The governance of transactions with Related Parties contained in Title V, Chapter 5 of the New Prudential Regulatory Provisions for Banks, pursuant to Bank of Italy Circular no. 263 of 27 December 2006, aims to protect against the risk that the proximity of certain subjects to the decision-making bodies of a bank may compromise the impartiality and objectivity of the decisions concerning the granting of loans and other transactions which concern them, with possible distortions in the resource allocation process, exposure of the bank to inadequately measured or monitored risks, as well as potential damage to depositors and shareholders.
To this end, the Supervisory Authority provides that banks and parent companies, in the case of a banking group, implement a system of controls to adequately manage such cases.
The Regulation therefore aims to govern the identification, approval and execution of Transactions with Related Parties, implemented by Cassa Centrale, by Affiliated Banks and by Group Companies, as well as the organisational structures and the internal control system on which the Group relies in order to preserve the integrity of decisional processes during Transactions with Related Parties, ensuring ongoing compliance with prudential limits and with decision-making procedures established by the Regulatory Provisions.
Specifically, the scope of the document is to govern:
- in Section I, the decision-making procedures which the Group has adopted in order to preserve the integrity of decision-making processes in Transactions with Related Parties;
- in Section II, the internal control policies put in place to regulate the organisational structures and the system of internal controls designed to preserve the integrity of the decision-making processes in the Transactions with Related Parties, ensuring ongoing compliance with the relevant prudential limits and with the decision-making procedures described in Section I.
The Parent Company approves and revises, at least every three years, the internal policies relating to controls on risk activities and on conflicts of interest with Related Parties, provided for under this Regulation.