The Supervisory Provisions for Transactions with Related Parties set forth in Bank of Italy Circular No. 285 of 17 December 2013, as subsequently amended (Section 3, Chapter 11), aims to control the risk that the proximity of certain parties to the decision-making bodies of a bank could compromise the impartiality and objectivity of decisions relating to the granting of loans to, and other transactions with, the former, resulting in possible interference in the resource allocation process, exposure of the bank to risks that are not adequately measured or monitored, and potential damage to depositors and shareholders.
To this end, the Supervisory Authority requires Banks and Parent Companies, in the case of banking groups, to adopt a system of controls for the management of such situations.
Therefore, the Group Regulation for the Management of Transactions with Related Parties has the purpose of regulating the identification, approval and execution of Transactions with Related Parties carried out by Cassa Centrale Banca - Credito Cooperativo Italiano S.p.A. and by the Companies of the Banking Group, as well as the organisational structures and internal control system adopted by the Group to preserve the integrity of decision-making processes in Transactions with Related Parties, ensuring constant compliance with the prudential limits and the decision-making procedures established by the Supervisory Provisions.
This Regulation also implements the provisions of Article 10.8 of the Cohesion Agreement, which requires the Parent Company to define “rules and criteria for carrying out the activities of Affiliated Banks in relation to organisational and corporate governance solutions to prevent conflicts of interest, with specific reference to the assumption of risks and other transactions with related parties”.
Finally, the Regulation in question must be read jointly with the other legal provisions aimed at preventing and adequately managing conflicts of interest in the banking and financial business.
In compliance with the Supervisory Provisions, the Parent Company approves and reviews its internal policies regarding controls on risk activities and conflicts of interest with Related Parties at least every three years.
Please note that the current version of the Regulation, approved by Board of Directors Resolution of 02/12/2021 with effect from 01/01/2022, also implements the provisions referred to in Article 88 of Directive 2013/36/EU, transposed into Italian law by the Bank of Italy with the issue of the 35th update of Circular No. 285.