granted or however existing in favour of the assignor, and transcriptions in public registers of purchases of assets involved in financial leasing included in the assignment shall maintain their validity and their priority in favour of the assignee without the need for any formality or recording. Special rules established for assigned claims, including those regarding legal proceedings, shall also remain applicable.

4. For assigned debtors, publication pursuant to paragraph 2 shall have the effects referred to in Article 1264 of the Civil Code.

5. Within three months of publication pursuant to paragraph 2, assigned creditors may demand performance by the assignor or the assignee of the assigned obligations. Once the three months have expired the assignee shall be solely responsible.

6. Parties to assigned contracts may withdraw from the contract within three months of publication pursuant to paragraph 2, for good cause; in such cases the responsibility of the assignor shall be unaffected.

7. The provisions of this Article shall also apply to assignments in favour of persons, other than banks, included within the scope of consolidated supervision pursuant to Article 65 and in favour of financial intermediaries entered in the special register provided for in Article 107.

Chapter II Supervision on a consolidated basis

Article 59 (Definitions)

1. For the purposes of this Chapter: a) control shall exist in the cases established by Article 2359, first and second paragraphs, of the Civil Code. Article 23, paragraph 2, shall apply; b) “financial companies” shall mean companies which engage exclusively or primarily in: the activity of acquiring holdings having the characteristics established by the Bank of Italy in compliance with the resolutions of the Credit Committee; one or more of the activities referred to in Article 1, paragraph 2(f), subparagraphs 2 to 12; other financial activities established pursuant to subparagraph 15 of paragraph 2(f); the activities referred to in Article 1, paragraph 1, subparagraph n), of Legislative Decree 58 of 24 February 1998; c) “instrumental companies” shall mean companies which engage exclusively or primarily in activities of an auxiliary nature with respect to the business of the companies belonging to the group, including the ownership and management of real estate, and the management of data processing and other services.

1-bis). The provisions of this Chapter concerning banks shall also apply to electronic money institutions.

Section I Banking groups

Article 60 (Composition)

1. A banking group shall be composed of either of the following: a) an Italian parent bank and the banking, financial and instrumental companies it controls; b) an Italian parent financial company and the banking, financial and instrumental companies it controls, where such companies include at least one bank and the banking and financial companies are of decisive importance, as established by the Bank of Italy in compliance with the resolutions of the Credit Committee.

Article 61 (Parent undertaking)

1. The parent undertaking shall be the Italian bank or the financial company having its registered office in Italy which controls the component companies of the banking group and which is not, in turn, controlled by another Italian bank or by another financial company having its registered office in Italy which can be considered a parent undertaking.

2. [Repealed]

3. Without prejudice to specific provisions governing banking, the parent undertaking shall be subject to the supervisory controls provided for in this Chapter. The Bank of Italy shall verify that the bylaws of the parent undertaking and amendments thereto are not in conflict with sound and prudent management of the group.

4. The parent undertaking, in carrying out its activity of management and coordination, shall issue rules to the components of the group for the implementation of the instructions issued by the Bank of Italy in the interest of the stability of the group. The directors of the companies belonging to the group shall supply all figures and information needed for the issue of such rules and shall cooperate in complying with the provisions on consolidated supervision.

5. Article 52 shall apply to a parent financial company.

Article 62 (Experience, integrity and independence requirements)

1. The provisions concerning the experience, integrity and independence requirements for persons performing administrative, managerial or control functions in banks shall apply to persons performing such functions in parent financial companies.

Article 63 (Holdings of capital)

1. The provisions of Title II, Chapters III and IV shall apply to parent financial companies.

2. With respect to other companies belonging to the group and the owners of holdings in such companies, the Bank of Italy shall have the powers referred to in Article 21.

Article 64 (Register)

1. Banking groups shall be entered in a register kept by the Bank of Italy.

2. The parent undertaking shall notify the Bank of Italy of the existence of the banking group and of changes in its composition.

3. The Bank of Italy may proceed on its own authority to verify the existence of a banking group and enter it in the register and may establish a composition of the group different from that notified by the parent undertaking.

4. Companies belonging to the group shall indicate in their documents and correspondence that they are included in the register.

5. The Bank of Italy shall issue regulations concerning the keeping and updating of the register. Section II Scope and performance of supervision

Article 65 (Persons included within the scope of consolidated supervision)

1. The Bank of Italy shall carry out supervision on a consolidated basis with respect to the following persons: a) companies belonging to a banking group; b) banking, financial and instrumental companies at least 20 per cent of whose capital is held by companies belonging to a banking group or by an individual bank; c) banking, financial and instrumental companies not included in a banking group but controlled by a natural or legal person who controls a banking group or an individual bank; d) [Repealed] e) [Repealed] f) [Repealed] g) [Repealed] h) companies which, without prejudice to the provisions of Article 19, paragraph 6, control at least one bank; i) companies other than banking, financial and instrumental companies where they are controlled by an individual bank or where companies belonging to a banking group or persons referred to in subparagraph h) hold, jointly or otherwise, a controlling interest.

2. The application to persons included within the scope of consolidated supervision of specific provisions concerning controls and supervision in force at the time shall be unaffected.

Article 66 (Reporting requirements)

1. For the purpose of carrying out supervision on a consolidated basis, the Bank of Italy shall require persons referred to in subparagraphs a) to c) of paragraph 1 of Article 65 to transmit reports, figures and any other relevant information on a periodic or other basis. The Bank of Italy may also require the persons referred to in subparagraphs h) and i) of paragraph 1 of Article 65 to provide the information needed to carry out supervision on a consolidated basis.

2. The Bank of Italy shall establish the manner and time limits for the transmission of the reports, figures and information referred to in paragraph 1.

3. The Bank of Italy may require the application to the persons referred to in subparagraphs a) to c) of paragraph 1 of Article 65 of the provisions of Part IV, Title III, Chapter II, Section VI of Legislative Decree 58 of 24 February 1998.

4. Companies referred to in Article 65 shall provide the parent undertaking or individual bank with the reports, figures and information needed to carry out consolidated supervision.

5. Companies having their registered office in Italy which are included within the scope of supervision on a consolidated basis by the competent supervisory authorities of other member states shall provide the persons specified by such authorities with the information needed to carry out consolidated supervision.

Article 67 (Regulatory powers)

1. For the purpose of carrying out consolidated supervision, the Bank of Italy, in compliance with the resolutions of the Credit Committee, shall, by way of general or specific regulations, issue instructions to the parent undertaking concerning the banking group as a whole or its components with regard to: a) capital adequacy; b) the limitation of risk in its various forms; c) permissible holdings; d) administrative and accounting procedures and internal control mechanisms; e) disclosure concerning the matters referred to in this paragraph.

2. The regulations issued pursuant to paragraph 1 may provide for certain transactions to be subject to authorization by the Bank of Italy.

2-bis. The regulations issued pursuant to paragraph 1, subparagraph a) shall permit the use of: a) credit risk assessments issued by external companies or entities. The regulations shall specify the requirements that such persons must meet and the related procedures for verification by the Bank of Italy; b) internal risk measurement systems for calculating capital requirements, subject to authorization by the Bank of Italy. For groups subject to supervision on a consolidated basis by an authority of another member state, that authority shall be the competent authority for the decision in the absence of the adoption of a joint decision with the Bank of Italy within six months of the submission of the application for authorisation.

2-ter. The specific measures adopted pursuant to paragraph 1 may also regard restrictions on the group’s operations or the structure of its network, as well as prohibitions on carrying out certain transactions or on distributing profits or other elements of capital.

3. The regulations issued by the Bank of Italy for the carrying out of supervision on a consolidated basis may take account, also with reference to an individual bank, of the situation and activities of persons referred to in subparagraphs b) and c) of paragraph 1 of Article 65.

3-bis. The Bank of Italy may also issue instructions pursuant to this Article to one or more components of the banking group.

Article 68 (Inspections)

1. For the purposes of supervision on a consolidated basis, the Bank of Italy may carry out inspections of persons referred to in Article 65 and require them to exhibit the documents and records it deems necessary. Inspections of companies other than banking, financial and instrumental companies shall be for the exclusive purpose of verifying the accuracy of figures and information provided for the consolidation.

2. The Bank of Italy may request the competent authorities of a member state to carry out on-the-spot verifications of persons referred to in paragraph 1 established within the territory of such state or agree on other methods of verification.

3. The Bank of Italy, upon request of the competent authorities of other member or non-member states may carry out inspections of companies having their registered office in Italy which are included within the scope of supervision on a consolidated basis by the requesting supervisory authorities. The Bank of Italy may allow the verifications to be carried out by the requesting authorities, an auditor or an expert. Where the requesting supervisory authorities do not carry out the verification directly, they may take part if they so wish.

3-bis. The Bank of Italy may permit the competent authorities of other member states to participate, with regard to the matters of interest to them, in inspections of a parent undertaking pursuant to Article 61 where the parent undertaking has subsidiaries subject to the supervision of such authorities.

Article 69 (Cooperation between authorities and notification requirements)

1. The Bank of Italy shall establish, including by way of agreements with the supervisory authorities of other member states, forms of cooperation and coordination and the allocation of specific tasks to each authority with regard to the application of supervision on a consolidated basis to groups operating in more than one country.

1-bis. By effect of the agreements referred to in paragraph 1, the Bank of Italy may also exercise supervision on a consolidated basis over: a) financial companies having their registered office in another member state which control an Italian parent undertaking or individual bank; b) banking, financial and instrumental companies controlled by persons referred to in subparagraph a); c) banking, financial and instrumental companies at least 20 per cent of whose capital is held, jointly or otherwise, by persons referred to in subparagraphs a) and b).

1-ter. Where, during the exercise of supervision on a consolidated basis, the Bank of Italy should identify an emergency situation which potentially jeopardizes the stability of the financial system of Italy or another member state in which the banking group operates, it shall promptly alert the Ministry for the Economy and Finance and, in the case of a group that also operates in other member states, the competent monetary authorities.

TITLE IV CRISIS PROCEDURES

Chapter I Banks Section I Special administration

Article 70 (The decree)

1. The Minister for the Economy and Finance, acting on a proposal from the Bank of Italy, may issue a decree dissolving the administrative and control bodies of a bank where: a) serious administrative irregularities or serious violations of laws, regulations or bylaws governing the bank's activity are found; b) serious capital losses are expected; c) the dissolution has been the object of a reasoned request by the administrative bodies or an extraordinary general meeting.

2. The functions of the general meetings and other governing bodies different from those specified in paragraph 1 shall be suspended by effect of the special administration decree, except as provided for in Article 72, paragraph 6.

3. The decree of the Minister for the Economy and Finance and the proposal of the Bank of Italy shall be notified by the special administrators to interested parties upon request, but not before their installation pursuant to Article 73.

4. The decree of the Minister for the Economy and Finance shall be published in abridged form in the Gazzetta Ufficiale della Repubblica italiana.

5. Special administration shall last for one year from the date of issue of the decree provided for in paragraph 1, unless the decree establishes a shorter period or the Bank of Italy authorizes early closure. In exceptional cases the procedure may be extended by the same process as specified in paragraph 1 for a period of up to six months; the provisions of paragraphs 3 and 4 shall apply insofar as they are compatible.

6. The Bank of Italy may extend the time limit of the procedure by up to two months, even if it has been extended pursuant to paragraph 5, for the acts related to the closure of the procedure, provided the manner of their performance has already been approved by the Bank of Italy.

7. Neither Title IV of the Bankruptcy Law nor Article 2409 of the Civil Code shall apply to banks. Where there is a well-founded suspicion that persons with administrative functions have, in violation of their duties, committed serious management irregularities that could cause injury to the bank or to one or more subsidiaries, the control body or the members authorized by the Civil Code to file a complaint with the courts may file a complaint with the Bank of Italy, which shall issue a reasoned decision.

Article 71 (Bodies responsible for the procedure)

1. Within fifteen days of the date of the decree referred to in Article 70, paragraph 1, the Bank of Italy shall issue an order appointing: a) one or more special administrators; b) an oversight committee composed of between three and five members, which shall appoint its own chairman by majority vote.

2. The Bank of Italy's order and the resolution of the oversight committee appointing its chairman shall be published in abridged form in the Gazzetta Ufficiale della Repubblica italiana. Within fifteen days of receipt of notice of their appointment the special administrators shall deposit a copy of the order appointing the bodies responsible for the procedure and of the resolution appointing the chairman of the oversight committee for entry in the Company Register.

3. The Bank of Italy may remove or replace the special administrators and the members of the oversight committee.

4. The emoluments due to the special administrators and the members of the oversight committee shall be determined by the Bank of Italy in accordance with criteria it establishes and shall be charged to the bank subjected to the procedure.

5. The Bank of Italy, pending instalment of the special bodies, may appoint one of its own officers as provisional administrator, who shall have the same powers as special administrators. Article 70, paragraph 3, and Article 72, paragraph 9, shall apply.

6. The integrity requirements established pursuant to Article 26 shall apply to the bodies responsible for the procedure.

Article 72 (Powers and functioning of the special bodies)

1. The special administrators shall perform the administrative functions and exercise the administrative powers of the bank. They shall ascertain the bank's situation, eliminate irregularities and promote solutions that are in the interest of the depositors. The provisions of the Civil Code, bylaws or contract regarding the powers of control of the owners of holdings shall not apply to the acts of the special administrators. Where the decisions of the special administrators are challenged, members may not ask the court to suspend execution of decisions of the special administrators that are subject to authorization or in any case implement measures of the Bank of Italy. In the performance of their functions the special administrators shall be public officials.

2. The oversight committee shall exercise control functions and shall give opinions to the special administrators in the cases provided for in this Section or in the directions of the Bank of Italy.

3. The functions of the special bodies shall commence with their installation pursuant to Article 73, paragraphs 1 and 2, and shall cease with their handing the bank over to the bodies that succeed them.

4. The Bank of Italy, by way of instructions to the special administrators or to the members of the oversight committee, may establish special safeguards and limitations on the management of the bank. The members of the special bodies shall be personally responsible for failure to observe the directions of the Bank of Italy; third parties without knowledge of the Bank's directions shall not be prejudiced.

5. Legal action for liability that may be initiated by the general meeting against members of the dissolved administrative and control bodies and the general manager, as well as action against the person appointed to control or audit the accounts shall be brought by the special administrators after consulting the oversight committee, subject to authorization by the Bank of Italy. The bodies that succeed the special administrators shall carry on the legal actions and shall report on their progress to the Bank of Italy.

5-bis. In the interest of the procedure, the special administrators, having consulted the oversight committee and subject to authorization by the Bank of Italy, may replace the person appointed to control the accounts for the duration of the procedure.

6. The special administrators, subject to authorization by the Bank of Italy, may convene the general meetings and other governing bodies referred to in Article 70, paragraph 2. The agenda shall be established exclusively by the special administrators and may not be modified by the governing body convened.

7. Where more than one special administrator is appointed, such administrators shall decide by majority vote of those in office and their powers of representation shall be validly exercised upon the joint signature of any two of them. The possibility of delegating authority to one or more special administrators for all or some categories of operation shall be unaffected.

8. Resolutions of the oversight committee shall be adopted by majority vote of the members in office; where there is a tie the vote of the chairman shall decide.

9. Civil actions against the special administrators and members of the oversight committee for acts performed in the conduct of their official duties shall be brought subject to authorization by the Bank of Italy.

Article 73 (Initial duties)

1. The special administrators shall install themselves by taking over the bank from the dissolved administrative bodies with a summary procès- verbal. The special administrators shall acquire a set of accounts. At least one member of the oversight committee shall be present during these operations.

2. Where the absence of the dissolved administrative bodies or any other reason precludes the handing over of the bank, the special administrators shall install themselves on their own authority with the assistance of a notary and, where necessary, of law-enforcement authorities.

3. The provisional administrator shall take charge of the management of the bank and hand over the bank to the special administrators in the manner provided for in paragraphs 1 and 2.

4. Where the financial statements for the accounting period ended prior to the beginning of special administration have not been approved, the special administrators shall file with the office of the Company Register, in place of the financial statements, a report on the bank's assets and liabilities and profits and losses, prepared on the basis of the information available. The report shall be accompanied by a report of the oversight committee. In no case shall profits be distributed.

Article 74 (Suspension of payments)

1. In exceptional circumstances the special administrators, in order to protect the interests of creditors, may suspend payment of the bank's liabilities of whatever kind and the restitution to customers of financial instruments connected with services referred to in the legislative decree transposing Directive 93/22/EEC.1 The measure shall be adopted after consulting the oversight committee and subject to authorization by the Bank of Italy, which may issue directions for its implementation. The suspension shall be for a period of up to one month, which may be extended in the same manner for an additional two months.

