Laws and regulations Consob: sanctions regime and procedure

Laws and regulations Consob: Consob’s role? 

Consob (National Commission for Companies and the Stock Exchange) is an independent administrative authority, with an independent legal personality, which performs financial market supervisory functions, in terms of transparency and correct execution of the rules of conduct.

The role of Consob is to make sure that the supervised subjects, or the financial intermediaries, act in accordance with the law and the single financial text, in the appropriate ways and times, to allow investors and analysts to assess the risks of any investments.

The supervisory functions of Consob can be summarized as follows:

- regulatory supervision;

- information supervision;

- inspection supervision;

- sanctioning supervision.

There are different sectors where it carries out its supervisory function:

- regulated markets;

- management company;

- trading in regulated markets;

- trading systems other than regulated markets;

- systems of centralized management and of clearing, settlement and guarantee;

- services for the dissemination and storage of regulated information;

- authorized intermediaries;

- financial promoters;

- body for the maintenance of the Register of financial advisors;

- body of financial consultants;

- listed companies;

- parties that promote offers of financial products to the public;

- statutory auditors and legal auditing companies from entities acting in public interest.

Consob, in the criminal proceedings, exercises the rights and faculties recognized by the code of criminal procedure to the bodies and associations representing interests damaged by the crime.

With regard to relations with the judiciary (governed by the provisions of Article 187i of the TUF), Consob collaborates with the judicial authority through the exchange of information, in order to ascertain whether or not it constitutes a crime. In this sense, the public prosecutor who receives a crime report will inform the Consob President so that an assessment procedure is initiated as a result of which Consob will send a motivated report to the public prosecutor, as well as the documentation gathered while carrying out the aforementioned activity.

In the same way, the assessment activity can be boosted by the Body itself, or on the initiative of Consob employees in the performance of their functions.

Consob may become a civil party in the criminal proceedings and request compensation for the damage caused by crimes committed against the integrity of the financial market (Article 187j TUF).

For the purpose of carrying out the investigative activity, Consob may use the documents, data and news reported by the Financial Police.

Laws and regulations Consob: sanctions regime and sanctions procedure? 

Consob’s sanctioning procedure is of an administrative nature and therefore the principle applications are contained in law No. 241/1990.

The organizational unit responsible for the procedure is the Administrative Sanctions Office. The procedure takes place as follows:

- Letter of dispute of the objections.

The letter is to be forwarded within 180 days from the completed assessment or 360 days if the interested parties reside abroad. The deadline for the conclusion of the sanctioning procedure is 200 days and runs from the 30th day following the date of completion of the notification to the recipients.

- Right of defense of the recipients.

Recipients of complaints of Consob are allowed to present written deductions, documents, request for access to documents and a personal hearing.

- Preliminary phase.

The Administrative Sanctions Office, once received documents and defensive briefs, proceeds to examine them. At the end of the examination, a final report is drawn up where the reasons supporting the decision made and the sanctions to be taken are given. This is also done in relation to a possible filing.

The report must be sent to the Commission 35 days before the deadline for the conclusion of the procedure.

- Decision phase.

The report sent to the Commission must be simultaneously transmitted to the recipients, who may present counter-arguments.

The sanctioning procedure ends with the adoption by the Commission of the sanctioning provision, or the filing act, or the proposal for the application of a sanctioning measure under the competence of another administration.

Consob’s sanctioning measures, if intended for foreigners, must be translated in order to guarantee the exercise of the right of defense.

- Publication of the provision on the Consob bulletin.

Have you received a Consob sanctioning measure, or are you under investigation for a financial crime for violation of the rules governing financial markets, or would you like advice on financial law? Contact us.

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