Italian Securities Commission signs updated protocol with the Bank of Italy and IVASS on supplementary supervision of financial conglomerates

The Italian Securities Commission (Consob), the Bank of Italy and the Institute for the Supervision of Insurance (IVASS) have signed a memorandum of understanding covering the identification of financial conglomerates and the arrangements for their supplementary supervision. The protocol replaces the 31 March 2006 coordination agreement to reflect institutional changes, including the creation of the Single Supervisory Mechanism, and updates to the relevant regulatory framework. The protocol sets out how the authorities will cooperate and exchange information for the purposes of supplementary supervision and, as a framework agreement, allows the signatories to enter into further coordination arrangements for individual conglomerates. Given that the Single Supervisory Mechanism is responsible for prudential supervision of “significant” banks, the scope is limited to financial conglomerates that include “less significant” credit institutions, and it specifies operational methods for calculating quantitative thresholds used to assess the relative significance of the insurance sector and the banking and investment services sector within a group, taking into account the nature of the relevant ownership links.