2. During the suspension period forced executions or actions to perfect security interests involving the bank's properties or customers' securities may not be initiated or prosecuted. During the same period mortgages may not be registered on the bank's immovable property nor may any other rights of preference on the bank's movable property be acquired, except in the case of enforceable court orders issued prior to the beginning of the suspension period. The provisions transposing Directive 93/22/EEC on investment services in the securities field are currently incorporated in Legislative Decree 58 of 24 February 1998. Directive 93/22/EEC was repealed by Directive 2004/39/EC of 21 April 2004 on markets in financial instruments, which the member states are required to implement by 31 January 2007. The regulations adopted in implementation of the Directive shall apply as from 1 November 2007 (see Article 70 of Directive 2004/39/EC, as amended by Article 1 of Directive 2006/31/EC).

3. The suspension shall not constitute insolvency.

Article 75 (Final duties)

1. At the end of the procedure the special administrators and the oversight committee shall prepare separate reports and transmit them to the Bank of Italy. The Bank of Italy shall arrange for the closure of special administration to be made public by way of a notice in the Gazzetta Ufficiale della Repubblica italiana.

2. The closure of the accounting period in progress at the start of special administration shall be delayed for all legal purposes until the end of the procedure. The special administrators shall draw up the financial statements which shall be submitted to the Bank of Italy for its approval within four months of the closure of the procedure and published as required by law. The accounting period to which the financial statements drawn up by the special administrators refer shall constitute a single tax period. Within one month of approval by the Bank of Italy the bodies that succeed the special administrators shall file the income tax return relative to such period in accordance with the tax laws in force at the time.

3. The special administrators, before ceasing their functions, shall provide for the reconstitution of the bank's ordinary governing bodies. The succeeding bodies shall take over the bank from the special administrators in the manner provided for in Article 73, paragraph 1.

Article 76 (Provisional management)

1. Without prejudice to what is established by the preceding Articles, in the cases specified in Article 70, paragraph 1, and as a matter of urgency the Bank of Italy may provide for one or more administrators to take on the administrative powers of the bank. During such time the functions of the administrative and control bodies shall be suspended. Officers of the Bank of Italy may be appointed as administrators. In the performance of their functions the administrators shall be public officials.

2. Provisional management may not last for more than two months. Article 71, paragraphs 2, 3, 4 and 6, Article 72, paragraphs 3, 4, 7 and 9, Article 73, paragraphs 1 and 2, Article 74 and Article 75, paragraph 1, shall apply insofar as they are compatible.

3. Where the administrative and control bodies are dissolved pursuant to Article 70, paragraph 1, during provisional management, the administrators referred to in paragraph 1 shall have the same powers as those conferred on the provisional administrator provided for in Article 71, paragraph 5.

4. At the end of provisional management the succeeding bodies shall take over the bank from the administrators referred to in paragraph 1 in the manner provided for in Article 73, paragraph 1.

Article 77 (Branches of non-EC banks)

1. In the case of special administration of branches of non-EC banks established in Italy, the special administrators and the oversight committee shall assume the powers of the administrative and control bodies of the parent bank with regard to such branches.

1-bis. The Bank of Italy shall notify the supervisory authorities of member states hosting branches of the non-EC banks of the start of the special administration procedure. The notification shall be made, using any means, before the start of the procedure, where possible, or immediately thereafter.

2. The provisions of this Section shall apply insofar as they are compatible.

Section II Special measures

Article 78 (Banks authorized in Italy)

1. The Bank of Italy may prohibit banks authorized in Italy from undertaking new transactions or order the closure of branches for violation of laws, regulations or bylaws governing their activities, for management irregularities or, in the case of branches of non-EC banks, for insufficiency of funds.

Article 79 (EC banks)

1. In the case of violations by EC banks of the rules concerning branches or the provision of services within Italy, the Bank of Italy may order the bank to put an end to such irregularities and shall inform the competent authorities of the member state in which the bank has its registered office so that any necessary measures may be taken.

2. Where the competent authorities take no measures or measures that prove inadequate, where the irregularities committed could jeopardize the general good, or where it is a matter of urgency to protect the interests of depositors, investors and others to whom services are provided, the Bank of Italy shall adopt the necessary measures, including the prohibition of new transactions and the closure of the branch and shall give notice to the competent authorities of such measures.

Section III Compulsory administrative liquidation

Article 80 (The decree)

1. The Minister for the Economy and Finance, acting on a proposal from the Bank of Italy, may issue a decree revoking authorization to engage in banking and ordering the compulsory administrative liquidation of banks, even where special administration is in effect, or liquidation under the ordinary rules, where the administrative irregularities or the violations of laws, regulations or bylaws or the losses referred to in Article 70 are exceptionally serious.

2. Compulsory liquidation may be ordered in the manner provided for in paragraph 1 upon a reasoned request by the administrative bodies, the extraordinary general meeting, the special administrators or the liquidators.

3. The decree of the Minister for the Economy and Finance and the proposal of the Bank of Italy shall be notified by the liquidators to interested parties upon request, but not before their installation pursuant to Article 85.

4. The decree of the Minister for the Economy and Finance shall be published in abridged form in the Gazzetta Ufficiale della Repubblica italiana.

5. From the date of issue of the decree the functions of the administrative and control bodies, general meetings and every other governing body of the bank shall cease. The provisions of Article 93, paragraph 1, and Article 94, paragraph 2, shall be unaffected.

6. Banks shall not be subject to insolvency proceedings other than compulsory liquidation as provided for in this Section; for matters not expressly provided for herein, the provisions of the Bankruptcy Law shall apply insofar as they are compatible.

Article 81 (Bodies responsible for the procedure)

1. The Bank of Italy shall appoint: a) one or more liquidators; b) an oversight committee composed of between three and five members, which shall appoint its own chairman by majority vote.

2. The Bank of Italy's order and the resolution of the oversight committee appointing its chairman shall be published in abridged form in the Gazzetta Ufficiale della Repubblica italiana. Within fifteen days of receipt of notice of their appointment the liquidators shall deposit a copy of the instruments appointing the bodies responsible for the compulsory liquidation procedure and the chairman of the oversight committee for entry in the Company Register.

3. The Bank of Italy may remove or replace the liquidators and the members of the oversight committee.

4. The emoluments due to the liquidators and the members of the oversight committee shall be determined by the Bank of Italy in accordance with the criteria it establishes and shall be charged to the liquidation.

Article 82 (Judicial finding of insolvency)

1. Where a bank not subject to compulsory administrative liquidation is insolvent, the court of the place where the bank has its registered office, upon request by one or more creditors, upon petition of the public prosecutor or on its own authority, shall declare insolvency by way of a ruling in camera after consulting the Bank of Italy and the legal representatives of the bank. Where the bank is under special administration, the court may also declare insolvency upon petition of the special administrators after consulting the special administrators, the Bank of Italy and the superseded legal representatives of the bank. The provisions of the first paragraph, second sentence, and of the third, fourth, fifth, sixth and eighth paragraphs of Article 195 of the Bankruptcy Law shall apply.

2. Where a bank, even if it is of a public nature, is insolvent at the time a compulsory administrative liquidation decree is issued and insolvency has not been declared under paragraph 1, the court of the place where the bank has its registered office, upon petition of the liquidators or of the public prosecutor or on its own authority, shall issue a finding of insolvency by way of a ruling in camera after consulting the Bank of Italy and the superseded legal representatives of the bank. The provisions of the third, fourth, fifth and sixth paragraphs of Article 195 of the Bankruptcy Law shall apply.

3. A judicial declaration of insolvency under the preceding paragraphs shall have the effects referred to in Article 203 of the Bankruptcy Law.

Article 83 (Effects of the decree on the bank, creditors and pre-existing legal relationships)

1. From the date of the installation of the liquidating bodies pursuant to Article 85, and in any case from the third day following the date of adoption of the compulsory administrative liquidation decree, payment of liabilities of whatever kind and the restitution of third parties' assets shall be suspended. The date of the installation of the liquidators, with specification of the day, hour and minute, shall be noted by the Bank of Italy on the basis of the procès-verbal provided for by Article 85.

2. From the time limit referred to in paragraph 1, Articles 42, 44, 45 and 66 and the provisions of Title II, Chapter III, Sections II and IV, of the Bankruptcy Law shall apply.

3. From the time limit referred to in paragraph 1, no actions against the bank in liquidation may be brought or prosecuted, except as provided for in Articles 87, 88 and 89 and paragraph 3 of Article 92, nor may forced executions or actions to perfect security interests in the bank's properties be initiated or prosecuted on any grounds. For civil actions of any kind deriving from the liquidation, the only competent court shall be the court of the place where the bank has its registered office.

Article 84 (Powers and functioning of the liquidating bodies)

1. The liquidators shall be vested with the legal representation of the bank, perform all actions pertaining to it and carry out the operations of the liquidation. In the performance of their functions the liquidators shall be public officials.

2. The oversight committee shall assist the liquidators in the performance of their functions, supervise their actions and give opinions in the cases referred to in this Section or in the directions of the Bank of Italy.

3. The Bank of Italy may issue directives concerning the implementation of the procedure and establish that some categories of operation and action shall be subject to its authorization and preliminary consultation with the oversight committee. The members of the liquidating bodies shall be personally responsible for failure to observe the directives of the Bank of Italy; third parties without knowledge of the Bank's directives shall not be prejudiced.

4. The liquidators shall present annually to the Bank of Italy a report on the bank's accounts and assets and liabilities, and on the progress of the liquidation, accompanied by a report of the oversight committee. The Bank of Italy shall establish the procedures and time limits for periodic reports to creditors on the progress of the liquidation.

5. Legal action for liability that may be initiated by the general meeting, as well as action by creditors, against members of the dissolved administrative and control bodies and the general manager, action against the person appointed to control or audit the accounts, and action by creditors against the company or other entity exercising management and coordination functions, shall be brought by the liquidators after consulting the oversight committee, subject to authorization by the Bank of Italy.

6. Article 72, paragraphs 7, 8 and 9, shall apply to the liquidators and the oversight committee.

7. In carrying out the procedure, the liquidators, subject to authorization by the Bank of Italy and with the approval of the oversight committee, may avail themselves, on their own responsibility, of the assistance of third parties, whose fees shall be charged to the liquidation. In exceptional cases the liquidators, subject to authorization by the Bank of Italy, may at their own expense delegate the performance of individual actions to third parties.

Article 85 (Initial duties)

1. The liquidators shall install themselves by taking over the bank from the dissolved administrative bodies or from the ordinary liquidating bodies with a summary procès-verbal. The liquidators shall acquire a set of accounts and shall then take the inventory.

2. Article 73, last sentence of paragraph 1 and paragraphs 2 and 4, shall apply.

Article 86 (Assessment of liabilities)

1. Within one month of their appointment the liquidators shall notify each creditor, by registered letter with acknowledgment of receipt, of the amounts payable to each as they appear in the accounting records and documents of the bank. The notice shall be understood to be given subject to reservation of the right to contest creditors' claims.

2. Similar notice shall be sent to persons appearing to hold property rights with respect to assets and financial instruments in the bank's possession connected with services referred to in Legislative Decree 58 of 24 February 1998 and to customers entitled to the restitution of such financial instruments.

3. The Bank of Italy may establish additional forms of disclosure for the purpose of making known the time limits within which creditors must submit proof of claim in accordance with paragraph 5.

4. Within fifteen days of receipt of the registered letter the creditors and holders of rights referred to in paragraph 2 may present or send, by registered mail with acknowledgment of receipt, their claims to the liquidators accompanied by supporting documentation.

5. Within sixty days of the publication of the liquidation decree in the Gazzetta Ufficiale della Repubblica italiana the creditors and holders of rights referred to in paragraph 2 who have not received notice under paragraphs 1 and 2 shall request the liquidators, by way of a registered letter with acknowledgment of receipt, to allow their claims and restore their assets, presenting documents which prove the existence, nature and extent of their rights.

6. The liquidators, within thirty days from the expiry of the limitation period referred to in paragraph 5, shall present to the Bank of Italy, after consulting the superseded directors of the bank, the list of admitted creditors and the amounts of the claims allowed for each, indicating the existence and order of rights of preference, as well as the lists of the holders of rights referred to in paragraph 2 and of the persons whose request for allowance of their claims has been denied. Customers entitled to the restitution of financial instruments connected with services referred to in Legislative Decree 58 of 24 February 1998 shall be entered in a special separate section of the statement of liabilities.

7. Within the time limit referred to in paragraph 6 the liquidators shall file the lists of preferred creditors and holders of rights referred to in paragraph 2, as well as of the persons belonging to the same categories whose request for allowance of their claims has been denied, with the clerk of the court of the place where the bank has its registered office for inspection by those having entitlement.

8. Subsequently, the liquidators, by way of a registered letter with acknowledgment of receipt, shall notify their decision without delay to those whose request for allowance of their claims has been denied in whole or in part. The filing of the statement of liabilities shall be made public by way of a notice in the Gazzetta Ufficiale della Repubblica italiana.

9. Once the acts referred to in paragraphs 6 and 7 have been completed, the statement of liabilities shall be enforceable.

Article 87 (Objections to the statement of liabilities)

1. Persons whose claims have not been allowed in whole or in part may present objections to the statement of liabilities regarding their own position and to the recognition of rights in favour of persons included in the lists referred to in Article 86, paragraph 7, within fifteen days of receipt of the registered letter referred to in Article 86, paragraph 8, and persons whose claims have been admitted may present objections within the same time limit starting from the publication of the notice referred to in Article 86, paragraph 8.

2. Objections shall be presented by filing with the clerk of the court a petition to the president of the court of the place where the bank has its registered office.

3. The president of the court shall assign all actions relating to the same liquidation to a single examining magistrate. In courts which are divided into sections, the president shall assign the actions to one section whose president shall then designate a single examining magistrate. The examining magistrate shall issue an order setting the date of a hearing at which the liquidators and parties shall appear before him, give notice of the order to the objecting party at least fifteen days prior to the date of the hearing and set a time limit within which notice of the petition and the order shall be given to the liquidators and the parties. The objecting party shall file an appearance at least five working days prior to the date of the hearing or the objection will be deemed to have been withdrawn.

4. The examining magistrate shall prepare the various actions in objection and submit them to the panel to be decided in a single judgment. However, where a number of objections are ready for decision and others require additional preparation, the magistrate shall issue an order separating the actions and submitting those that are ready for decision to the panel.

5. Where necessary to the decision of contested claims, the magistrate shall require the liquidators to exhibit an extract of the list of unsecured creditors referred to in Article 86, paragraph 6; the list shall not be filed.

Article 88 (Appeals and petitions for cassation)

1. Appeals by the parties or the liquidators from the judgment of the court may be filed within fifteen days of the date of notification of the judgment. Article 87, paragraph 4 insofar as it is compatible, and paragraph 5, shall apply to appellate proceedings.

2. The limitation period for filing petitions for cassation shall be reduced by half and shall run from the date of notification of the appellate judgment.

3. Judgments issued at each level on objections shall be enforceable where appeals may no longer be taken.

4. For matters not expressly provided for in this Article or Article 87, actions in objection shall be subject to the provisions of the Code of Civil Procedure concerning civil trials.

Article 89 (Late petitions)

1. After the filing of the statement of liabilities and until such time as all allotments and restitutions have been completed, creditors and holders of rights referred to in Article 86, paragraph 2, who have not received notice under Article 86, paragraph 8, and who have not been included in the statement of liabilities may seek to enforce their rights in accordance with Article 87, paragraphs 2 to 5, and Article 88. Such persons shall sustain the expenses caused by the delay in filing the petition unless they are not responsible for the delay.

Article 90 (Liquidation of assets)

1. The liquidators shall have all the powers necessary to realize the bank's assets.

2. The liquidators, with the favourable opinion of the oversight committee and subject to authorization by the Bank of Italy, may assign assets and liabilities, the business or parts of the business, as well as assets and legal relationships identifiable en bloc. Assignments may be effected at any stage of the procedure, including prior to the filing of the statement of liabilities; the assignee shall be responsible only for liabilities appearing in the statement of liabilities. The provisions of Article 58, paragraphs 2, 3 and 4, shall apply even where the assignee is not a bank or one of the other persons referred to in paragraph 7 thereof.

