CONSOB MiFID II authorisation — the SIM regime

Italy is one of the few EU markets where an investment-firm authorisation is granted by the conduct regulator and vetoed, in substance, by the prudential one. A Società di Intermediazione Mobiliare — a SIM — is authorised by CONSOB under Article 19(1) of the Testo Unico della Finanza, on the opinion of Banca d’Italia, and enters the register kept under Article 20 TUF. The initial-capital tier is decided by which MiFID services you choose, and one of the three tiers only exists if a specific restriction is written into your articles of association. This piece sets out the two-authority mechanics, the capital tiers as the regulation actually words them, what Banca d’Italia examines in its opinion, and three worked cases.

1. Who grants, who vetoes, who supervises

The split is not cosmetic. CONSOB issues the authorisation and owns conduct, market abuse, marketing communications and investor protection. Banca d’Italia owns prudential supervision — own funds, K-factors, large exposures, governance, ICT and the AML framework — and delivers the opinion that Article 19(1) TUF requires before CONSOB can grant.

The applicant files one dossier and two supervisors read it for different things. The content is not Italian-invented: Commission Delegated Regulation (EU) 2017/1943 prescribes what an investment-firm authorisation application must contain — Article 2(e) on capital, Article 5 on financial information, Article 6 on organisation. Banca d’Italia’s SIM regulation says plainly that it reviews the programme of activity and organisational structure on those articles, from the standpoint of sana e prudente gestione.

One step is routinely forgotten. Registration in the Article 20 TUF register is not the last act: after entry in the albo, the SIM must send Banca d’Italia the communication required by Article 13 of the CONSOB Intermediaries Regulation, on the form at Annex A of the SIM regulation, reporting the commencement — or cessation — of operations.

2. Legal basis

• Directive 2014/65/EU (MiFID II) and Regulation (EU) 600/2014 (MiFIR).
• Regulation (EU) 2019/2033 (IFR) and Directive (EU) 2019/2034 (IFD) — the prudential regime, including Article 9 on own funds and Article 12 on the small and non-interconnected test.
• Decreto Legislativo 24 February 1998 n. 58 — the TUF. Article 19 is the authorisation; Article 20 the register; Article 15 the qualifying-holding requirements; Article 11 the register of investment-firm groups.
• Commission Delegated Regulation (EU) 2017/1943 — the content of the application.
• CONSOB Regolamento Intermediari, adopted by Delibera n. 20307 — the conduct and operating rules.
• Banca d’Italia’s Regolamento in materia di vigilanza sulle SIM of 23 December 2022 — the Italian implementation of IFD.
• Commission Delegated Regulation (EU) 2022/1455 — the technical standards for the fixed-overheads own-funds requirement.

3. The initial-capital tiers, as the regulation words them

This is where second-hand summaries most often go wrong, because the tiers are not organised around “client money” and “own account” in the way people assume. The Banca d’Italia regulation sets initial capital by reference to the services the SIM intends to provide:

Two things follow. The €75,000 tier is an exclusivity test, not a menu: any service outside that list moves you to €150,000 at least. And the regulation requires the no-client-money limitation to be expressly provided for in the SIM’s articles of association — a constitutional restriction on the company, not a policy statement in the dossier.

The evidence of paid-up capital is prescribed too, and differs by route. A newly incorporated SIM satisfies Article 2(e) of Delegated Regulation (EU) 2017/1943 through an attestation from the general management of the bank holding the funds. An existing company seeking authorisation after amending its corporate object does so through chamber-of-commerce certificates evidencing subscribed and paid-up capital, attested by the company’s control body.

4. Class 1-minus, class 2, class 3

The Italian regulation uses the IFR categories directly, and the definitions are residual rather than positive, which is why firms misplace themselves.

• Class 1-minus — a SIM meeting the requirements of Article 1(2) IFR. A class 2 SIM authorised under Article 1(5) IFR is treated the same way.
• Class 3 — a SIM meeting the Article 12(1) IFR conditions to qualify as small and non-interconnected.
• Class 2 — defined as everything that is not class 1, class 1-minus or class 3. It is the default, not an election.

Class 3 status brings real relief: SIMs authorised under Article 6(1) IFR are disapplied, individually, from whole parts of the prudential regulation. But it is a status a firm can lose by growing — and not always its own growth.

5. The group rule that surprises people

Article 12(1) IFR is applied at group level for part of its conditions, and Banca d’Italia’s regulation spells out the consequences. Where SIMs belong to a group:

• The Article 12(3) and 12(4) IFR communications are made by the EU parent on behalf of the group’s SIMs where the group is entered in the register under Article 11 TUF, and otherwise by the SIM with the largest balance sheet.
• Losing the requirements in Article 12(1) points (a), (b), (h) and (i) ends class 3 classification for every SIM in the group.
• Losing the requirements in points (c) to (g) ends it only for the SIM that no longer meets them.

The regulation also requires the SIM to state the start and end dates of the twelve-month period referred to in the final subparagraph of Article 12(1). That is a monitoring obligation with a date stamp, not a year-end judgement.

