Italy's implementation: Articles 28 and 29-ter TUF

Two regimes, two supervisors

Italian law distinguishes between third-country banks and third-country firms other than banks, and it assigns each category to a different authority. Article 28 TUF, headed "Imprese di paesi terzi diverse dalle banche", governs securities firms and similar undertakings. The establishment in Italy of a branch of such a firm is authorized by CONSOB after consulting the Banca d'Italia. Article 29-ter TUF governs third-country banks that wish to provide investment services, with or without ancillary services. For them the roles are reversed: the Banca d'Italia authorizes the branch after consulting CONSOB, and the provisions of the TUB on banking branches remain applicable alongside.¹ A Swiss private bank with a FINMA banking licence therefore deals with the Banca d'Italia, whereas a Swiss securities firm or a manager of collective assets licensed under the FinIA deals with CONSOB.

The distinction matters for Lugano because the canton's financial industry includes both kinds of institution. Chapter E.I describes the banks, among them the subsidiaries of foreign groups and the stock exchange banks (banche borsistiche), whereas Chapter E.III describes the independent asset managers and the managers of collective assets supervised under the FinIA. A portfolio manager within the meaning of Article 17 FinIA, which defines the activity, and licensed by FINMA under that Act counts as a third-country firm other than a bank for the purposes of Article 28 TUF, because Italian law looks at the services provided. Its licence category under Swiss law plays no role.² Article 28 paragraph 7-bis TUF adds that an undertaking which meets the criteria of a credit institution under Article 4 paragraph 1 point 1 letter b of Regulation (EU) No 575/2013 (the large investment firms that deal on own account or underwrite) falls under Article 29-ter.

The conditions for a branch

Article 28 paragraph 1 TUF lists the conditions on which CONSOB grants authorization for a branch, and Article 29-ter paragraph 1 applies the same conditions to banks. The firm must meet the requirements of Article 19 paragraph 1 letters d and f TUF on the integrity and professionalism of those who direct it. It must submit an activity programme describing the operations it intends to carry out and the organizational structure of the branch. It must be authorized and supervised in its home country, which must comply with the recommendations of the Financial Action Task Force (FATF). Cooperation agreements must exist between the Banca d'Italia, CONSOB and the home supervisors. Between Italy and the home country there must be an agreement on the exchange of tax information that respects the standard of Article 26 of the OECD Model Tax Convention. Finally the firm must belong to an investor compensation scheme recognized under Article 60 paragraph 2 TUF.³

The tax condition had long been an obstacle for Switzerland. Until the Protocol of 23 February 2015 amending the Swiss-Italian double taxation convention of 9 March 1976 entered into force, the convention contained no exchange of information on request to the OECD standard. The Protocol, described in Chapter E.II, removed this obstacle in 2016.⁴ The cooperation condition was met in 2023, when FINMA, CONSOB and the Banca d'Italia signed a memorandum of understanding on supervisory cooperation, which FINMA announced on 16 August 2023 as creating a formal framework for the exchange of information and greater legal certainty for institutions in their access to the Italian market.⁵ Since then the formal conditions for a branch and for authorization without a branch can be met by Swiss firms. What remains is the substantive branch requirement for retail clients.

Notes

1. TUF, Art. 28 para. 1 and Art. 29-ter para. 1, text at Brocardi.it, https://www.brocardi.it/testo-unico-intermediazione-finanziaria/parte-ii/titolo-ii/capo-iii/art28.html and https://www.brocardi.it/testo-unico-intermediazione-finanziaria/parte-ii/titolo-ii/capo-iii/ art29ter.html. Art. 29-ter para. 1 declares Art. 13 and 14-bis TUB applicable. ↩
2. Federal Act of 15 June 2018 on Financial Institutions (Financial Institutions Act, FinIA), SR 954.1, Art. 17 para. 1 (definition of the portfolio manager), English text at https://www.droit-bilingue.ch/en-de/9/95/954.1-17-20.html. The functional view of Italian law is an inference from the wording of Art. 28 TUF ("imprese di paesi terzi diverse dalle banche"). ↩
3. TUF, Art. 28 para. 1 lit. a–f (above). ↩
4. Convention between Switzerland and Italy for the avoidance of double taxation of 9 March 1976, SR 0.672.945.41, Art. 27, as amended by the Protocol of 23 February 2015, approved by the Federal Assembly on 18 March 2016 and in force by exchange of notes since 13 July 2016 (AS 2016 2769), text at https://www.droit-bilingue.ch/de-it/0.6/0.67/0.672.945.41-27-30.html; see Chapters E.II and H.III. ↩
5. FINMA, "FINMA, CONSOB e Banca d'Italia sottoscrivono un accordo di cooperazione", press release, 16 August 2023, https://www.finma.ch/it/news/2023/08/20230816-mm-mou-it-beh/. FINMA described the agreement as not legally binding. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of August 2025.