3. Where necessary and to assure the best realization of the bank's assets, the liquidators, subject to authorization by the Bank of Italy, may continue the business of the undertaking or of certain branches of activity, in accordance with the cautionary recommendations of the oversight committee. The continuation of the business of the undertaking decided at the installation of the liquidating bodies within the time limit established by Article 83, paragraph 1, excludes the dissolution by operation of law of pre- existing legal relationships that is provided for in the legislation referred to in paragraph 2 of such article.

4. Also for the purpose of paying allotments to persons having entitlement, the liquidators may contract loans, undertake other kinds of borrowing operations and offer the bank's assets as security, in accordance with the directions and cautionary recommendations of the oversight committee and subject to authorization by the Bank of Italy.

Article 91 (Restitution and allotment of assets)

1. The liquidators shall restitute assets as well as financial instruments connected with services referred to in Legislative Decree 58 of 24 February 1998 and allot the bank's liquidated assets in the order established by Article 111 of the Bankruptcy Law. Emoluments and refunds due to the bodies responsible for the special administration procedure and to the administrators of the provisional management that preceded the compulsory administrative liquidation, if any, shall be treated as equivalent to expenses referred to in Article 111, paragraph 1, subparagraph 1, of the Bankruptcy Law.

2. Where the separation of the bank's assets from those of customers entered in the special section of the statement of liabilities is respected in accordance with Article 19 of Legislative Decree 58 of 24 February 1998 but the separation by customer of the assets of such customers is not respected or the financial instruments are not sufficient to effect all the restitutions, the liquidators shall, where possible, effect restitutions in conformity with paragraph 1 pro rata according to the rights on the basis of which each customer has been admitted to the special section of the statement of liabilities or liquidate the financial instruments belonging to customers and allot the proceeds on the same pro rata basis.

3. Customers entered in the special section of the statement of liabilities shall participate with unsecured creditors in conformity with Article 111, paragraph 1, subparagraph 3 of the Bankruptcy Law, in full where the separation of the bank's assets from those of customers is not respected, and for the part of their rights not satisfied in the cases provided for in paragraph 2.

4. The liquidators, after consulting the oversight committee and subject to authorization by the Bank of Italy, may make partial allotments and restitutions to all the persons having entitlement or to certain categories of such persons, even before all the assets have been realized and all the liabilities assessed.

5. Without prejudice to the provisions of paragraphs 8, 9 and 10, the allotments and restitutions must not jeopardize the possibility of final assignment of the quotas and assets due to all the persons having entitlement.

6. In effecting allotments and restitutions where there are claims of creditors or other interested parties whose admission to the statement of liabilities has not been decided, the liquidators shall set aside the amounts and the financial instruments corresponding to the allotments and restitutions not effected to such persons for distribution or restitution to them in the event of recognition of their rights or, failing such recognition, for release to the persons having entitlement.

7. In the cases referred to in paragraph 6, the liquidators, with the favourable opinion of the oversight committee and subject to authorization by the Bank of Italy, may acquire suitable guarantees in substitution of the amounts set aside.

8. Claims and requests presented after the expiry of the limitation periods established by Article 86, paragraphs 4 and 5, shall be eligible to participate only in subsequent allotments and restitutions, if any, and to the extent allowed by the liquidators, or, after the filing of the statement of liabilities, by the judge deciding on objections presented under Article 87, paragraph 1.

9. Persons who file late proof of claim under Article 89 shall participate only in such allotments and restitutions as may be effected after the filing of the petition.

10. In the cases referred to in paragraphs 8 and 9, property rights and rights of preference shall be enforceable where the assets to which they refer have not been divested.

11. Until the financial instruments under management by the bank have been restituted or liquidated, the liquidators shall arrange for them to be managed with a view to minimizing risk.

Article 92 (Final duties)

1. Once the assets have been realized and before the last allotment to the creditors or the last restitution to customers, the liquidators shall present the closing statement of accounts of the liquidation, the statement of source and application of funds and the allotment plan, accompanied by their own report and a report by the oversight committee, to the Bank of Italy, which shall authorize the filing of the above documents with the clerk of the court. The liquidation shall constitute a single accounting period, also for tax purposes; within one month of the filing the liquidators shall present the income tax return for the period in accordance with the tax laws in force at the time.

2. The filing shall be made public by way of a notice in the Gazzetta Ufficiale della Repubblica Italiana. The Bank of Italy may establish additional forms of publication.

3. Within twenty days of publication in the Gazzetta Ufficiale della Repubblica Italiana interested parties may initiate legal actions by filing a petition with the court. The provisions of Article 87, paragraphs 2 to 5, and Article 88 shall apply.

4. Once the limitation period referred to has expired without the initiation of legal actions or once such actions have been decided by an enforceable judgment, the liquidators shall proceed with the final allotment or restitution in accordance with the provisions of Article 91.

5. Amounts and instruments which cannot be distributed shall be deposited in the manner established by the Bank of Italy for subsequent distribution to persons having entitlement without prejudice to the provisions of Article 91, paragraph 7.

6. The provisions of the Civil Code on the liquidation of corporations concerning the deletion of the company and the deposit of the statutory company books shall apply.

7. The fact that petitions and judgements are pending, including the judgement on the state of insolvency, shall not preclude performance of the final duties provided for in the preceding paragraphs and the closure of the compulsory administrative liquidation procedure. Such closure shall be subject to the setting aside of amounts or the acquisition of guarantees in accordance with Article 91, paragraphs 6 and 7.

8. After the closure of the liquidation procedure the liquidators shall maintain their legitimacy in subsequent legal proceedings in the same or higher courts. Articles 72, paragraphs 7 and 9, 81, paragraphs 3 and 4, and 84, paragraphs 1, 3 and 7 of this decree shall apply to the liquidators in the performance of the activities connected with such proceedings.

9. In the event of assignments under Article 90, paragraph 2, of this decree, the liquidators shall be excluded, at their request, from judgements concerning the legal relationships assigned if the assignee has succeeded.

Article 93 (Composition with creditors)

1. At any stage of the compulsory liquidation the liquidators, after obtaining the opinion of the oversight committee, or of the bank itself in accordance with Article 152, second paragraph, of the Bankruptcy Law, and that of the liquidating bodies, may propose a composition with creditors to the court of the place where the undertaking has its registered office. The proposed composition must be authorized by the Bank of Italy.

2. The proposed composition must indicate the percentage to be offered to unsecured creditors, the time of payment and any guarantees.

3. The obligation to pay the quotas indicated in the composition may be assumed by third parties with the total or partial release of the debtor bank. In such case, actions by the creditors for the execution of the composition may be brought only against the assignees within the limits of their respective quotas.

4. The proposed composition and the opinion of the liquidating bodies shall be filed with the clerk of the court. The Bank of Italy may establish other forms of publication.

5. Within thirty days of the filing interested parties may present objections by filing a petition with the clerk of the court, notice of which shall be given to the liquidator.

6. The court shall decide with a judgment in camera on the proposed composition, taking account of the objections and of the opinion on the latter rendered by the Bank of Italy. The judgment shall be made public by way of filing with the clerk of the court and by other means established by the court. Notice of the filing shall be given in writing to the liquidators and to objecting parties by the clerk of the court. Article 88, paragraph 1, first sentence, and paragraphs 2, 3 and 4, shall apply.

7. During the composition procedure the liquidators may effect partial distribution of assets as provided for in Article 91.

Article 94 (Implementation of the composition and closure of the procedure)

1. The liquidators, assisted by the oversight committee, shall supervise the implementation of the composition in accordance with the directives of the Bank of Italy.

2. Once the composition has been implemented, the liquidators shall convene a meeting of the members of the bank to adopt a resolution modifying the corporate purpose in relation to the revocation of the authorization to engage in banking. Where the modification of the corporate purpose is not effected, the liquidators shall take the measures necessary for the deletion of the company and the deposit of the statutory company books provided for by the provisions of the Civil Code on the dissolution and liquidation of corporations.

3. Article 92, paragraph 5, of this Legislative Decree and Article 215 of the Bankruptcy Law shall apply.

Article 95 (Branches of non-EC banks)

1. Branches of non-EC banks shall be subject to the provisions of this Section and Article 77, paragraph 1-bis insofar as they are compatible.

Section III-bis Banks operating at the Community level

Article 95-bis (Recognition of reorganization and liquidation procedures)

1. The measures and procedures for the reorganization and liquidation of EC banks shall be shall be regulated and produce their effects, without additional formalities, in Italy in accordance with the law of the home member state.

2. The measures and procedures for the special administration, provisional management and compulsory administrative liquidation of Italian banks shall apply and produce their effects in the other member states and, on the basis of international agreements, in non-member states.

Article 95-ter (Derogations)

1. By way of derogation from the provisions of Article 95-bis, the effects of a reorganization measure or the initiation of a liquidation procedure: a) on employment contracts and relationships shall be regulated by the law of the member state applicable to the employment contract; b) on contracts that grant the right to use or acquire real property shall be regulated by the law of the member state in which the real property is located. Such law shall determine whether property is movable or real; c) on rights attaching to real property, ships or aircraft subject to entry in a public register shall be regulated by the law of the member state under whose authority the register is kept; d) on the exercise of the property rights and other rights attaching to financial instruments whose existence or transfer requires entry in a register, an account or a central depository system shall be regulated by the law of the member state in which the register, account or central depository system in which such rights are entered is located;

2. By way of derogation from the provisions of Article 95-bis, the law of contract shall regulate netting and novation agreements as well as, without prejudice to the provisions of paragraph 1, subparagraph d), repurchase agreements and transactions effected on a regulated market.

3. Without prejudice to the law of the home member state concerning actions for voidability, voidness or unenforceability of acts prejudicial to creditors, the adoption of a reorganization measure or the initiation of a liquidation procedure shall not prejudice: a) charges of creditors or third parties on tangible or intangible, movable or real property owned by the bank that at the time of the adoption of the reorganization measure or initiation of the liquidation procedure is located in a member state other than the home member state. For this purpose, a right entered in a public register and valid against third parties that entitles to holder to obtain a charge shall be considered equivalent to a charge; b) the claims in respect of the bank of the seller, based on a title retention clause, and the buyer of assets that at the time of the adoption of the reorganization measure or initiation of the liquidation procedure are located within the territory of a member state other than the home member state; c) the right of creditors to net their receivables against the receivables of the bank where netting is permitted under the law applicable to bank receivables.

4. By way of derogation from Article 95-bis, the law of the home member state shall not apply to the voidability, voidness or unenforceability of acts prejudicial to creditors where the beneficiary of such acts proves that the prejudicial act is regulated by the law of a member state that in this situation does not permit any form of challenge.

5. The effects of the adoption of a reorganization measure or the initiation of a liquidation procedure on pending litigation concerning an asset or a right of which the bank has been dispossessed shall be governed by the law of the member state in which the litigation is pending.

6. The provisions of paragraphs 1, 2 and 3 shall apply solely in the cases and the manner established therein. They shall not regard other aspects of the regulations governing reorganization and liquidation procedures, such as regulations governing admission to the statement of liabilities, including with regard to the priority and nature of claims, and the liquidation and allotment of assets, which shall remain subject to the law of the bank’s home member state.

Article 95-quater (Cooperation between authorities)

1. The Bank of Italy shall notify the supervisory authorities of host member states of the initiation of special administration, provisional management and compulsory administrative liquidation procedures involving Italian banks, specifying the effects that such procedures could have. The notification shall be made, using any means, before the start of the procedure, where possible, or immediately thereafter. 2. The Bank of Italy, should it consider it necessary to apply a reorganization procedure to an EC bank in Italy, shall request the authorization of the supervisory authority of the home member state.

Article 95-quinquies (Public notices and notification of persons having entitlement)

1. The measures ordering special administration, provisional management or compulsory administrative liquidation of an Italian bank which has branches or provides services in other member states shall also be published in abridged form in the Official Journal of the European Communities and in two daily newspapers of national circulation in each host member state.

2. The notifications provided for in Article 86, paragraphs 1, 2 and 8 to persons resident, domiciled or with their registered office in another member state shall specify the time limits and procedures for presenting the claims provided for in Article 86, paragraph 4, and the objections referred to in Article 87, paragraph 1, as well as the consequences of failing to comply with the time limits.

3. The public notices and notifications referred to in paragraphs 1 and 2 shall be made in Italian and shall bear a heading in all the official languages of the European Union clarifying the nature and purpose of such notifications.

4. The claims and requests referred to in Article 86, paragraphs 4 and 5, the objections referred to in Article 87 and the late petitions referred to in Article 89 presented by persons resident, domiciled or with their registered office in another member state may be drafted in the official language of such member state and shall bear a heading in Italian clarifying the nature of the act. The liquidators may request a translation in Italian of such acts.

5. For the persons referred to in paragraph 2, the time limits provided for in Article 86, paragraph 4, and Article 87, paragraph 1, shall be doubled. The time limit specified in Article 86, paragraph 5, shall commence as from the date of the publication provided for in paragraph 1 in the Official Journal of the European Communities.

Article 95-sexies (Implementing regulations)

1. The Bank of Italy shall adopt regulations implementing this Section.

Article 95-septies (Application)

1. The provisions of this Section shall apply to measures ordering special administration, provisional management and compulsory administrative liquidation, as well as reorganization or liquidation measures issued by the competent authorities of the members states adopted after 5 May 2004.

Section IV Depositor guarantee schemes

Article 96 (Deposit protection schemes)

1. Italian banks shall join one of the depositor guarantee schemes established and recognized in Italy.

2. Branches of EC banks operating in Italy may join an Italian guarantee scheme for the purpose of supplementing the protection offered by the guarantee scheme of their home member state.

3. Branches of non-EC banks authorized in Italy shall join an Italian guarantee scheme unless they participate in an equivalent foreign guarantee scheme.

4. Guarantee schemes shall be private-law entities. The financial resources for the pursuit of their purposes shall be provided by participating banks.

5. The members of the governing bodies and those who work for guarantee schemes shall be bound by professional secrecy with regard to all the information and figures such schemes possess by virtue of their institutional activity.

Article 96-bis (Interventions)

1. Guarantee schemes shall make payments in cases of compulsory administrative liquidation of banks authorized in Italy. For branches of EC banks in Italy which are members of an Italian guarantee scheme on a supplementary basis, payments shall be made where the guarantee scheme of the home member state has intervened. Guarantee schemes may provide for additional cases and forms of intervention.

2. Guarantee schemes shall protect depositors of EC branches of Italian banks; they may also provide protection for depositors of non-EC branches of Italian banks.

3. Claims relative to repayable funds acquired by banks in the form of deposits or other forms and to bankers' drafts or other similar credit instruments shall be eligible for payment.

4. The following shall be excluded from protection: a) bearer deposits and other repayable bearer funds; b) bonds and claims arising from acceptances, promissory notes and securities transactions; c) the bank's share capital, reserves and other elements of capital; c-bis) the financial instruments regulated by the Civil Code; d) deposits arising from transactions for which there has been a conviction for crimes referred to in Articles 648 bis and 648 ter of the Penal Code; e) deposits from central government departments, regions, provinces and municipalities and other local authorities; f) deposits made by banks in their own name and on their own behalf as well as banks' claims; g) deposits from: financial companies referred to in Article 59, paragraph 1, subparagraph b); insurance companies; collective investment undertakings; other companies of the same banking group; electronic money institutions; h) deposits, including those made by nominees, from members of the governing bodies and senior managers of the bank or of the banking group's parent undertaking; i) deposits, including those made by nominees, from owners of significant holdings for the purposes of Article 19; l) deposits for which the depositor has, on an individual basis, obtained from the bank rates and conditions which helped to aggravate the bank's financial situation on the basis of the findings of the liquidators.

5. The maximum payment for each depositor may not be less than two hundred million lire (103,291 euro).

6. Claims not excluded pursuant to paragraph 4 which are enforceable against the bank in compulsory administrative liquidation in accordance with the provisions of Section III of this Title shall be eligible for payment.

7. Payment shall be made, up to an amount equivalent to ECU 20,000,1 within three months of the date of the decree of compulsory administrative liquidation. The time limit may be extended by the Bank of Italy in exceptional circumstances or special cases for a period not exceeding a total of nine months. The Bank of Italy shall establish the procedures and time limits for payment of the balance due and shall revise the ECU 20,000 limit in order to adjust it to any changes in Community legislation.

8. Guarantee schemes shall succeed to the rights of depositors in respect of the bank in compulsory administrative liquidation within the limits of the payments made and, within such limits, shall have priority in receiving allotments from the liquidation with respect to depositors who have received such payments. 1 See Council Regulation EC/1103/97 of 17 June 1997 on certain provisions relating to the introduction of the euro (published in OJ L 162 of 19 June 1997, page 1), which provided for the replacement of references to the ECU in legal instruments with references to the euro.

