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Competitive and regulatory framework Social, technological, competitive and regulatory developments are constantly transforming the framework of our business areas.

Regulatory environment

The Contratto di Programma (Service Contract) regulates relations between the Ministry for Economic Development and Poste Italiane SpA regarding provision of the Universal Postal Service. Until 31 December 2019, the 2015-2019 Contratto di Programma took effect. On 30 December 2019, the Parties signed the new Contract for the years 2020-2024. The procedure for the approval by the European Commission of the sums due to the Company to partially cover the universal service cost is underway.
Italian Communications Authority (AGCom) Resolution 214/19/CONS regarding “Assessment of the net cost of the universal postal service for 2015 and 2016” was published on 2 July 2019. In addition to acknowledging that the Universal Postal Service cost is unfair and therefore worthy of compensation, the Resolution quantified the cost of providing the Universal Postal Service in 2015 and 2016, respectively, as €389 million and €356 million, compared with compensation of €329 million and €262 million provided for in the Contratto di Programma already collected by the Company. With the same Resolution, AGCOM also decided not to set up the Compensation Fund for those years with the consequent impossibility for Poste Italiane to recover the differences between the quantification of the cost and the state contributions. Therefore, in October 2019, the Company notified an appeal to the Lazio Regional Administrative Court against the above Resolution. Lastly, with Resolution 215/19/CONS also on 2 July 2019, the Authority announced that it had initiated an assessment of the net cost for 2017 and 2018.
Regarding state contributions for the editorial tariff concessions applied by the Company, on 22 July 2019, following the notification made by the Italian authorities in relation to the period 2017-2019, the European Commission approved, under EU state aid rules, public service compensation to Poste Italiane for a maximum amount of €171.74 million. 
The Budget Law 2020 (Law no. 160 of 27 December 2019) redefined the appropriations for the reimbursement of publishing subsidies, providing for a value of €53.1 million for 2020, €53.2 million for 2021 and €52.5 million for 2022. 
Decree Law 162 of 30 December 2019 - as converted by Law no. 8 of 28 February 2020 - lastly ordered that reimbursements of publishing tariff subsidies to Poste Italiane continue “for a duration equal to that of the universal postal service” (i.e. until April 2026). The application of the regulation is subject to approval by the European Commission.
In 2019, AGCom defined the new regulatory framework for judicial acts and offences regarding the Highway Code in line with the legal provisions of 2018 and 2019 (market liberalisation, digitisation). 

Evolution of the regulatory scenario 

In September 2019 and at the end of the parcel delivery services market analysis conducted among operators with the aim of defining the relevant markets for regulatory purposes and examining the effects of the growth of e-commerce, AGCom published Resolution 350/19/CONS in which it proposed to increase the level of regulatory oversight of the conditions for the provision of services by intervening in the current national regulatory framework with appropriate procedures to amend the existing rules on the transparency of the technical and economic conditions of offers, as well as the requirements and obliga-tions of licence holders, so that they are in line with and adapted to development in the sector.
In October 2019, AGCom launched an analysis of the mail services market and the maximum tariffs for universal postal ser-vices with the aim of updating the tariff system for universal services in light of the changing competitive environment and new user requirements. Participants have provided the regulator with the information requested, with a view to preparing a document to be submitted for consultation in the coming months. 

Regulatory environment

With reference to the regulatory areas with an impact on the activities of Patrimonio Destinato IMEL (EMI RFC), reference should be made to BancoPosta’s regulatory framework for cross-cutting issues of Transparency and PSD220, The other main regulatory updates during the year are set out below.