6. What Banca d’Italia actually reads

Applicants tend to optimise the dossier for CONSOB and treat the prudential opinion as a formality. The regulation lists what Banca d’Italia examines in the programme of activity and the organisational structure, and it is a usefully concrete list:

• Coherence and completeness of the information, and the reliability of the forecasts — including against the reference market.
• Stability of income sources, and whether the programme secures capital, earnings and financial equilibrium.
• Sustainability of projected volume growth, judged against the services actually applied for.
• Compliance with capital-adequacy rules across the whole projection horizon, not only at launch.
• Adequacy of the organisational set-up and internal controls, given the specific services the SIM intends to provide.
• Effective capacity to pursue the stated strategy, in light of human, technological and organisational resources, the distribution network and the internal control system.
• Compliance with the governance regulation.

The stated test is whether the initiative amounts to an operator adequately structured organisationally and commercially, with resources qualitatively and quantitatively adequate to the risks typical of the activity. Banca d’Italia also assesses the Article 15 TUF requirements for holders of qualifying participations in the same opinion — so the shareholder file is prudential, not administrative.

7. Worked example — the advisory firm that wanted the €75,000 tier

Facts: a founding team plans a SIM offering investment advice and reception and transmission of orders to professional clients, executing through a third-party broker. It never intends to touch client assets. The draft articles of association carry a broad corporate object copied from a template.

Which rule applies: the €75,000 tier requires both that the SIM provides exclusively services from the listed set and that it does not hold client funds or financial instruments — and the regulation requires that limitation to appear expressly in the statuto.

What the practitioner does: rewrites the object clause before the notarial deed to state the services applied for and the express bar on holding client money and instruments; then tests the operating model against it, since an omnibus account in the SIM’s name would contradict the clause. Files a programme of activity describing the same perimeter, so statuto, dossier and fee model tell one story.

Outcome: the tier costs €675,000 less than the top one, and the price is a permanent constraint on the business model — a strategy decision, not incorporation paperwork.

8. Worked example — two placements, ten times the capital

Facts: a SIM plans to distribute bond issues for mid-market corporates. Commercially it is one product. Contractually the team is undecided between placing on a best-efforts basis and taking the paper on a firm-commitment basis when an issuer asks for certainty.

Which rule applies: placing without a firm commitment is inside the €75,000 list. Underwriting and/or placing on the basis of a firm commitment to the issuer sits in the €750,000 tier alongside dealing on own account. The distinction is the contractual form, not the size of the issue or the sophistication of the investor.

What the practitioner does: treats the firm-commitment option as a separate authorisation decision with its own capital consequence, and if it is genuinely optional, leaves it out of the initial application. If not, budgets €750,000 and builds the K-factor model accordingly, because the same choice pulls the firm towards class 2.

Outcome: a single word in the mandate template — commits, or uses best efforts — carries a ten-fold capital difference.

9. Worked example — the group that lost class 3 collectively

Facts: a group holds two Italian SIMs, both comfortably small and non-interconnected, and a larger EU investment firm. The larger firm’s balance sheet grows over a year and the group breaches one of the Article 12(1) IFR conditions measured at group level.

Which rule applies: where the breached condition is among points (a), (b), (h) and (i), class 3 classification falls away for every SIM in the group — including the two small Italian firms that changed nothing. Only breaches of points (c) to (g) are confined to the entity concerned.

What the practitioner does: monitors the Article 12(1) thresholds at group level, and assigns the communication duty correctly — to the EU parent where the group is registered under Article 11 TUF, otherwise to the SIM with the largest balance sheet. Tracks the twelve-month period with its start and end dates, since the regulation requires the SIM to report them.

Outcome: the two small SIMs move into class 2, with the full own-funds and reporting consequences, on the strength of an affiliate’s growth. A monitoring framework that looks only at the entity sees this arrive as a supervisory letter.

10. What switches on at grant

• The Article 13 Regolamento Intermediari communication to Banca d’Italia on Annex A, after entry in the Article 20 TUF register.
• MiFIR Article 26 transaction reporting to CONSOB.
• IFR/IFD prudential reporting through the Banca d’Italia framework — Segnalazioni di vigilanza and COREP-IFR — with the fixed-overheads requirement computed under Delegated Regulation (EU) 2022/1455.
• CONSOB conduct obligations: suitability, best execution, conflicts, inducements, product governance and complaints.
• AML obligations under D.Lgs. 231/2007, including UIF reporting.
• MiFID II passport notifications for cross-border services and branches.

FAQ

What to do, today

• Pick the capital tier before drafting the statuto, and if you want €75,000, put the express bar on holding client funds and instruments into the articles of association.
• Decide the firm-commitment question at board level, with the €750,000 figure written next to it.
• Build the dossier against Delegated Regulation (EU) 2017/1943 — Articles 2(e), 5 and 6 — rather than against a generic licensing template.
• Write the programme of activity for the prudential reader: show capital adequacy across the whole projection horizon, not only at launch, and tie resources to the services applied for.
• Monitor the Article 12(1) IFR thresholds at group level, assign the communication duty, and record the twelve-month period’s start and end dates.
• Diarise the Article 13 communication on Annex A for the moment you enter the albo.

Related: Investment firm in Spain — the CNMV route · AMF MiFID II authorisation in France · CONSOB MiFIR transaction reporting · EMI licence in Italy — the Banca d’Italia file · MiFID II best execution – the new RTS