Article 96-ter (Powers of the Bank of Italy)

1. The Bank of Italy, having regard to the protection of savers and the stability of the banking system, shall: a) recognize guarantee schemes and approve their bylaws, provided such schemes do not have features entailing an unbalanced distribution of insolvency risks within the banking system; b) coordinate the activity of guarantee schemes with banking crisis procedures and supervisory activity; c) regulate payment procedures, inter alia with reference to joint accounts; d) authorize interventions by guarantee schemes and exclusions of banks from such schemes; e) verify that the protection provided by foreign guarantee schemes to which branches of non-EC banks authorized in Italy belong is equivalent to that provided by Italian guarantee schemes; f) regulate the public notice that banks are required to give with the aim of informing depositors about the guarantee scheme in which they participate and the various types of claim covered; g) regulate the procedures for coordination with the competent authorities of other member states regarding the participation of branches of EC banks in an Italian guarantee scheme and their exclusion therefrom; h) issue measures implementing the rules contained in this Section.

Article 96-quater (Exclusions)

1. Banks may be excluded from guarantee schemes in the event of exceptionally serious failure to comply with the obligations arising from membership thereof.

2. Subject to approval by the Bank of Italy, guarantee schemes shall notify a bank of its failure to comply and grant a time limit of one year to fulfil the obligations referred to in paragraph 1. Once such limitation period, which may be extended by up to one year, has expired without the bank complying, guarantee schemes shall, subject to authorization by the Bank of Italy, give notice to the bank of its exclusion.

3. Funds acquired up to the dateof receipt of the notice of exclusion shall be covered by the guarantee. The excluded bank shall promptly inform depositors of such notice in the manner specified by the Bank of Italy.

4. The authorities that issued banking authorization shall revoke it upon cessation of participation in guarantee schemes; the possibility of ordering compulsory administrative liquidation pursuant to Article 80 shall be unaffected.

5. The exclusion procedure may not be initiated or continued in respect of banks subject to special administration.

Section V Voluntary liquidation

Article 96-quinquies (Ordinary liquidation)

1. Banks shall promptly inform the Bank of Italy of the occurrence of a cause for dissolution of the company. The Bank of Italy shall verify the existence of the conditions to carry out the liquidation procedure in a regular manner.

2. Instruments resolving or declaring the dissolution of the company may not be entered in the Company Register in the absence of the verification referred to in paragraph 1.

3. The entry referred to in paragraph 2 shall result in the lapse of the authorization to engage in banking. Subject to authorization by the Bank of Italy, such lapse shall not prevent the continuation of business pursuant to Article 2487 of the Civil Code.

4. The powers of the credit authorities provided for in this Legislative Decree in respect of the company in liquidation shall not be affected.

Article 97 (Substitution of ordinary liquidating bodies)

1. Without prejudice to the provisions of Article 80, where the procedure for the ordinary liquidation of a bank is not carried out in a regular and expeditious manner, the Bank of Italy may order the substitution of the liquidators and the members of the oversight bodies.

2. The order of substitution shall be published in the manner provided for in Article 81, paragraph 2.

3. The substitution of the liquidating bodies shall not cause any change in the liquidation procedure.

Section V-bis Liability for tort resulting from a criminal offence

Article 97-bis (Liability for tort resulting from a criminal offence)

1. A public prosecutor who, pursuant to Article 55 of Legislative Decree 231 of 8 June 2001, enters a tort ascribed to a bank in the register of reported criminal offences shall notify the Bank of Italy and, with regard to investment services, Consob. The Bank of Italy and Consob, for matters for which the latter is competent, shall be heard where the public prosecutor should so request during the course of the proceedings. The Bank of Italy and Consob may in any case present written reports.

2. At each level of adjudication in trial proceedings, the judge, before ruling, acting on his own authority or otherwise, shall request updated information from the Bank of Italy and Consob, for matters for which the latter is specifically competent, on the situation of the bank, with special regard to its organizational and control structure.

3. An irrevocable ruling sentencing a bank to the proscriptive sanctions provided for by Article 9, paragraph 2, subparagraphs a) and b) of Legislative Decree 231 of 8 June 2001 shall be transmitted, following expiry of the time limit for the conversion of the sanctions, for execution to the Bank of Italy by the judicial authorities. For this purpose, the Bank of Italy may propose or adopt the acts provided for in Title IV, having regard to the characteristics of the sanction imposed and the pre-eminent aim of protecting stability and the rights of depositors and customers.

4. The proscriptive sanctions laid down in Article 9, paragraph 2, subparagraphs a) and b) of Legislative Decree 231 of 8 June 2001 may not be imposed on banks on a precautionary basis. In addition, the provisions of Article 15 of Legislative Decree 231 of 8 June 2001 shall not apply to banks.

5. The Italian branches of EC and non-EC banks shall be subject to the provisions of this Article insofar as they are compatible.

Chapter II Banking groups

Section I Parent undertaking

Article 98 (Special administration)

1. Without prejudice to the provisions of this Article, the provisions of Chapter I, Section I, of this Title shall apply to the parent undertaking of a banking group.

2. In addition to the cases provided for in Article 70, special administration of a parent undertaking may be ordered where: a) there has been serious non-compliance in the performance of the activity referred to in Article 61, paragraph 4; b) a company belonging to the banking group has been subjected to bankruptcy proceedings, controlled administration, composition with creditors, compulsory administrative liquidation, special administration or to any other analogous procedure provided for in special laws, as well as where an official receiver has been appointed by court order in accordance with the provisions of the Civil Code governing the reporting of serious management irregularities to the court, and the financial or operational equilibrium of the group could be seriously affected.

3. Special administration of the parent undertaking shall last for a period of one year from the date of issue of the decree of the Minister for the Economy and Finance unless the decree itself establishes a shorter period or the Bank of Italy authorizes its early closure. In exceptional cases the procedure may be extended for a period of up to one year.

4. The special administrators, after consulting the oversight committee and subject to authorization by the Bank of Italy, may remove or replace some or all of the directors of the companies belonging to the group for the purpose of making necessary changes in management policy. The new directors shall remain in office until the end of special administration of the parent undertaking at the latest. Directors who are removed shall be entitled only to an indemnity equal to the ordinary compensation due to them for the remainder of their appointment or for a period of six months, whichever is shorter.

5. The special administrators may request a judicial finding of insolvency of the companies belonging to the group.

6. The special administrators may request the companies belonging to the group to provide figures, information and any other elements which may be useful in the performance of their duties.

7. To facilitate the overcoming of financial difficulties, the special administrators may order the suspension of payments in the manner and with the effects provided for in Article 74, the limitation periods of which shall be tripled. 8. The Bank of Italy may provide for the filing of the financial statements referred to in Article 75, paragraph 2, to be publicized by way of special notices.

Article 99 (Compulsory administrative liquidation)

1. Without prejudice to the provisions of this Article, the provisions of Chapter I, Section III, of this Title shall apply to the parent undertaking.

2. In addition to the cases referred to in Article 80, compulsory administrative liquidation of the parent undertaking may be ordered where non-compliance in the performance of the activity referred to in Article 61, paragraph 4, is exceptionally serious.

3. The liquidators shall file annually with the office of the Company Register a report on the state of the accounts and the progress of the liquidation, accompanied by information concerning the implementation of the procedures to which other companies belonging to the group have been subjected and any actions which may have been taken to protect depositors. Such report shall be accompanied by a report of the oversight committee. The Bank of Italy may provide for the filing of the report to be publicized by way of special notices.

4. The provisions of Article 98, paragraphs 5 and 6, shall apply.

5. Where there has been a judicial finding of insolvency, the liquidators shall be responsible for bringing the revocation actions referred to in Article 67 of the Bankruptcy Law with respect to other companies belonging to the group. Such actions may be brought for the acts specified in Article 67, subparagraphs 1), 2) and 3), of the Bankruptcy Law which were effected in the five years prior to the compulsory liquidation decree and for the acts specified in subparagraph 4) and in the second paragraph of such Article which were effected in the three years prior to the order.

Section II Group companies

Article 100 (Special administration)

1. Without prejudice to the provisions of this Article, where the parent undertaking is subjected to special administration or compulsory administrative liquidation, the provisions of Chapter I, Section I, of this Title shall apply, where the conditions obtain, to companies belonging to the group. A request to the Bank of Italy for special administration may also be made by the special administrators or the liquidators of the parent undertaking.

2. Where a company belonging to the group is subjected to controlled administration or an official receiver has been appointed by court order in accordance with the provisions of the Civil Code governing the reporting of serious management irregularities to the court, such procedures shall be converted into special administration. The competent court, upon request or on its own authority, shall declare with a ruling in camera that the company is subjected to special administration and shall order the transfer of the record to the Bank of Italy. The bodies of the terminated procedure and those of the special administration shall promptly effect the handing over of the company and give notice thereof in the manner established by the Bank of Italy. The effects of acts legally completed shall not be prejudiced.

3. Where the companies belonging to the group to be subjected to special administration are subject to supervision, the order shall be adopted after consulting the competent supervisory authority, which in an emergency may be given a time limit within which to formulate its opinion.

4. The duration of special administration shall be independent of that of the procedure to which the parent undertaking has been subjected. The provisions of Article 98, paragraph 8, shall apply.

5. To facilitate the overcoming of financial difficulties, the special administrators, acting in agreement with the special administrators or the liquidators of the parent undertaking, may order the suspension of payments in the manner and with the effects provided for in Article 74, the limitation periods of which shall be tripled.

Article 101 (Compulsory administrative liquidation)

1. Without prejudice to the provisions of this Article, where the parent undertaking is subjected to special administration or compulsory administrative liquidation, the provisions of Chapter I, Section III, of this Title shall apply to the group companies which a court has declared to be insolvent. For banks belonging to the group the application of the provisions of Section III shall be unaffected. A request for compulsory liquidation may also be made to the Bank of Italy by the special administrators or the liquidators of the parent undertaking.

2. Where companies belonging to the group are subjected to bankruptcy proceedings, compulsory administration or other insolvency proceedings, such procedures shall be converted into the compulsory liquidation governed by this Article. Without prejudice to the prior finding of insolvency, the competent court, upon request or on its own authority, shall declare with a ruling in camera that the company is subjected to compulsory liquidation under this Article and shall order the transfer of the record to the Bank of Italy. The bodies of the terminated procedure and those of the liquidation shall promptly effect the handing over of the company and give notice thereof in the manner established by the Bank of Italy. The effects of acts legally completed shall not be prejudiced.

3. The liquidators shall have the powers referred to in Article 99, paragraph 5.

Article 102 (Procedures applicable to individual companies)

1. Where the parent undertaking has not been subjected to special administration or compulsory administrative liquidation, the companies belonging to the group shall be subjected to the procedures established by laws applicable to them. Notice of such orders shall be given immediately to the Bank of Italy by the issuing administrative or judicial authorities. The administrative or judicial authorities overseeing the procedures shall inform the Bank of Italy of any circumstances that emerge during the procedures which may be relevant for the purposes of supervision of the banking group.

Section III Common measures

Article 103 (Bodies responsible for the procedures)

1. Without prejudice to Articles 71 and 81, the same persons may be appointed to more than one of the bodies responsible for the special administration or compulsory administrative liquidation of companies belonging to the same group where this is considered likely to facilitate the procedures.

2. A special administrator or liquidator who by virtue of being a special administrator or liquidator of another company belonging to the group has an interest conflicting with that of the company in a particular transaction must disclose such interest to any other special administrators or liquidators, the oversight committee and the Bank of Italy. In the event of omission, members of the oversight committee with knowledge of the conflict shall give such notice. The oversight committee may establish special safeguards and formulate guidelines with respect to the transaction, for the non- observance of which the special administrators or the liquidators shall be personally responsible. Without prejudice to its power to remove or replace members of the bodies responsible for the procedures, the Bank of Italy may issue directives or, where appropriate, appoint a special administrator or liquidator to carry out particular actions.

3. The emoluments due to special administrators, liquidators and members of the oversight committee shall be determined by the Bank of Italy in accordance with the criteria it establishes and shall be charged to the companies. The emoluments shall be determined on the basis of an overall evaluation of the services associated with any appointments held in other procedures involving the group.

Article 104 (Jurisdiction)

1. Where the parent undertaking is subjected to special administration or compulsory administrative liquidation, the competent court for revocation actions under Article 99, paragraph 5, and for all controversies between companies belonging to the group shall be the court in whose jurisdiction the parent undertaking has its registered office.

2. Where the parent undertaking is subjected to special administration or compulsory administrative liquidation, the competent court for appeals from administrative measures concerning or connected with the procedures of the special administration or compulsory administrative liquidation of the parent undertaking and group companies shall be the tribunale amministrativo regionale in Rome.

Article 105 (Groups and companies not entered in the register)

1. The provisions of the preceding Articles shall also apply to groups and companies which, even though they are not entered in the register referred to in Article 64, meet the conditions for entry therein.

TITLE V PERSONS OPERATING IN THE FINANCIAL SECTOR

Article 106 (General register)

1. The pursuit on a public basis of the activities of acquiring holdings, granting loans in whatever form, providing money transmission services and trading in foreign exchange shall be restricted to financial intermediaries entered in a register kept by the UIC.

2. Financial intermediaries specified in paragraph 1 may only engage in financial activities, without prejudice to any restrictions on such activities established by law.

3. Entry in the register shall be subject to the following conditions: a) legal form of a società per azioni, società in accomandita per azioni, or società a responsabilità limitata or società cooperativa; b) corporate purpose in conformity with the provisions of paragraph 2; c) paid-up share capital of not less than five times the minimum capital required for the formation of a società per azioni; d) owners of holdings and corporate officers satisfying the requirements established by Articles 108 and 109.

4. The Minister for the Economy and Finance, after consulting the Bank of Italy and the UIC: a) shall specify the content of the activities referred to in paragraph 1 and the circumstances in which their pursuit shall be considered to involve the public. Consumer credit shall be considered to involve the public even where it is limited to members; b) may, by way of derogation from the provisions of paragraph 3, where financial intermediaries carry on certain kinds of activity, limit the choice of legal form, allow the adoption of other legal forms and establish different capital requirements.

5. The UIC shall specify conditions for entry in the register and shall notify the Bank of Italy and Consob of entries therein.

6. The UIC may require financial intermediaries to provide figures, information, records and documents and, if necessary, may carry out on-the- spot verifications of such intermediaries, also with the cooperation of other authorities, for the purpose of verifying compliance with the requirements for entry in the register.

7. Persons performing administrative, managerial or control functions in financial intermediaries shall inform the UIC, in the manner it establishes, of similar positions held in other companies or entities of whatever kind.

Article 107 (Special register)

1. The Minister for the Economy and Finance, after consulting the Bank of Italy and Consob, shall establish objective standards with reference to the activity carried on, the volume of business and the ratio of debt to equity capital, on the basis of which to determine the financial intermediaries which must be entered in a special register kept by the Bank of Italy.

2. The Bank of Italy, in compliance with the resolutions of the Credit Committee, shall issue directions to financial intermediaries entered in the special register concerning capital adequacy and the limitation of risk in its various forms as well as administrative and accounting procedures and internal control mechanisms, as well as disclosure in such areas. Where necessary, the Bank of Italy shall adopt measures concerning individual intermediaries in such matters. With reference to certain kinds of activity the Bank of Italy may also issue regulations aimed at ensuring that they are carried on in a regular manner.

2-bis. The directions issued pursuant to paragraph 2 shall permit financial intermediaries entered in the special register to use: a) credit risk assessments issued by external companies or entities provided for by Article 53, paragraph 2-bis, subparagraph a); b) internal risk measurement systems for calculating capital requirements, subject to prior authorisation by the Bank of Italy.

3. Intermediaries shall send the Bank of Italy, in the manner and within the time limits it establishes, periodic returns, as well as any other figures or documents it may request.

4. The Bank of Italy may carry out inspections with the power to request the exhibition of documents and records deemed necessary. 4-bis. The Bank of Italy may prohibit intermediaries from undertaking new transactions and order a reduction in activities, in addition to prohibiting the distribution of profits or other elements of capital, for violation of laws or regulations issued pursuant to this decree.

Financial intermediaries entered in the special register shall remain entered in the general register; paragraphs 6 and 7 of Article 106 shall not apply to such intermediaries.

6. Financial intermediaries entered in the special register, where they have been authorized to provide investment services or acquired repayable funds in an amount exceeding their capital, shall be subject to the provisions of Title IV, Chapter I, Sections I and III, as well as the provisions of Article 97-bis insofar as they are compatible; Article 57, paragraphs 4 and 5, of Legislative Decree 58 of 24 February 1998 shall apply in place of Article 86, paragraphs 6 and 7, and Article 87, paragraph 1. 7. Article 47 shall apply to intermediaries entered in the register established by paragraph 1 that engage in the granting of loans in whatever form.