First, with the Order of 23 July 2019, the Bank of Italy updated the “Supervisory Provisions for Payment Institutions and Electronic Money Institutions” by amending, in implementation of the PSD2 and its implementing provisions, the previous Order of 17 May 2016.
In particular, with the new provisions the Authority has: (i) enriched and supplemented with detailed information the content of the Bank of Italy’s programme of activities to be submitted to the Bank of Italy and updated in accordance with the new requirements introduced by the PSD2; (ii) extended the application, with certain specifications, of the definition of “own funds” - introduced for banks and investment firms by the CRR “Capital Requirements Regulation” - to IP and EMI; (iii) Provided that Paying Institutions and EMI should have government policies and procedures for the management of the security of the provision of payment and e-money services, systems for the prevention and monitoring of security incidents and fraud, and procedures for the storage, monitoring, traceability and limitation of access to sensitive payment data; (iv) updated and inte-grated the content of the information that Italian institutions provide to the Bank of Italy if they intend to operate abroad; (v) introduced detailed provisions to regulate the provision of the new payment services provided by the PSD2, i.e. the payment order initiation service (PIS) and the account information service (vi) aligned the Supervisory Provisions with the new rules on the protection of customer funds provided by the TUB (Consolidated Law on Banking).
In addition, with reference to the anti-money laundering area, the Bank of Italy published:
  • on 27 March 2019, the new “Provisions regarding internal organisation, procedures and controls to prevent the use of inter-mediaries for the purposes of money laundering and the financing of terrorism”. The measure, which implements the provi-sions regarding organisation, procedures and internal controls contained in Legislative Decree no. 231/2007, as amended by the Anti-Money Laundering Directive, is applicable from 1 June 2019, with certain exceptions in force since 1 January 2020, including: (i) the requirement for corporate bodies to define and approve a sound policy that specifies the choices the party concerned has made regarding the organisational structure, procedures and internal controls, adequate verification and data storage); (ii) the requirement for the parent company to set up a common database); and (iii) the requirement to carry out a self-assessment of money laundering risks.
  • On 30 July 2019, the new “Customer due diligence provisions for combating money laundering and financing of terrorism”. This measure also implements the provisions contained in Legislative Decree no. 231/2007, as amended by the Anti-Money Laundering Directive, as well as the Joint Guidelines of the European Supervisory Authorities (ESAs) issued on 26 June 2017 on simplified and strengthened measures of adequate customer due diligence and on the factors that must be taken into account when assessing the risks of money laundering and financing of terrorism associated with individual ongoing relationships and occasional transactions. The new regulatory requirements have been in force since 1 January 2020. In relation to customers acquired before the entry into force of the Provisions for which the regulations in force under Legislative Decree no. 90/2017 established forms of exemption from the obligations of adequate due diligence, the Bank of Italy expects that any missing data and identification documents will be collected during the first useful contact, and in any case no later than 30 June 2020.
With regard to telecommunications, in January 2019, the Italian Communications Authority (AGCom) published Resolution 599/18/CONS, which concludes the regulator’s latest review of the termination services market21 for voice calls on individual mobile networks. The regulator has identified twelve relevant markets, one for each operator, including PosteMobile, having significant market power regarding the termination of voice calls on their mobile networks. The rate set for operators for the period 2018-2021 was obtained by revising the cost model previously adopted by the regulator in Resolution 60/11/CONS. The rate for 2019 has been reduced by 8% compared with the previous year, with additional progressive annual reductions until 2021 and symmetrical rates for all notified operators.
At EU level, by 31 December 2020 the Commission must adopt a delegated act supplementing the directive establishing the European Electronic Communications Code, defining a single maximum termination rate for voice calls on mobile and fixed networks within the European Union.

Regulatory environment

From 1 January 2019, the Guidelines regarding fraud data reporting requirements pursuant to the Payment Services Directive 2 (PSD2) have been applied, with payment service providers (PSPs) required to report detailed statistical data regarding frauds linked to the various forms of payment to their respective supervisory authorities, as well as the aggregated data the latter are required to share with the European Banking Authority (EBA) and the ECB. 
The Guidelines regarding strong customer authentication and standards for communications between PSPs and third par-ties also came into effect from 1 January 2019. In particular, PSPs may introduce a specific interface allowing third parties to access online payment accounts or adopt a solution supplied by an external provider.

Poste Italiane has opted for the latter solution which, moreover, allows it to request the Bank of Italy to grant an exemption from the application of a contingency mechanism to be used if the interface is unavailable or suffers disruption. BancoPosta submitted its request for exemption to the Bank of Italy on 14 March 2019, which was accepted by the Authority by order of 4 September 2019. With reference to the obligation for PSPs to adopt strong authentication systems to allow customers to make online arrangements, in August 2019, the Bank of Italy granted an extension for card payments compared to the deadline of 14 September 2019 originally foreseen for the entry into force of the PSD2.

The EBA, in its opinion of 16 October 2019, set 31 December 2020 as the deadline for this extension and the Bank of Italy, in a communication of 12 December 2019, asked the PSPs to communicate by 31 January 2020 their intention to make use of the extension and, if so, to provide a series of separate information according to the activity carried out (e.g. migration plans, customer communications initiatives, etc.). Poste Italiane has prepared and sent a document with the feedback to be provided to the Supervisory Authority within the prescribed time limits.
The “Final Report on EBA Draft Guidelines on outsourcing arrangements” was published on 25 February 2019. This aims to standardise the guidelines for outsourcing arrangements, which intermediaries must comply with by 31 December 2021. These Guidelines have already been applied in the “Regulation governing BancoPosta RFC’s contracting out and outsourcing process”, annexed to “BancoPosta’s Organisational and Operational Regulation”, approved by the Board of Directors at the meeting of 31 January 2019. 

