The reform of the TUF sanctioning system
Reflections on some possible improvements
Article published in the magazine DB – Non solo Diritto Bancario available at this link
The contribution analyzes the main novelties of the draft decree implementing the delegation for the organic reform of the TUF sanctioning system in execution of the Capital Law (Legge capitali), hypothesizing possible improvements and more courageous choices that could be made in view of the final approval.
1. What is in the reform: expected reforms and possible improvements
Within the implementation scheme of the delegation for the organic reform of the sanctioning system (consisting of 7 articles) of the TUF, there are some of the main reforms that the delegating legislator aimed for when, with the law of March 11, 2025, it inserted Article 19-bis into the law of March 5, 2024, no. 21 (the so-called Capital Law); at the same time, some of these reforms are missing (mainly in criminal matters and regarding a “more appropriate enhancement” of the ne bis in idem principle), postponed to a subsequent text which, it appears, is in an advanced stage of drafting. Furthermore, the coordination intervention on the subject between various regulations of contiguous sectors (coordination between TUF and TUB, private insurance code, Legislative Decree 252/2005 on social security, Law 262/2005, Legislative Decree 39/2010 on auditing, and Legislative Decree 231/2007 on anti-money laundering) provided for by letter i) of the same Article 19-bis has not yet been carried out (as, moreover, clarified in the explanatory memorandum itself).
This article focuses on some of the main interventions present in the Draft, hypothesizing possible improvements and more courageous choices that could be made in view of the final approval. In this context, particular focus is placed on interventions – other than the most well-known ones (the introduction of new deflating instruments for litigation or the shift of jurisdiction over TUF sanctions to the Regional Administrative Court – TAR of Lombardy) – which have been less discussed but are also of great significance.
The hypotheses for amendment made here remain valid, even in light of the Opinion of the Joint Justice and Finance Committees of the Senate just issued, with respect to which they are consistent, although sometimes supplementary.
2. The generalization of the requirement of the significant nature of violations
The reform establishes, with the new Article 194-bis.01 and in implementation of letter a) of the delegation referred to in Article 19-bis, a fundamental principle of a general nature that both Consob and the Bank of Italy must follow when applying the sanctions provided for by the TUF: the condition of the significant nature (carattere rilevante) of the violation. For coordination purposes, the previous, more limited Article 194-sexies is simultaneously repealed, which had in fact received very little implementation.
This significant nature must be defined by the two authorities through regulations to be issued within 9 months of entry into force, based on certain criteria “which may also be alternative to one another” (impact of the conduct on the overall organization and on corporate risk profiles; systematic or widespread nature of the violations; significance of the danger to investor protection, the sound and prudent management of the company, or financial stability; impact on the timely exercise of supervisory functions or failure to comply with specific instructions issued by the competent Supervisory Authority; significance of the profit resulting from the violation or of the prejudice caused, provided it can be determined; impact of the conduct on the transparency or integrity of capital markets and corporate control). The reform, however, excludes from the application of the principle those violations for which the TUF provides a minimum sanction exceeding €10,000, which are not many, but include, for example, those of insider dealing and market manipulation (Articles 187-bis and 187-ter TUF), which provide for a minimum sanction of 20,000 euros (but not those, also implementing the EU Market Abuse Regulation – MAR – relating to the timing and content of “price-sensitive” press releases, where instead the minimum sanction is 5,000 euros).
It is recalled that a similar intervention had already been made starting from 2015 for some of the violations provided for by the Consolidated Banking Act (TUB), essentially in matters of transparency and fairness in relations with customers and, in a different but analogous way, anti-money laundering, with the insertion of Article 144, paragraph 8[1], and with the subsequent implementation within the provision governing the Bank of Italy sanctioning procedure (Provision of December 18, 2012 “Supervisory provisions on administrative sanctions and sanctioning procedures” as amended), which indicates guiding criteria partly similar to those provided for by the new article of the TUF[2], in which criteria more relevant to the field of financial intermediation are also present, such as “significance of the profit or prejudice” and “impact on the transparency and integrity of capital markets and corporate control”.