Article 108 (Integrity requirements for members)

1. The Minister for the Economy and Finance, after consulting the Bank of Italy and the UIC, shall establish the integrity requirements for owners of holdings in financial intermediaries in regulations issued under Article 17, paragraph 3, of Law 400 of 23 August 1988.

2. In the regulations referred to in paragraph 1 the Minister for the Economy and Finance shall establish the thresholds for holdings for such paragraph to apply. For this purpose holdings owned through subsidiary companies, trust companies or nominees shall also be considered.

3. Failure to satisfy such requirements shall preclude the exercise of the voting rights and other rights attaching to holdings in excess of the above- mentioned limit that enable the holder to exercise an influence over the company. In the event of non-compliance, resolutions or other acts adopted with the vote or decisive contribution of the holdings envisaged in paragraph 1 may be challenged under the provisions of the Civil Code. Challenge of the resolution shall be obligatory for persons exercising administrative and control functions. The holdings for which voting rights may not be exercised shall be counted for the purposes of establishing the due constitution of the related general meeting.

4. Holdings exceeding the limit referred to in paragraph 2 owned by persons who own holdings in financial intermediaries who do not satisfy the integrity requirements must be divested within the time limits established by the Bank of Italy.

Article 109 (Experience, integrity and independence requirements for corporate officers)

1. The experience, integrity and independence requirements for persons performing administrative, managerial or control functions in financial intermediaries shall be established by the Minister for the Economy and Finance, after consulting the Bank of Italy and the UIC, in regulations issued under Article 17, paragraph 3, of Law 400 of 23 August 1988.

3. The regulations referred to in paragraph 1 shall establish the causes requiring temporary suspension from office and its duration. The suspension shall be declared in the manner established by paragraph 2.

4. In the event of inaction by the board of directors, the supervisory board or the management board, the Bank of Italy shall declare the disqualification or suspension from office of persons performing administrative, managerial or control functions in financial intermediaries entered in the special register. 4-bis. In the event of failure to satisfy independence requirements established by the Civil Code or the bylaws of the financial intermediary, the provisions of paragraphs 2 and 4 shall apply.

Article 110 (Notification requirements)

1. Any person who, through subsidiary companies, trust companies, nominees or otherwise, owns a significant holding in a financial intermediary shall notify the financial intermediary and the UIC or, where the financial intermediary is entered in the special register, the Bank of Italy. Variations in holdings shall be notified where they result in holdings exceeding the limit established by the Bank of Italy.

2. The Bank of Italy shall establish the grounds, manner and time limits for the notices referred to in paragraph 1, including cases in which the voting rights are exercisable by or attributed to a person other than the member.

3. The UIC or, where financial intermediaries are entered in the special register, the Bank of Italy may request information from any interested parties for the purpose of verifying compliance with the requirements referred to in paragraph 1.

4. Voting rights or other rights that enable the holder to exercise an influence over the company attaching to holdings for which notice has not been given may not be exercised. In the event of non-compliance, resolutions or other acts adopted with the vote or decisive contribution of the holdings envisaged in paragraph 1 may be challenged under the provisions of the Civil Code. Where financial intermediaries are entered in the special register, the challenge may also be initiated by the Bank of Italy within one hundred and eighty days of the date of the resolution or, where the resolution must be entered in the Company Register, within one hundred and eighty days of such entry or, if it must only be deposited with the office of the Company Register, within one hundred and eighty days of the date of such deposit. The holdings for which voting rights may not be exercised shall be counted for the purpose of establishing the due constitution of the related general meeting.

Article 111 (Deletion from the general register)

1. The Minister for the Economy and Finance, acting on a proposal from the UIC, shall order deletion from the general register: a) for non-compliance with the provisions of Article 106, paragraph 2; b) where one of the conditions referred to in Article 106, paragraph 3, sub-paragraphs a), b) and c), is no longer met; c) in the event of serious violations of laws or of regulations adopted under this Legislative Decree.

2. The Bank of Italy, Consob or the UIC within the scope of their respective authority may propose deletion from the register. In the case of financial intermediaries entered in the special register, deletion from the general register shall be ordered only after deletion from the special register by the Bank of Italy.

3. The order of deletion from the register shall be issued, except as a matter of urgency, following notification of the charges to the financial intermediary concerned and consideration of briefs to be submitted within thirty days. Such notification shall be effected by the UIC or, where financial intermediaries are entered in the special register, by the Bank of Italy.

4. Within sixty days of notification of the deletion order the administrative body shall convene a meeting of the members to modify the corporate purpose, take other action pursuant to the order or adopt a resolution for the voluntary liquidation of the company. 5. This Article shall not apply in the cases provided for in Article 107, paragraph 6.

Article 112 (Notifications by the board of statutory auditors)

1. Boards of statutory auditors shall inform the UIC or, where intermediaries are entered in the special register, the Bank of Italy, without delay of every act or fact they come to know of in the performance of their duties that may constitute an irregularity in the management of financial intermediaries or a violation of the provisions governing financial intermediation. To this end, the bylaws of intermediaries, regardless of the administrative and control system adopted, shall assign the body responsible for control functions the necessary duties and powers.

2. [Repealed]

Article 113 (Persons operating on a non-public basis)

1. The pursuit primarily on a non-public basis of activities referred to in Article 106, paragraph 1, shall be restricted to persons entered in a special section of the general register. The Minister for the Economy and Finance shall issue regulations implementing this paragraph.

2. The provisions of Article 108, paragraphs 1, 2 and 3, and those of Article 109 referring to integrity and independence requirements shall apply.

Article 114 (Final provisions)

1. Without prejudice to Article 18, the Minister for the Economy and Finance shall regulate the pursuit in Italy of activities referred to in Article 106, paragraph 1, by persons whose registered office is located in a foreign country.

2. The provisions of this Title shall not apply to persons already subject by law to substantially equivalent forms of supervision of their financial activities. The Minister for the Economy and Finance, after consulting the Bank of Italy and the UIC, shall verify whether the conditions for exemption exist.

3. [Repealed]

TITLE V-BIS ELECTRONIC MONEY INSTITUTIONS

Article 114-bis (Issue of electronic money)

1. The issue of electronic money shall be reserved to banks and electronic money institutions. Electronic money institutions may engage solely in the business of issuing electronic money through the immediate exchange of funds received. Within the limits established by the Bank of Italy, electronic money institutions may also engage in related and instrumental business activities and the provision of payment services; the granting of credit in any form is precluded.

2. The Bank of Italy shall enter in a register Italian electronic money institutions and the Italian branches of such institutions having their registered office in a member or non-member state.

3. A bearer of electronic money is entitled to ask the issuer, in the manner specified in the contract, to redeem it at par value in legal tender or by a transfer to an account, paying the issuer the charges strictly necessary to carry out the operation. The contract may stipulate a minimum threshold for redemption that shall not exceed the amount established by the Bank of Italy in compliance with the provisions of Community law.

Article 114-ter (Authorization and cross-border transactions)

1. The Bank of Italy shall grant authorization to engage in the business of issuing electronic money where the conditions provided for in Article 14, paragraph 1, with the exception of the provisions of Article 19, paragraphs 6 and 7, are met. The provisions of Article 14, paragraphs 2, 2-bis and 3 shall also apply to electronic money institutions.

2. Electronic money institutions may operate: a) in a member state, whether establishing a branch or not, in compliance with the procedures established by the Bank of Italy; b) in a non-member state, whether establishing a branch or not, subject to authorization by the Bank of Italy.

3. The provisions of Article 15, paragraph 3, and Article 16, paragraph 3, shall apply to electronic money institutions having their registered office in another member state that intend to operate in Italy. The provisions of Article 14, paragraph 4, Article 15, paragraph 4, and Article 16, paragraph 4, shall apply to electronic money institutions having their registered office in a non-member state that intend to operate in Italy.

Article 114-quater (Supervision)

1. Electronic money institutions shall be subject to the provisions of Title II, Chapters III, with the exception of Article 19, paragraphs 6 and 7, and IV; Title III, with the exception of Article 56; Title IV, Chapter I, with the exception Section IV; Title VI, Chapters I and III; and Title VIII, Articles 134, 139 and 140 insofar as they are compatible.

2. For the purposes of the application of Title III, Chapter II, electronic money institutions shall be considered equivalent to the financial companies referred to in Article 59, paragraph 1, subparagraph b). The Bank of Italy may issue regulations subjecting electronic money institutions and persons performing related or instrumental activities or other financial activities that are not subject to supervision on a consolidated basis pursuant to Title III, Chapter II, Section II to supervision on a consolidated basis.

3. The Bank of Italy may establish, for prudential purposes, a maximum limit on the par value of electronic money. The Bank of Italy, pursuant to the provisions of Article 146, shall issue measures to promote the development of electronic money, ensure its reliability and promote the regular operation of the related system.

Article 114-quinquies (Waiver)

1. The Bank of Italy may waive the application of the provisions of this Title to electronic money institutions where one or more of the following conditions are met: a) the total amount of outstanding electronic money issued by the electronic money institution does not exceed the maximum amount established by the Bank of Italy in compliance with the provisions of Community law; b) the electronic money issued by the electronic money institution is accepted as a means of payment only by any subsidiaries of the institution which perform operational or other ancillary functions related to electronic money issued or distributed by the institution, any parent undertaking of the institution or any other subsidiaries of that parent undertaking; c) the electronic money issued by the electronic money institution is accepted as payment only by a limited number of undertakings, which can be distinguished by their location or their close financial or business relationship with the institution.

2. For the purposes of the waiver provided for by paragraph 1, contractual relationships shall establish a maximum par value for the electronic money at the disposal of each customer that does not exceed the amount established by the Bank of Italy in conformity with the provisions of Community law.

3. An electronic money institution for which a waiver has been granted under paragraph 1 shall not benefit from mutual recognition arrangements.

TITLE VI DISCLOSURE OF TERMS AND CONDITIONS OF CONTRACT

Chapter I Banking and financial transactions and services

Article 115 (Scope)

1. The provisions of this Chapter shall apply to activities carried on in Italy by banks and financial intermediaries.

2. The Minister for the Economy and Finance may specify other persons who shall be subject to the provisions of this Chapter in consideration of the activities they carry on.

3. The provisions of this Chapter shall apply to transactions referred to in Chapter II of this Title for matters not otherwise regulated.

Article 116 (Public notices)

1. On all premises open to the public, notices shall be provided showing interest rates, prices, charges for customer notifications and every other economic condition concerning the transactions and services offered, including interest on arrears and the value dates for the recognition of interest. For credit operations in any form, notice shall be provided showing the average percentage rate of charge provided for by Article 2, paragraphs 1 and 2 of Law 108 of 7 March 1996. Such notices may not make reference to usage.

2. The Minister for the Economy and Finance, after consulting Consob and the Bank of Italy, shall establish with regard to government securities: a) methods and parameters for the determination of the maximum placement commission chargeable to customers; b) methods and parameters designed to ensure full disclosure of the determination of yields; c) any additional public notice, disclosure or advertising requirements to be complied with in placement activity.

3. The Credit Committee shall: a) specify the transactions and services which shall be subject to disclosure requirements; b) issue regulations concerning the form and content of the public notice, the manner in which it is to be provided and the conservation of the documents corroborating the information made public; c) establish uniform methods for the disclosure of interest rates and the computation of interest and other items affecting the economic aspects of contractual relationships; d) specify the essential elements among those referred to in paragraph 1 that must be disclosed in advertisements and offers, in whatever form they may be effected, with which the persons referred to in Article 115 announce the availability of transactions and services.

4. Such provision of information to the public shall not constitute a public offer under Article 1336 of the Civil Code.

Article 116-bis (Rating decisions)

1. The Bank of Italy may require banks and financial intermediaries to inform undertakings that so request of the main factors underlying the ratings regarding them. The charges associated with any consequent notification shall not be borne by the customer.

Article 117 (Contracts)

1. Contracts shall be reduced to writing and customers shall be given a copy.

2. The Credit Committee may provide that certain types of contract may be completed in a different form where there are justified technical reasons.

3. Failure to comply with the prescribed form shall render the contract null and void.

4. Contracts shall state the rate of interest and every other price and condition to be applied, including in the case of credit agreements any increase in charges in respect of arrears.

5. The possibility of modifying interest rates or any other price or condition in a manner unfavourable to the customer must be expressly stated in the contract in a clause specifically approved by the customer.

6. Clauses which refer to usage for the determination of interest rates or any other price or condition to be applied shall be null and deemed not to be part of the contract, as shall those which provide for rates, prices or conditions less favourable to the customer than those made public.

7. In the event of non-compliance with paragraph 4 or of nullity under paragraph 6, the following terms and conditions shall apply: a) for lending and deposit transactions respectively, the minimum and the maximum nominal interest rate on twelve-month Treasury bills or other similar securities specified by the Minister for the Economy and Finance, issued in the twelve months preceding the completion of the contract; b) the other prices and conditions made public during the period of the contractual relationship for corresponding categories of transactions and services; in the absence of disclosure, nothing shall be payable.

8. The Bank of Italy, in agreement with Consob, may establish that certain contracts or securities, designated by a particular name or on the basis of specific qualifying criteria, shall have a standardized content. Contracts and securities which do not conform shall be null and void. The responsibility of the bank or financial intermediary for violation of the regulations of the Bank of Italy, adopted in agreement with Consob, shall not be affected.

Article 118 (Unilateral alteration of contracts)

1. Continuing contracts may contain agreements providing for the unilateral alteration of rates, prices or other terms or conditions where there is a justified reason in compliance with the provisions of Article 1341, second paragraph, of the Civil Code.

2. Any unilateral alteration of contractual terms and conditions shall be notified to the customer in a manner that prominently displays the phrase ‘Proposta di modifica unilaterale del contratto’ with at least thirty days prior notice in writing or by some other permanent means previously accepted by the customer. Where the customer does not terminate, at no expense, the contract within sixty days, the alteration shall be deemed to be approved. Where the contract is terminated, in its settlement the customer may obtain the application of the conditions previously applied.

3. Alterations unfavourable to the customer which do not comply with the provisions of this Article shall be without effect.

4. Alterations of interest rates caused by monetary policy decisions shall simultaneously regard both lending rates and borrowing rates and shall be applied in a manner that is not prejudicial to the customer.

Article 119 (Periodic notifications to customers)

1. Where a contract is continuing, persons referred to in Article 115 shall provide the customer with a clear and complete written report on the relationship at the expiry of the contract and at least once a year. The Credit Committee shall establish the content and form of such report.

2. For current accounts, the statement of account shall be sent to the customer annually or, at the customer's choice, half-yearly, quarterly or monthly.

3. In the absence of a written objection by the customer within sixty days of receipt, statements of account and other periodic notifications to customers shall be deemed to be approved.

4. The customer, the person succeeding to him on whatever grounds or the person assuming administration of his assets shall be entitled to receive at their own expense, within a reasonable time and in any case within ninety days, a copy of the documentation concerning individual transactions effected within the last ten years.

Article 120 (Value-dating and methods of computing interest)

1. Interest on deposits of cash, bankers' drafts issued by the same bank and cheques drawn on the branch where the deposit is made shall be payable from the day of deposit and accrue until the day of withdrawal.

2. The Credit Committee shall establish the methods and criteria of compounding of interest accrued in banking transactions, prescribing in any case that in current account transactions interest payable and receivable by customers shall be computed with the same periodic intervals.

Chapter II Consumer credit

Article 121 (Notion)

1. Consumer credit shall mean the granting of credit in the course of a trade, business or profession in the form of deferred payment, a loan or other similar financial accommodation to a natural person acting for purposes outside his business, trade or profession (a consumer).

2. The granting of consumer credit shall be restricted to: a) banks; b) financial intermediaries; c) persons authorized to sell goods or services in Italy, exclusively in the form of deferred payment of the price.

3. The provisions of this Chapter and of Chapter III insofar as they are compatible shall apply to third parties intervening in consumer credit business.

