For a number of (obvious) reasons, banking and financial services are one of the most regulated sectors. When dealing with such sector in Italy, besides the usual concerns (e.g. data protection, secrecy etc.), it is necessary to take into account the Bank of Italy regulations.
Last 1 July 2013 the Bank of Italy issued an update of the “bank prudential supervision instructions” (disposizioni di vigilanza prudenziale per le banche, “Instructions”), also updating the rules on outsourcing contracts. Contrary to the other rules within the same Instructions, the new rules on outsourcing are already applicable.
The main principles and guidelines for outsourcing contracts remain in line with what already set out in the past and also with the MiFID regulations on investment services (from which the instructions largely draw inspiration).
So the main (and not new) principle to note remains that banks will not be allowed to delegate their responsibility to the outsourcer, and accordingly an adequate control mechanism will have to be set up.
As for the new obligations, the banks are now obliged to previously inform the Bank of Italy of the outsourcing agreements, by sending any information which will be necessary to let the Bank of Italy assess the compliance with the Instructions. The banks may choose to send either a copy of the agreement or the information required by Bank of Italy. Such obligation applies for (i) outsourcing of control functions and other (ii) “important” functions (such important functions not being defined).
The communication to the Bank of Italy will have to be made at least 60 days prior to proceeding with the instructions to the services provider. Within 60 days from receipt of the communication, the Bank of Italy will then decide whether to proceed with a formal review, which may also lead to a prohibition to proceed with the outsourcing. As for the existing outsourcing agreements, the communication shall be made (i) at the first coming renewal term, or, in any event, (ii) within 1 July 2016.
So, to avoid headaches when outsourcing within the banking and financial services, do not forget the Bank of Italy!