Poste Italiane has also complied with the new provisions regarding “Transparency of banking and financial transactions and services. Fairness in dealings between intermediaries and customers”, which form an integral part of the general regulations governing organisational requirements and internal control systems, strengthening the organisational measures and controls that intermediaries (producers and the distributors of third-party products) are required to adopt in order to process, distribute, monitor and (if necessary) modify the products offered to customers. The requirements introduced by the new provisions have been applied in the “Product Governance guidelines” annexed to “BancoPosta’s Organisational and Operational Regulation” referred to above. Also, with regard to transparency requirements, further changes to the practical guidance for customers, consumer credit and consumer mortgages have been introduced in relation to the use of benchmarks and repayment meth-ods. In July 2019, Bank of Italy Provision no. 156 was published, which makes some amendments to the above mentioned Implementing Provisions of the PAD (Payment Account Directive), concerning payment accounts offered to consumers. The amendments in force since 1 January 2020 concern, inter alia, pre-contractual and periodic information documents.
In particular, two new documents to be provided to customers have been introduced, drawn up in accordance with the standard, non-modifiable models contained in the EU Commission Regulations: the Fee Information Document (FID) and the Statement of fees (SOF). Poste Italiane has completed the necessary adjustment activities.
The ESMA Guidelines issued on 6 November 2018 came into effect on 8 March 2019. The guidelines have clarified the applica-tion of certain aspects linked to the suitability requirements provided for in the MiFID II Directive, with adoption of the guidelines reflected in the process involved in customer profiling and in assessing the suitability of products.

On 11 April 2019, the CONSOB announced that it intends to comply with the ESMA Guidelines in force since 30 April 2019 regarding “Guidelines on internalised settlement reporting under article 9 of the Central Securities Depository Regulation (CSDR)”. EU Regulation 909/2014 (the CSDR) is the first European regulation governing the activities of central securities depositories (CSDs) and, among other things, defines settlement internalisers as entities (for example, banks) that execute transfer orders on their own account or on behalf of customers without using a system managed by a central counterparty. In order to monitor these transfers, which are also carried out by Poste Italiane, settlement internalisers must report specific aggregated data on internalised transactions to the CONSOB on a quarterly basis. The first report was submitted on 24 July 2019 and concerned internalized transactions in the second quarter of 2019. In this regard, Poste Italiane has, as permitted by the CONSOB, chosen to delegate the filing of such reports to an external provider.

On 23 September 2019, CONSOB published a consultation document amending the Intermediaries Regulation (Resolution no. 20307) in order to implement the Insurance Distribution Directive (IDD) which, in force in Italian law since 1 October 2018, introduced the rules of conduct applicable to the distribution of insurance investment products or IBIP (Insurance Based Investment Products), which will come into force on 1 April 2020. 

In addition, on the same date, IVASS published for consultation the draft Regulation containing provisions on Product Oversight Governance (POG) whose entry into force is set for 31 March 2020. These provisions require companies and intermediaries that manufacture and distribute insurance products to adopt specific processes for the design, review, monitoring, verification and distribution of each new insurance product, before it is distributed to customers, or of an existing insurance product, before the adoption of a significant change.

On 5 December 2019, a new Bank of Italy Regulation was published which, together with the CONSOB Intermediaries Regulation, completes the regulatory package for the implementation of the “MiFID2/MiFIR” with a view to allocating responsibilities between the Bank of Italy and CONSOB as defined by the Consolidated Law on Finance (TUF) and replaces, for the areas of competence, the “Joint Bank of Italy and CONSOB Regulation” however without introduc-ing substantial amendments.

Regulatory environment
Consultation Paper on the Opinion of the 2020 Review of Solvency II

The EIOPA (European Insurance and Occupational Pensions Authority) launched the public consultation on 15 October 2019 on the technical opinion requested by the European Commission for the review of Solvency II planned for 2020.
The consultation covers all areas of Solvency II legislation, such as the modification of the calculation of the Volatility Adjustment - a mechanism provided for in Solvency II to contain the effects of market volatility - or the proposal to increase the calibration of the interest rate risk sub-module, e.g. in line with the existence of negative interest rates. The public consultation phase ended on 15 January 2020. EIOPA will issue an update of the Solvency II regulations, which will be implemented by IVASS regulations by the end of 2020.

Measure IVASS no. 92 of 19 November 2019

The measure in question contains the amendments to IVASS Regulation no. 43 of 12 February 2019 implementing the provi-sions of the Decree of the Ministry of Economy and Finance of 15 July 2019, determined by the optional extension to 2019 of the provisions on the temporary suspension of losses in non-durable securities, already provided for by the previous Ministerial Decree (Decree Law no. 119 of 23 October 2018). The Poste Vita Group has decided not to make use of this option for 2019.