4. The provisions of this Chapter shall not apply: a) to loans larger or smaller than the respective limits established by the Credit Committee by a resolution which shall take effect on the thirtieth day following its publication in the Gazzetta Ufficiale della Repubblica italiana; b) to supply contracts under Article 1559 ff. of the Civil Code, provided they are completed in writing in advance and a copy given to the consumer at the time of completion; c) to loans repayable in a single payment within eighteen months for which the only charges, if any, are not computed as interest, provided the amount of such charges is contractually determined; d) to loans made without any direct or indirect consideration in the form of interest or other charges, with the exception of the reimbursement of documented out-of-pocket expenses actually incurred; e) to loans intended for the purpose of acquiring or retaining a property right in land or in an existing or projected building, or for the purpose of renovation or improvement; f) to hiring agreements, provided they include the express clause that the title to the hired good may at no time be transferred, with or without consideration, to the hirer.

Article 122 (Annual percentage rate of charge)

1. The annual percentage rate of charge (APR) shall be the total cost of the credit charged to the consumer, expressed as an annual percentage of the amount of credit granted. The APR shall include interest and all the costs to be sustained for the use of the credit.

2. The Credit Committee shall establish the method of computing the APR, specifying the items to be computed and the computation formula.

3. Where loans may be obtained only through the intervention of a third party, the cost of such intervention must be included in the APR.

Article 123 (Public notice)

1. Article 116 shall apply to consumer credit transactions. The public notice shall include a statement of the APR and the period of its validity.

2. Advertisements and offers effected by any means whereby a person indicates the interest rate or other figures concerning the cost of credit shall state the APR and the period of its validity. The Credit Committee shall specify the cases in which the APR may be stated by way of a representative example where there are justified technical reasons.

Article 124 (Contracts)

1. Article 117, paragraphs 1 and 3, shall apply to consumer credit agreements.

2. Consumer credit agreements shall state: a) the amount and conditions of the loan; b) the number, amounts and due dates of the instalments; c) the APR; d) details of the circumstances in which the APR may be altered; e) the amount and specification of any charges not included in the computation of the APR. Where such charges cannot be stated exactly, a realistic estimate must be provided; apart from such charges nothing shall be payable by the consumer; f) any security required; g) any insurance cover required of the consumer and not included in the computation of the APR.

3. In addition to the requirements of paragraph 2, consumer credit agreements for the purchase of certain goods or services shall contain, on pain of nullity: a) an itemized description of the goods or services; b) the cash purchase price, the price established by the contract and the amount of any down payment; c) the conditions for the transfer of title where such transfer is not immediate.

4. No sum may be required of or charged to the consumer except on the basis of express contractual provisions. Clauses referring to usage for the determination of the economic conditions to be applied shall be null and deemed not to be part of the contract.

5. Where contractual clauses are omitted or null they shall be replaced by law in accordance with the following criteria: a) the APR shall be equal to the nominal minimum interest rate on twelve-month Treasury bills or other similar securities specified by the Minister for the Economy and Finance, issued in the twelve months preceding the completion of the contract; b) the credit shall expire after thirty months; c) no security or insurance cover shall be provided in favour of the lender.

Article 125 (Other consumer protection provisions)

1. The provisions of Article 1525 of the Civil Code shall also apply to all consumer credit agreements in connection with which a charge is imposed on the goods purchased with the proceeds of the loan.

2. The right to anticipate performance or terminate the contract without penalty shall pertain only to the consumer, with no possibility of agreement to the contrary. Where the consumer exercises the right to anticipate performance he shall be entitled to an equitable reduction in the total cost of the credit, determined in the manner established by the Credit Committee.

3. Where a creditor's rights under a consumer credit agreement are assigned, the consumer shall still be entitled to plead any defence against the assignee that was available to him against the assignor, including set off, also by way of derogation from the provisions of Article 1248 of the Civil Code.

4. [Repealed]

5. [Repealed]

Article 126 (Special rules for overdraft facilities)

1. Contracts with which banks and financial intermediaries grant consumers an overdraft facility not associated with the use of a credit card shall contain, on pain of nullity, the following indications: a) the credit limit and the expiry date; b) the annual interest rate and an itemized description of the applicable charges from the date the contract is completed, as well as the conditions that may determine the alteration of such terms during the life of the contract. Apart from such charges nothing shall be payable by the consumer; c) the manner of terminating the contract.

Chapter III General rules and controls

Article 127 (General rules)

1. Derogations from the provisions of this Title may be made solely to the advantage of the customer.

2. The nullity provisions of this Title may be enforced only by the customer.

3. The resolutions within the scope of the authority of the Credit Committee that are provided for in this Title shall be adopted by the Committee, acting on a proposal from the Bank of Italy, in agreement with Consob; the proposal shall be formulated after consulting the UIC for persons operating in the financial sector entered only in the general register established by Article 106.

Article 128 (Controls)

1. For the purposes of verifying compliance with the provisions of this Title, the Bank of Italy may acquire information, records and documents and carry out on-the-spot verifications of banks and financial intermediaries entered in the special register established by Article 107.

2. For financial intermediaries entered only in the general register established by Article 106 and persons specified in Article 155, paragraph 5, the controls provided for in paragraph 1 shall be carried out by the UIC, which to this end may request the cooperation of other authorities.

3. With reference to persons specified in Article 121, paragraph 2, sub-paragraph c), the control provided for in paragraph 1 shall be delegated to the Minister for Industry, who shall also be responsible for imposing the sanctions provided for in Article 144, paragraphs 3 and 4, and Article 145, paragraph 3.

4. With reference to persons specified pursuant to Article 115, paragraph 2, the Credit Committee shall indicate the authorities competent to carry out the controls provided for in paragraph 1 and impose the sanctions provided for in Article 144, paragraphs 3 and 4, and Article 145, paragraph 3.

5. In the event of repeated violations of the provisions concerning public notices, the Ministry for the Economy and Finance, acting on a proposal from the Bank of Italy or the UIC or from the other authorities indicated by the Credit Committee pursuant to paragraph 4, within the scope of their respective authority, may order the suspension of the activity, including that of single branches, for a period not exceeding thirty days.

Article 128-bis (Dispute settlement)

1. The persons referred to in Article 115 shall participate in systems for the out-of-court settlement of disputes with customers.

2. A resolution of the Credit Committee, acting on a proposal by the Bank of Italy, shall specify the criteria for the implementation of dispute settlement procedures and the composition of the deciding body in a manner that ensures the impartiality of such body and the representation of the persons involved. The procedures shall in any case ensure the speed and economy of the settlement of disputes and the effectiveness of the safeguards.

3. The provisions of paragraphs 1 and 2 shall not prejudice customers’ right to avail themselves, at any time, of all other means of protection provided for by law.

TITLE VII OTHER CONTROLS

Article 129 (Issues of financial instruments)

1. The Bank of Italy may require issuers and offerors to provide periodic reports, data and information on the financial instruments issued or offered in Italy or issued or offered abroad by Italian companies and entities, in order to acquire information on developments in financial products and markets.

8. The Bank of Italy shall issue regulations implementing this Article.

TITLE VIII SANCTIONS

Chapter I Unauthorized banking and financial activity

Article 130 (Unauthorized fund-raising)

1. Any person who engages in fund-raising on a public basis in violation of Article 11 shall be punished by imprisonment for a term of between six months and three years and by a fine of between twenty-five million (12,911 euro) and one hundred million lire (51,645 euro).

Article 131 (Unauthorized banking)

1. Any person who engages in fund-raising on a public basis in violation of Article 11 and grants credit shall be punished by imprisonment for a term of between six months and four years and by a fine of between four million (2,065 euro) and twenty million lire (10,329 euro).

Article 131-bis (Unauthorized issue of electronic money)

1. Any person who issues electronic money without being entered in the register referred to in Article 13 or in that referred to in Article 114-bis, paragraph 2, shall be punished by imprisonment for a term of between six months and four years and by a fine of between 2,066 euro and 10,329 euro.

Article 132 (Unauthorized financial activity)

1. Any person who engages on a public basis in one or more of the financial activities referred to in Article 106, paragraph 1, without being entered in the register referred to in such article shall be punished by imprisonment for a term of between six months and four years and by a fine of between four million (2,065 euro) and twenty million lire (10,329 euro). The same sanction shall apply to any person who engages in activities reserved to financial intermediaries entered in the special register referred to in Article 107 without being entered in such register.

2. Any person who engages primarily on a non-public basis in one or more of the financial activities referred to in Article 106, paragraph 1, without being entered in the special section of the general register referred to in Article 113 shall be punished by imprisonment for a term of between six months and three years.

Article 132-bis (Report to the public prosecutor and the court)

1. Where there is a well-founded suspicion that a company engages in fund-raising, banking, financial activity or the issue of electronic money in violation of Articles 130, 131, 131-bis and 132, the Bank of Italy or the UIC may file a report with the public prosecutor for the purposes of the adoption of the measures provided for in Article 2409 of the Civil Code or may petition the court to adopt the same measures. The cost of the inspection shall be charged to the company.

Article 133 (Unauthorized use of names)

1. The use in the name or in any logo or communication addressed to the public of the words banca, banco, credito, risparmio or other words or expressions in Italian or in a foreign language likely to deceive as to authorization to engage in banking shall be prohibited for all persons other than banks.

1-bis. The use in the name or in any logo or communication addressed to the public of the expression moneta elettronica or other words or expressions in Italian or in a foreign language likely to deceive as to authorization to engage in the issue of electronic money shall be prohibited for all persons other than electronic money institutions and banks.

2. The Bank of Italy shall determine on a general basis the cases in which, because of the existence of administrative controls or other circumstances, the words or expressions referred to in paragraphs 1 and 1- bis may be used by persons other than banks or electronic money institutions.

3. Any person who contravenes the provisions of paragraph 1 shall be punished by a pecuniary administrative sanction of between two million (1,032 euro) and twenty million lire (10,329 euro). The same sanction shall apply to any person who, by providing information in any form, falsely leads others to believe he is subject to supervision by the Bank of Italy in accordance with Article 107.

Chapter II Supervisory activities

Article 134 [Repealed]

Chapter III Banks and banking groups

Article 135 (Offences under company law)

1. The provisions of Title XI of Book V of the Civil Code shall apply to persons performing administrative, managerial or control functions in banks, including those not formed as a company.

Article 136 (Obligations of banks' corporate officers)

1. Persons performing administrative, managerial or control functions in a bank may not contract obligations of any kind or enter directly or indirectly into purchase or sale agreements with the bank which they administer, manage or control without a prior resolution adopted unanimously by the administrative body and the favourable vote of all the members of the control body, without prejudice to the obligations established by the Civil Code concerning the interests of directors and transactions with related parties.

2. The same provisions shall apply to persons performing administrative, managerial or control functions in a bank or company belonging to a banking group with regard to the obligations and agreements referred to in paragraph 1 entered into with such company and to loans contracted with other companies or banks belonging to the group. In such cases the obligation or agreement must be approved in the manner provided for in paragraph 1 by the governing bodies of the contracting company or bank and have the consent of the parent undertaking.

2-bis. For the purposes of the application of paragraphs 1 and 2, obligations contracted with companies controlled by the persons referred to in such paragraphs or at which such persons perform administrative, managerial or control functions, as well as with companies controlled by or controlling such companies shall be considered. The provisions of this paragraph shall not apply to obligations contracted between companies belonging to the same banking group or between banks in respect of transactions on the interbank market.

3. Non-compliance with the provisions of paragraphs 1, 2 and 2-bis shall be punished by imprisonment for a term of between one and three years and by a fine of between 206 and 2,066 euro.

Article 137 (False representations to banks)

1. [Repealed]

1-bis. Unless the act constitutes a more serious offence, persons who, for the purpose of obtaining credit for themselves or for the firms they administer or of modifying the conditions on which credit was first granted, fraudulently provide a bank with false figures or information regarding the incorporation or the profits and losses, assets and liabilities or financial situation of the firms interested in such credit, shall be punished by imprisonment for a term of up to one year and by a fine of up to 10,000 euro.

2. Unless the act constitutes a more serious offence, persons performing administrative or managerial functions in a bank and bank employees who, for the purpose of granting credit or causing credit to be granted, modifying the conditions on which credit was first granted or avoiding the revocation of the credit granted, knowingly fail to report figures or information in their possession or who, during the examination of a credit application, use false information or figures on the incorporation or the profits and losses, assets and liabilities or financial situation of the applicant shall be punished by imprisonment for a term of between six months and three years and by a fine of up to twenty million lire (10,329 euro).

Article 138 [Repealed]

Chapter IV Holdings

Article 139 (Holdings in banks, parent financial companies and financial intermediaries)

1. Omission of applications for authorization under Article 19, violation of the notification requirements established by Article 20, paragraph 2, and violation of the provisions of Article 24, paragraphs 1 and 3, Article 25, paragraphs 3 and 4, Article 108, paragraphs 3 and 4, and Article 110, paragraph 4, shall be punished by a pecuniary administrative sanction of between 5,164 and 51,645 euro.

2. Unless the act constitutes a more serious offence, any person who makes false representations in applications for authorization under Article 19 or in notifications under Article 20, paragraph 2, shall be punished by imprisonment for a term of up to three years.

3. The pecuniary administrative sanctions established by paragraph 1 and the penalties established by paragraph 2 shall apply to the same violations with respect to holdings in parent financial companies.

Article 140 (Notifications concerning holdings in banks, companies belonging to a banking group and financial intermediaries)

1. Omission of notifications provided for in Article 20, paragraphs 1, 3, first sentence, and 4, Article 21, paragraphs 1, 2, 3 and 4, Article 63 and Article 110, paragraphs 1, 2 and 3, shall be punished by a pecuniary administrative sanction of between ten million (5,164 euro) and one hundred million lire (51,645 euro).

2. Unless the act constitutes a more serious offence, any person who makes false representations in notifications referred to in paragraph 1 shall be punished by imprisonment for a term of up to three years.

Chapter V Other sanctions

Article 141 (False notifications concerning financial intermediaries)

1. Unless the act constitutes a more serious offence, notifications under Article 106, paragraphs 6 and 7, containing false statements shall be punished by imprisonment for a term of up to three years.

Article 142 [Repealed]

Article 143 [Repealed]

Article 144 (Other pecuniary administrative sanctions)

1. Persons performing administrative or managerial functions and employees shall be liable to a pecuniary administrative sanction of between one million (516 euro) and fifty million lire (25,822 euro) for non- compliance with the provisions of Articles 18, paragraph 4, 26, paragraphs 2 and 3, 34, paragraph 2, 35, 49, 51, 53, 54, 55, 64, paragraphs 2 and 4, 66, 67, 68, 106, paragraphs 6 and 7, 107, 109, paragraphs 2 and 3, 114- quater, 129, paragraph 1, 145, paragraph 3, 147 and 161, paragraph 5, or with the related general regulations or particular measures issued by the credit authorities.

2. The sanctions established by paragraph 1 shall also apply to persons performing control functions for violation of the provisions referred to in paragraph 1 and for failure to ensure compliance with such provisions by others. For violation of Articles 52 and 61, paragraph 5, and 112, the sanction established by paragraph 1 shall apply.

3. Persons performing administrative or managerial functions, employees and persons referred to in Article 121, paragraph 3, shall be liable to a pecuniary administrative sanction of between two million (1,032 euro) and twenty-five million lire (12,911 euro) for non-compliance with the provisions of Articles 116 and 123 or with the related general regulations or particular measures issued by the credit authorities.

4. Persons performing administrative or managerial functions, employees and persons referred to in Article 121, paragraph 3, shall be liable to a pecuniary administrative sanction of up to one hundred million lire (51,645 euro) for non-compliance with the provisions of Article 128, paragraph 1, or for obstructing the control functions provided for in that Article. The same sanction shall apply to the spurious splitting of a single consumer credit agreement into multiple agreements where at least one is for an amount less than the lower limit established by Article 121, paragraph 4, subparagraph a).

5. The pecuniary administrative sanctions established for employees by paragraphs 1, 3 and 4 shall also apply to persons working under contracts whereby they are inserted into the bank’s organization, even in a form different from salaried employment.

6. [Repealed]

Chapter VI General provisions concerning administrative sanctions

Article 145 (Sanction procedures)

1. For the violations referred to in this Title punishable by an administrative sanction, the Bank of Italy or the UIC within the scope of their respective authority, having notified the charges to the interested persons and the interested bank, company or entity, considered briefs submitted within thirty days and taken account of the totality of information gathered, shall apply the sanctions with a reasoned measure.

2. [Repealed]

3. The measure imposing sanctions pursuant to Article 144, paragraphs 3 and 4, shall be published in abridged form within thirty days of its notification, by and at the expense of the bank, company or entity with which those responsible for the violations are connected, in at least two daily newspapers of national circulation of which one shall be an economic newspaper. The measure imposing other sanctions provided for in this Title shall be published in abridged form in the Bulletin referred to in Article 8.

