Launch of Public Consultation on the Regulation of Investment Services and Activities

The Central Bank of the Republic of San Marino announces the launch of a public consultation process on the following draft Regulation:

Regulations on Investment Services and Activities

This measure aims to achieve multiple objectives, including compliance with international commitments arising from the Monetary Agreement and the strengthening of investor protection measures. Additionally, it facilitates the establishment of a new category of financial intermediary - the investment firm - within the Republic of San Marino, thereby further expanding and diversifying the structure of the San Marino financial system.

The main aspects that characterize the measure can be identified as follows:

• Introduction of a comprehensive regulatory framework governing investment services and activities, specifically concerning the provision - also by banks and other authorized intermediaries - of the services and activities listed under items D1 to D7 of Annex 1 to Law No. 165/2005 (LISF), in implementation of Delegated Decree No. 61/2019 and the LISF itself, with the corresponding incorporation into the domestic financial system of the EU regulatory framework established by MiFID II-MiFIR (Directive (EU) No. 2014/65 and Regulation (EU) No. 600/2014) for such reserved activities;
• Introduction of a specific regulatory framework concerning investment firms, a new category of financial intermediary within the San Marino context, while also taking into account the latest EU provisions under the IFD-IFR framework (Directive (EU) 2019/2034 and Regulation (EU) 2019/2033);
• Introduction of a comprehensive regulatory framework on capital requirements for market risks, with specific reference to prudential supervision metrics, in implementation of Delegated Decree No. 50/2019 and the LISF. This framework transposes into the domestic financial system the EU rules on capital requirements for market risks under the standardized approach set out in Regulation (EU) No. 575/2013, ensuring alignment with international standards and extending its application to banks as well.

The measure, considering the adjustments required of financial intermediaries already providing investment services and activities in the Republic, establishes transitional provisions under a phase-in approach regarding the effective date of the newly introduced provisions.

Regarding the drafting technique, the measures are supplemented in several areas by additional EU provisions, primarily through secondary legislation, to which direct reference has been made.

Given the scope of the measure, the consultation will conclude on May 10, 2024.

Any contributions to the consultation may be submitted to the following email address: dipartimento.vigilanza@bcsm.sm with the subject line: “Consultation on the Regulation of Investment Services and Activities.”