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In view of a more efficient investor protection, on 8 January 2016, CONSOB launched the public consultation concerning the “Regulation on the alternative dispute resolution mechanism for financial disputes” (“ADR Regulation”).

The new mechanism envisages the creation of an entity (hereinafter “ADR Body”) along the line of the system already tested by Bank of Italy (the ABF – Arbitro Bancario Finanziario) and is based on the following cornerstones:

  • mandatory participation of the intermediaries to such system;
  • decision-making nature of the activity of the new ADR Body (deviating from the actual Conciliation and Arbitration Chamber, which carries out only an administrative function to manage the relevant proceedings);
  • access to the system free of charge for the investor;
  • maximum threshold of 500,000 Euro for disputes to be admissible;
  • short term (90 days) to reach a decision.

In order to simplify and speed up the relevant proceedings, an IT support system and a dedicated web site will be set up so to allow the direct interaction between investor, intermediary and ADR Body.

In case of failure to comply with the judgement issued by the ADR Body, the sanction applicable to intermediaries is merely of a reputational nature and it consists in the publication of such failure on the ADR Body web site, on two national newspapers and on the home page of the intermediary’s web site for a period of six months.

The rules governing the organisation and functioning of the Body contained in the consultation document, take into account the provisions of the Consumer Code setting out the requirements for arbitration proceedings to be recognized as ADR mechanisms pursuant the ADR Directive for consumers (2013/11/EU). Such rules will be implemented by Consob together with the ethic code of the ADR Body, after the adoption of the ADR Regulation.

Responses to the consultation may be submitted until 8 February 2016.

The consultation paper (in Italian language only) can be found at the following link: http://goo.gl/ZNfW1P

 

Legália is active in the field of financial and banking arbitration and some of its Partners are members of the ABF. We would be pleased to assist you, should you need any advice in submitting your response or any further clarification on the consultation document.

 

Contacts:

Vito Vittore
Senior Partner

Massimiliano Silvetti
Senior Partner

Domenico Parrotta
Senior Partner

Elena Pagnoni
Of counsel

Luigi Bonifacio
Associate