4. Appeal from the measure applying the sanction may be taken to the Court of Appeal of Rome. The appeal must be communicated to the authority that issued the measure within thirty days of the notification of the measure appealed from and must be filed with the clerk of the Court of Appeal within thirty days of such communication.

5. Appeal shall not suspend execution of the decree. Where serious reasons exist, the Court of Appeal may order suspension in a ruling stating the grounds for the decision.

6. At the request of the parties, the Court of Appeal shall establish time limits for the submission of memoranda and documents and may grant a hearing with or without the personal appearance of the parties.

7. The Court of Appeal shall decide upon the appeal in camera, having heard the public prosecutor, in a ruling stating the grounds for the decision.

8. A copy of the Court’s ruling shall be sent by the clerk of the Court of Appeal to the authority that issued the measure, inter alia for publication in abridged form in the Bulletin referred to in Article 8.

9. Collection of the sanctions referred to in this Title shall be effected by means of the role according to the time limits and procedures established by Presidential Decree 602 of 23 September 1973 as amended by Legislative Decree 46 of 26 February 1999.

10. The banks, companies or entities with which those responsible for violations are connected shall answer for payment of the pecuniary sanction and shall be held to the exercise of the right of recourse against those responsible for the violation.

11. The provisions of Article 16 of Law 689 of 24 November 1981 shall not apply to the pecuniary administrative sanctions provided for in this Title.

TITLE IX TRANSITIONAL AND FINAL PROVISIONS

Article 146 (Oversight of payment systems)

1. The Bank of Italy shall promote the regular operation of payment systems. For this purpose it may issue regulations to ensure the efficiency and reliability of clearing and payment systems.

Article 147 (Other powers of the credit authorities)

1. The credit authorities shall continue to exercise, with respect to all banks operating in Italy, the powers established by Article 32, first paragraph, subparagraphs d) and f), and Article 35, second paragraph, subparagraph b), of Royal Decree Law 375 of 12 March 1936, ratified with amendments by Law 141 of 7 March 1938 and subsequent amendments.

Article 148 [Repealed]

Article 149 (Banche popolari)

1. Banche popolari existing on 20 March 1992 shall, within five years of that date, alter the face value of their shares to conform with the value established by paragraph 2 of Article 29.

2. Members of banche popolari who on 20 March 1992 held shares exceeding the limit established by paragraph 2 of Article 30 but with a face value not exceeding fifteen million lire (7,746.85 euro) may continue to hold such shares.

3. Within three years of the entry into force of this Legislative Decree, consorzi economici a garanzia limitata which engage in banking must be transformed into società per azioni or banche popolari, or adopt resolutions for mergers with banks that result in such companies or banks. Resolutions of the general meetings on such matters shall be adopted by the majorities established by the bylaws for amendments thereto; where in relation to the object of such amendments the bylaws provide for different majorities, the smallest shall apply. Members' right of withdrawal shall not be affected.

Article 150 (Banche di credito cooperativo)

1. Banche di credito cooperativo formed before 1 January 1993 may maintain their original name provided the expression credito cooperativo is added to it.

2. Banks referred to in paragraph 1 shall comply with the provisions of Articles 33, paragraph 1, 34, paragraphs 1 and 2, and 35, paragraph 2, of this Legislative Decree by 1 January 1997. The necessary amendments to bylaws shall be approved by the majorities established therein for resolutions of ordinary general meetings.

3. Banche di credito cooperativo formed before 22 February 1992 shall not be held to comply with the provisions of Article 33, paragraph 4, concerning the lower limit of the face value of shares.

4. Paragraph 3 of Article 21 of Law 59 of 31 January 1992 as substituted by paragraph 9 of Article 42 of Legislative Decree 481 of 14 December 1992 shall be substituted by: “3. Articles 2, 7, 9, 11, 12, 14, paragraph 4, 18, paragraphs 3 and 4, and 21, paragraphs 1 and 2, of this Law shall apply to banche di credito cooperativo.”

5. The Bank of Italy shall issue instructions for gradual compliance with the requirements of Article 35, paragraph 1, by banche di credito cooperativo whose outstanding loans to non-members at the close of the 1992 financial year exceeded the limit.

6. The provisions of Article 37 shall apply from the approval of the financial statements for 1993. The necessary amendments to bylaws shall be adopted by the majorities established therein for adoption of resolutions by ordinary general meetings.

Article 150-bis (Provisions concerning banche cooperative)

1. The following provisions of the Civil Code shall not apply to banche popolari and banche di credito cooperativo: Articles 2346, sixth paragraph, 2349, second paragraph, 2513, 2514, second paragraph, 2519, second paragraph, 2522, 2525 first, second, third and fourth paragraphs, 2526, 2527, second and third paragraphs, 2528, third and fourth paragraphs, 2530 second, third, fourth and fifth paragraphs, 2538, second paragraph, second sentence, third and fourth paragraphs, 2540, second paragraph, 2541, 2542 first and fourth paragraphs, 2543, 2544 second paragraph, first sentence and third paragraph, 2545-bis, 2545-quater, 2545- quinquies, 2545-octies, 2545-decies, 2545-undecies third paragraph, 2545- terdecies, 2545-quinquiesdecies, 2545-sexiesdecies, 2545-septiesdecies and 2545-octiesdecies.

2. The provisions of Articles 2512, 2514 and 2530, first paragraph, of the Civil Code shall not apply to banche popolari.

3. The provisions of Articles 7 and 9 of Law 59 of 31 January 1992 shall continue to apply to banche di credito cooperativo insofar as they are compatible.

4. The bylaws of banche di credito cooperativo shall contain the clauses provided for by Article 2514, first paragraph, of the Civil Code.

5. Article 2545-undecies, first and second paragraphs, of the Civil Code shall apply in all cases of merger provided for by Article 36.

6. The articles of association of banche popolari and banche di credito cooperativo may establish, laying down the criteria to be adopted, the distribution of patronage refunds in accordance with the provisions of Article 2545-sexies of the Civil Code.

7. The time limit for amending the bylaws of banche di credito cooperativo to incorporate the new provisions of paragraph 2-bis of Article 52 shall be 30 June 2005.

Article 151 (Banks still having public-law status)

1. The operations, organization and functioning of the remaining banks having public-law status shall be governed by this Legislative Decree, their bylaws and any other provisions referred to therein.

Article 152 (Casse comunali di credito agrario and monti di credito su pegno di seconda categoria)

1. By 1 January 1996 casse comunali di credito agrario and monti di credito su pegno di seconda categoria which may not accept deposits from the public must take the necessary steps leading to the cessation of their credit activities or to their dissolution. At the expiry of such limitation period, the banks that have not complied shall be placed in liquidation.

2. Pending the adoption of the measures referred to in paragraph 1, monti di credito su pegno di seconda categoria which may not accept deposits from the public may continue to engage in the activity of granting pledge loans. Such entities shall be subject to the provisions of this Legislative Decree insofar as they are compatible.

Article 153 (Provisions concerning specific credit transactions)

1. Pending the issue by the Bank of Italy of the regulations referred to in Article 38, paragraph 2, the relevant provisions of preceding laws shall continue to apply.

2. The provisions governing mortgage bonds, although abrogated, shall continue to apply to such bonds still in circulation, except for those providing for intervention by the Bank of Italy.

3. Non-banks authorized to effect agricultural credit transactions shall continue to engage in such activity within the limits specified in their respective authorizations.

4. Where national and regional laws refer to the provisions of Royal Decree Law 1509 of 29 July 1927, ratified with amendments by Law 1760 of 5 July 1928, or to those of the Ministerial Decree of 23 January 1928 and subsequent amendments, they shall continue to be supplemented by such provisions.

5. Pending the completion of the agreements referred to in Article 47, existing provisions concerning the allocation and management of public funds for supporting credit shall continue to apply.

Article 154 (The Interbank Guarantee Fund)

1. The provisions of Article 22 of Presidential Decree 601 of 29 September 1973 shall apply to the Fund, the Special Section and the Guarantee Section for Fishing Credit referred to in Article 45.

Article 155 (Persons operating in the financial sector)

1. Persons who engage in the activities referred to in Article 106, paragraph 1, shall comply with the provisions of paragraph 2 and paragraph 3, subparagraph b), of that Article within eighteen months of the entry into force of this Legislative Decree.

2. Article 107 shall also apply to the financial companies for innovation and development provided for in Article 2 of Law 317 of 5 October 1991.

3. Pawnbrokers referred to in the third paragraph of Article 32 of Law 745 of 10 May 1938 shall be subject to the provisions of Article 106.

4. Confidi,1 including confidi di secondo grado shall be entered in a special section of the register established by Article 106, paragraph 1. Entry in the section shall not authorize them to effect transactions restricted to 1 Confidi are entities that engage in the provision of collective guarantees for loans, using resources received entirely or in part from the member undertakings for the mutual and entrepreneurial provision of guarantees in order to facilitate the granting of loans by banks and other persons operating in the financial sector. Confidi di secondo grado are consortia with external activities, cooperative companies, consortium companies limited by shares, private limited consortium companies or cooperatives established by confidi or by their member undertakings or other companies. financial intermediaries entered in such register. Title V of this Legislative Decree shall not apply to such entities.

4-bis. The Minister for the Economy and Finance, after consulting the Bank of Italy, shall establish the objective criteria concerning the volume of financial business and capital for determining which confidi shall be required to be entered in the special register established by Article 107. The Bank of Italy shall issue a measure establishing the elements to be considered in calculating the volume of financial business and capital. In order to be entered in the special register, the confidi shall adopt one of the legal forms provided for in Article 106, paragraph 3.

4-ter. The confidi entered in the special register shall primarily engage in the business of providing collective loan guarantees.

4-quater. The confidi entered in the special register may engage, primarily with the member undertakings, in the following activities: a) the provision of guarantees to tax authorities for the purposes of executing tax rebates to the member undertakings; b) the management, pursuant to Article 47, paragraph 2, of public funds for loan support; c) the making of contracts, pursuant to Article 47, paragraph 3, with banks receiving public guarantee funds to govern relationships with the member undertakings in order to facilitate access to such funds.

4-quinquies. The confidi entered in the special register may, on a residual basis and within the limits established by the Bank of Italy, engage in the activities reserved to the financial intermediaries entered in such register.

4-sexies. The provisions of Articles 107, paragraphs 2, 3, 4 and 4-bis, 108, 109, 110 and 112 shall apply to the confidi entered in the special register. The Bank of Italy shall order the deletion from the special register in the event of serious violations of laws or the regulations issued pursuant to the provisions of this Legislative Decree; Article 111, paragraphs 3 and 4 shall apply.

5. Persons who engage on a professional basis in money-changing, consisting in spot negotiation of means of payment in foreign currency, shall be entered in a special section of the register established by Article 106, paragraph 1. The provisions of Articles 106, paragraph 6, 108, 109 referring to the integrity requirements, and 111 shall apply to such persons. Entry in such section shall not entail authorization to engage in other business reserved to financial intermediaries. The Minister for the Economy and Finance, after consulting the Bank of Italy and the UIC, shall issue measures implementing this paragraph, specifying, in particular, the activities that may be performed jointly with money-changing. The Minister for the Economy and Finance shall also establish provisional rules governing the authorizations already granted to money-changers pursuant to Article 4, paragraph 2, of Decree Law 143 of 3 May 1991, ratified with amendments by Law 197 of 5 July 1991.

6. Persons other than banks, already operating at the date of entry into force of this provision, who on a non-profit-basis traditionally raise funds of modest amount and grant small loans may continue to carry on their activity, considering its marginal nature, in compliance with the operating procedures and quantitative limits established by the Credit Committee.

Article 156 (Amendment of legislative provisions)

1. Article 10 of Decree Law 143 of 3 May 1991, ratified with amendments by Law 197 of 5 July 1991, shall be substituted by: “Article 10 (Duties of the board of statutory auditors). - 1. Without prejudice to the provisions of the Civil Code or special laws, the members of the boards of statutory auditors of the intermediaries referred to in Article 4 shall control compliance with the provisions of this Decree. A copy of the findings and objections of the board of statutory auditors concerning violations of the provisions referred to in Chapter I of this Decree shall be transmitted within ten days to the Minister of the Treasury. Omission of transmission shall be punished by imprisonment for a term of up to one year and by a fine of between two hundred thousand lire (103 euro) and two million lire (1,032 euro).”

2. Article 1, paragraph 1, subparagraph c), of Law 52 of 21 February 1991 shall be substituted by: “c) the assignee is a bank or a financial intermediary governed by the 1993 Banking Law enacted pursuant to Article 25, paragraph 2, of Law 142 of 19 February 1992 whose corporate purpose includes factoring.”

3. Article 11, second paragraph, of Law 349 of 12 June 1973 shall be substituted by: by: “Non-compliance with the provisions of Article 9, first paragraph, shall be subject to the fine provided for in Article 144, paragraph 1 of the 1993 Banking Law enacted pursuant to Article 25, paragraph 2, of Law 142 of 19 February 1992. Article 145 of the 1993 Banking Law shall apply.”

4. Article 213 of Royal Decree 635 of 6 May 1940 shall be substituted “Article 213. – Objects not redeemed within thirty days of the expiry of the loan shall be sold at public auction according to the rules contained in Articles 529 ff. of the Code of Civil Procedure or by a different proceeding proposed by the agent and approved by the police.”

5. Paragraph 3 of Article 4 of Presidential Decree 148 of 31 March 1988 shall be substituted by: “3. Banks and other financial intermediaries shall carry out currency and foreign exchange transactions in compliance with the provisions governing them.”

6. Article 58 of Law 448 of 23 December 1998 shall be substituted by: “Article 58 (Bonds of società cooperative). 1. Società cooperative issuing bonds pursuant to Article 11 of Legislative Decree 385 of 1 September 1993 shall be subject to the provisions of Articles 2411ff. of the Civil Code and, where the conditions obtain, to auditing in the manner established by Article 15, paragraph 2, of Law 59 of 31 January 1992, as well as the provisions of Articles 114 and 115 of Legislative Decree 58 of 24 February 1998 insofar as they are compatible with the legislation on cooperatives.”.

7. In paragraph 1 of Article 3 of Law 489 of 26 November 1993 the words “, after consulting the Bank of Italy” shall be deleted.

Article 157 (Amendments to Legislative Decree 87 of 27 January 1992)

1. Article 1 of Legislative Decree 87 of 27 January 1992 shall be substituted by: “Article 1 (Scope). - 1. The provisions of this Decree shall apply: a) to banks; b) to management companies provided for in Law 77 of 23 March 1983; c) to parent financial companies of banking groups entered in the register; d) to companies provided for in Law 1 of 2 January 1991; e) to persons operating in the financial sector provided for in Title V of the 1993 Banking Law enacted pursuant to Article 25, paragraph 2, of Law 142 of 19 February 1992 and to companies engaging in financial activities referred to in Article 59, paragraph 1, subparagraph b), of the 1993 Banking Law.

2. The Minister of the Treasury, with regard to persons referred to in paragraph 1, subparagraph e), shall establish criteria for exemption from application of this Decree, with particular reference to the importance of the business of a financial nature in relation to the total business carried on, to the persons with whom the business is carried on, to whether or not the portfolio of participating interests is of a financial nature, and to the need to avoid disparate methods and techniques of presentation with a view to the drawing up of consolidated financial statements. 3. For the purposes of this Decree acquiring holdings for subsequent transfer shall be considered financial activity. 4. For the application of this Decree persons referred to in paragraph 1 shall be defined as credit and financial institutions. 5. For companies governed by Law 1 of 2 January 1991 the provisions of this Decree shall be implemented in consideration of the special nature of such Law by regulations issued by the Bank of Italy after consulting the Commissione nazionale per le società e la borsa (Consob).”

2. Article 4, paragraph 3, of Legislative Decree 87 of 27 January 1992 shall be substituted by: “3. For the purposes of this Decree control shall exist in the circumstances referred to in Article 59, paragraph 1, subparagraph a), of the 1993 Banking Law.”

3. Article 5 of Legislative Decree 87 of 27 January 1992 shall be substituted by: “Article 5 (Powers of the authorities). - 1. Credit and financial institutions shall comply with the regulations issued by the Bank of Italy on the layout of financial statements intended for the public, whether prepared on a solo or consolidated basis, and on the manner and time limits for the publication of financial statements. 2. The powers conferred by paragraph 1 shall also apply for amendments, additions and updates of the layouts established by this Decree and to the adaptation of Italian law to the law, principles and orientations of the European Community. 3. For persons operating in the financial sector and entered in the special register provided for in Article 107 of the 1993 Banking Law the instructions of the Bank of Italy shall be issued after consulting Consob. For companies referred to in Law 77 of 23 March 1983 the instructions of the Bank of Italy shall be issued after consultation with Consob. For companies referred to in Law 1 of 2 January 1991 the instructions shall be issued by the Bank of Italy after consulting Consob, in consideration of the special nature of such Law. 4. Regulations issued in the exercise of the powers established by this Article shall be published in the Gazzetta Ufficiale della Repubblica italiana”.

4. Article 11, paragraph 3, of Legislative Decree 87 of 27 January 1992 shall be substituted by: “3. The provisions of paragraph 2 shall apply to financial companies and entities which are part of banking groups entered in the register established pursuant to Article 64 of the 1993 Banking Law”.

5. Article 19, paragraph 1, of Legislative Decree 87 of 27 January 1992 shall be substituted by: “1. In alternative to what is provided for in Article 18, holdings in subsidiary undertakings and in undertakings over which a significant influence is exercised may be valued, with reference to one or more of the aforementioned undertakings, in accordance with the method specified in this Article. Significant influence shall exist where the investor undertaking disposes of at least one fifth of the voting rights exercisable at ordinary general meetings of the investee undertaking”.

6. Article 23, paragraph 1, subparagraph b), of Legislative Decree 87 of 27 January 1992 shall be substituted by: “b) the register of subsidiary undertakings and of those subject to significant influence within the meaning of Article 19, paragraph 1, held directly or through trust companies or nominees, indicating for each the name, head office, net worth, profit or loss for the latest financial year, percentage held and value attributed to the holding in the balance sheet;”

7. Article 24, paragraph 3, of Legislative Decree 87 of 27 January 1992 is repealed.

8. Article 25 of Legislative Decree 87 of 27 January 1992 shall be substituted by: “Article 25 (Parent undertaking) - 1. For the purposes of Article 24 a parent undertaking shall be: a) the parent credit institution or financial company of a banking group entered in the register established pursuant to Article 64 of the 1993 Banking Law; b) a financial institution that controls undertakings referred to in Article 28, paragraph 1, subparagraphs a) and b), and which is not in turn controlled by credit or financial institutions which are required to prepare consolidated financial statements. 2. Provisions concerning entities and companies that have issued securities listed on a stock exchange shall be unaffected.”

9. Article 26, paragraph 3, of Legislative Decree 87 of 27 January 1992 is repealed.

10. Article 26, paragraph 5, of Legislative Decree 87 of 27 January 1992 shall be substituted by: “5. Parent undertakings referred to in Article 25, including those managed on a unified basis within the meaning of paragraph 1 or paragraph 2 of this Article, shall draw up consolidated financial statements exclusively on the basis of paragraph 4, except in the case of parent banks or parent financial companies of banking groups entered in the register established pursuant to Article 64 of the 1993 Banking Law. Provisions concerning entities and companies that have issued securities listed on a stock exchange shall be unaffected.”

11. Article 27, paragraph 3, of Legislative Decree 87 of 27 January 1992 is repealed.

12. Article 28 of Legislative Decree 87 of 27 January 1992 shall be substituted by: “Article 28 (Undertakings included in the consolidation) - 1. The consolidation shall include the parent undertaking or the undertakings managed on a unified basis and subsidiary undertakings, wherever formed, provided the latter belong to one of the following categories: a) credit and financial institutions; b) undertakings that engage exclusively or primarily in instrumental activities as defined by Article 59, paragraph 1, subparagraph c), of the 1993 Banking Law. 2. The parent credit institution or financial company of a banking group entered in the register established pursuant to Article 64 of the 1993 Banking Law, shall include in the consolidation the undertakings constituting the group.”

13. Article 45 of Legislative Decree 87 of 27 January 1992 shall be substituted by: “Article 45 (Pecuniary administrative sanctions). — 1. - Persons performing administrative, managerial or control functions in credit and financial institutions shall be liable to a pecuniary administrative sanction of between one million lire (516 euro) and fifty million lire (25,822 euro) for violation of the provisions of Chapter I, Article 3; Chapter II, Sections I, II, III and V; Chapter III, Sections II and IV; Chapter IV, Article 41; Chapter V, Articles 42, paragraph 1, 43 and 46; as well as the measures referred to in Article 5. 2. – Article 145 of Legislative Decree 385 of 1 September 1993 shall apply. 3. – Paragraphs 1 and 2 of this Article shall apply to persons referred to in Article 1, paragraph 1, subparagraph e), only if they are entered in the special register established by Article 107 of Legislative Decree 385 of 1 September 1993.”

Article 158 [Repealed]

Article 159 (Special statute regions)

1. Supervisory evaluation shall be reserved to the Bank of Italy.

2. Where the administrative measures provided for in Articles 14, 31, 36, 56 and 57 fall within the authority of the regions, the Bank of Italy shall deliver, for purposes of supervision, a binding opinion.

3. The provisions of paragraphs 1 and 2 and of Articles 15, 16, 26 and 47 shall be mandatory and shall prevail over any previously issued contrary provisions. The powers of regional authorities for matters governed by Article 26 shall be unaffected.

4. Special statute regions which are granted powers in matters governed by Directive 89/646/EEC1 under the implementing provisions of their respective statutes shall adopt measures for the transposition of such Directive in accordance with the principles of the mandatory provisions contained in the preceding paragraphs.

Article 160 [Repealed]

Article 161 (Provisions repealed)

1. The following provisions are or remain repealed: - Royal Decree 646 of 16 July 1905; - Law 441 of 15 July 1906; - Royal Decree 472 of 5 May 1910; - Royal Decree 1620 of 4 September 1919; - Royal Decree Law 1709 of 2 September 1919, ratified by Law 1158 of 6 July 1922; - Royal Decree 932 of 9 April 1922; - Royal Decree Law 2283 of 7 October 1923; - Royal Decree Law 3148 of 15 December 1923, ratified by Law 473 of 17 April 1925; - Royal Decree Law 993 of 4 May 1924, ratified with amendments by Law 255 of 11 February 1926; - Royal Decree 2063 of 23 October 1925; - Royal Decree Law 1297 of 1 July 1926, ratified by Law 531 of 14 April 1927; - Royal Decree Law 1511 of 7 September 1926, ratified by Law 1107 of 23 June 1927; 1 Directive 89/646/EEC was repealed by Article 67 of Directive 2000/12/EC of 20 March 2000, which was in turn repealed by Article 158 of Directive 2006/48/EC of 14 June 2006, which incorporates the rules governing the taking up and pursuit of the business of credit institutions. - Royal Decree Law 1830 of 6 November 1926, ratified by Law 1108 of 23 June 1927; - Royal Decree Law 187 of 13 February 1927, ratified by Law 2537 of 22 December 1927; - Royal Decree Law 1509 of 29 July 1927, ratified by Law 1760 of 5 July 1928, and subsequent amendments; - The Ministerial Decree of 23 January 1928 and subsequent amendments. The provisions of paragraph 3 of this Article shall be unaffected; - Royal Decree Law 1817 of 5 July 1928, ratified by Law 3154 of 25 December 1928; - Royal Decree Law 2307 of 4 October 1928, ratified by Law 3040 of 13 December 1928; - Royal Decree 967 of 25 April 1929 and subsequent amendments; - Royal Decree 225 of 5 February 1931; - Royal Decree Law 693 of 19 March 1931, ratified by Law 1640 of 17 December 1931; - Royal Decree Law 1398 of 13 November 1931, ratified with amendments by Law 1581 of 15 December 1932; - Law 635 of 30 May 1932; - Royal Decree Law 721 of 24 May 1932, ratified by Law 1710 of 22 December 1932; - Law 805 of 30 May 1932; - Law 1281 of 3 June 1935; - Article 9 of Law 1143 of 13 June 1935; - Royal Decree Law 1883 of 4 October 1935, ratified by Law 225 of 9 January 1936; - Royal Decree Law 375 of 12 March 1936, ratified with amendments by Law 141 of 7 March 1938, and subsequent amendments, except for Title III and Articles 32, first paragraph, subparagraphs d) and f), and 35, second paragraph, subparagraph b); - Royal Decree Law 376 of 12 March 1936, ratified by Law 169 of 18 January 1937; - Royal Decree Law 2008 of 15 October 1936, ratified by Law 50 of 4 January 1937; - Royal Decree Law 1561 of 12 August 1937, ratified by Law 2352 of 20 December 1937; - Royal Decree 1706 of 26 August 1937 and subsequent amendments; - Royal Decree Law 204 of 24 February 1938, ratified with amendments by Law 778 of 3 June 1938; - Law 378 of 7 April 1938; - Law 745 of 10 May 1938, except for Articles 10, 11, 12, first and second paragraphs, 13, 14, 15 and 31; - Royal Decree Law 883 of 3 June 1938, ratified by Law 86 of 5 January 1939; - Royal Decree 1279 of 25 May 1939, except for Articles 37, 38, 39, 40, second and third paragraphs, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51 and 52; - Law 1797 of 16 November 1939; - Law 1922 of 14 December 1939; - Law 657 of 21 May 1940; - Law 933 of 10 June 1940; - Royal Decree 1955 of 25 November 1940; - Articles 2766 and 2778, subparagraphs 3 and 9, of the Civil Code, approved by Royal Decree 262 of 16 March 1942; - Viceregal Legislative Decree 226 of 14 September 1944; - Chapter III of Viceregal Legislative Decree 416 of 28 December 1944; - Chapters III and IV of Viceregal Legislative Decree 417 of 28 December 1944; - Legislative Decree 76 of the Provisional Head of State of 12 August 1946; - Legislative Decree 244 of the Provisional Head of State of 13 October 1946; - Legislative Decree 370 of the Provisional Head of State of 23 August 1946; - Royal Legislative Decree 453 of 29 May 1946; - Royal Legislative Decree 491 of 2 June 1946; - Legislative Decree 691 of the Provisional Head of State of 17 July 1947, except for Articles 3, 4, 5 and for the foreign exchange authority conferred on the Credit Committee by Article 1, first paragraph; - Legislative Decree 1418 of the Provisional Head of State of 15 December 1947; - Legislative Decree 1419 of the Provisional Head of State of 15 December 1947; - Legislative Decree 1421 of the Provisional Head of State of 15 December 1947; - Legislative Decree 105 of 10 February 1948 and subsequent amendments; - Legislative Decree 569 of 16 April 1948; - Law 474 of 29 July 1949; - Law 445 of 22 June 1950; - Law 717 of 10 August 1950; - Law 1095 of 17 November 1950; - Law 1350 of 27 November 1951; - Chapters V and VI of Law 949 of 25 July 1952, except for Articles 21, 37, 38, first and second paragraphs, 39, first paragraph, 40, first paragraph, and 41, second paragraph; - Law 3093 of 11 December 1952; - Law 101 of 24 February 1953; - Law 208 of 13 March 1953; - Law 298 of 11 April 1953; - Law 102 of 8 April 1954; - Law 742 of 31 July 1957; - Law 1295 of 24 December 1957 and subsequent amendments, except for Articles 2, fourth paragraph, 3, seventh paragraph, and 5; - Article 155 of Presidential Decree 645 of 29 January 1958; - Law 607 of 21 July 1959; - Law 1235 of 11 October 1960; - Law 1320 of 23 October 1960; - Law 39 of 3 February 1961; - Law 456 of 21 May 1961; - Law 562 of 27 June 1961; - Law 850 of 28 July 1961; - Law 1306 of 24 November 1961; - Law 265 of 30 April 1962; - Articles 1, 2, 3 and 4 of Law 1679 of 25 November 1962; - Presidential Decree 1907 of 12 December 1962; - Law 407 of 10 May 1964; - Law 627 of 5 July 1964; - Law 1244 of 31 October 1965; - Law 297 of 11 May 1966; - Law 1262 of 24 December 1966; - Articles 6, 7, 8 and 16 of Law 700 of 6 August 1967 and every other provision of such Law concerning the organization, functions and operations of the “Credit Section” of Banca Nazionale delle Comunicazioni; - Article 41 of Law 800 of 14 August 1967; - Law 1084 of 31 October 1967; - Law 1178 of 28 October 1968; - Law 120 of 27 March 1969; - Article 4 of Law 970 of 10 December 1969; - Law 866 of 28 October 1970; - Presidential Decree 896 of 21 August 1971; - Law 917 of 26 October 1971; - Law 1033 of 3 December 1971; - Law 848 of 5 December 1972; - Law 812 of 29 November 1973; - Presidential Decree 916 of 8 November 1973; - Law 75 of 11 March 1974; - Law 392 of 14 August 1974; - Law 395 of 14 August 1974; - Articles 11 and 12 of Decree Law 376 of 13 August 1975, ratified with amendments by Law 492 of 16 October 1975; - Article 2 of Law 492 of 16 October 1975; - Article 11 of Law 403 of 1 July 1977; - Law 23 of 10 February 1981; - Articles 10, 11 and 13 of Law 423 of 1 August 1981; - Article 15 of Law 72 of 19 March 1983; - Article 11 of Law 77 of 23 March 1983 and subsequent amendments; - Article 3 of Law 359 of 18 July 1984; - Law 360 of 18 July 1984; - Articles 12 and 21 of Law 49 of 27 February 1985; - Articles 9, 9 bis, 10, 11 and 21 of Law 281 of 4 June 1985 and subsequent amendments; - Law 114 of 17 April 1986; - Law 115 of 17 April 1986; - Article 2 of Law 458 of 27 October 1988; - Articles 1, 2, 3, paragraph 1, Article 4, paragraphs 1, 2, 3 and 4, Articles 5 and 6, paragraphs 2 and 3, and Articles 8 and 15 of Law 302 of 28 August 1989. The provisions of paragraph 2 of the present Article shall be unaffected; - Article 5 of Law 218 of 30 July 1990; - Title V of Law 287 of 10 October 1990 and subsequent amendments; - Article 18 and Title VII of Legislative Decree 356 of 20 November 1990; - Law 175 of 6 June 1991; - Article 6, paragraphs 1, 2, 2 bis, 4 bis, 5, 6, 8, 9 and 10, Article 7 and Article 8, paragraph 2 ter, of Decree Law 143 of 3 May 1991, ratified with amendments by Law 197 of 5 July 1991. The provisions of paragraph 2 of the present Article shall be unaffected. - Article 2, paragraph 6, of Law 317 of 5 October 1991; - Article 1 of Law 207 of 17 February 1992, without prejudice to the provisions of Article 2, paragraph 1, of such Law; - Legislative Decree 481 of 14 December 1992, except for Articles 43, 45 and 49, paragraphs 5 and 6; - Legislative Decree 528 of 30 December 1992.

2. The following provisions are repealed but shall continue to be applied until the entry into force of the regulations issued by the credit authorities pursuant to this Legislative Decree: - Article 36 of Law 454 of 2 June 1961; - Law 74 of 5 March 1985; - Presidential Decree 350 of 27 June 1985; - Articles 10, 11, 12, 13 and 14 of Law 302 of 28 August 1989; - Articles 23 and 24 of Law 428 of 29 December 1990; - Legislative Decree 301 of 10 September 1991; - Legislative Decree 302 of 10 September 1991, except for the tax provisions of Article 2, paragraph 5; - Article 2 of Law 52 of 21 February 1991; - Article 6, paragraphs 3 and 4, Article 8, paragraphs 1, 2 and 2 bis, and Article 9 of Decree Law 143 of 3 May 1991, ratified with amendments by Law 197 of 5 July 1991; - Chapter II, Section I, of Law 142 of 19 February 1992; - Law 154 of 17 February 1992, except for Article 10; - Decree 334 of 12 May 1992 of the Minister of the Treasury.

3. Articles 28 and 31 of the Ministerial Decree of 23 January 1928, as subsequently amended, shall continue to be applied until Article 152 of this Legislative Decree has been implemented. 3-bis. Paragraphs 4, 5 and 6 of Article 4 of Presidential Decree 148 of 31 March 1988 are repealed; nonetheless, they shall continue to be applied until the implementation of Article 155, paragraph 5, of this Legislative Decree.

4. All other provisions not compatible with this Legislative Decree are hereby repealed.

5. Regulations issued by the credit authorities pursuant to provisions which have been repealed or replaced shall continue to be applied until the entry into force of regulations issued pursuant to this Legislative Decree.

6. Contracts already completed and actions for execution in process at the entry into force of this Legislative Decree shall continue to be governed by the previous provisions.

7. Authorizations for holdings already allowed under the initial application of Title V of Law 287 of 10 October 1990 shall remain in effect unless revoked.

Article 162 (Entry into force)

1. This Legislative Decree shall enter into force on 1 January 1994.