Launch of Public Consultation

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

 Miscellaneous Amendments to the Existing Supervisory Provisions.

The proposed amendments include, in the order presented in the draft regulation, the following key points:
1. Revision of the special regulation on calendar provisioning for the stock of non-performing credit exposures:

• The definition of accounting provisions (now including partial write-offs);
• The definition of prudential provisions (which will shift from a deduction from regulatory capital to a capital absorption approach under a building block model);
• The definition of NPE ratio (to be calculated net of deposits with central banks and overnight deposits with other credit institutions);
• The Authority's intervention in cases of insufficient provisions relative to supervisory expectations (developed under a "second pillar" approach based on discussions between the bank and the central bank);

2. Extension of the “qualitative” approach for directors (as already applied to auditors), replacing the previous “quantitative” approach. This means removing the purely numerical, standardized limit on the accumulation of roles in favor of a more effective evaluation (first by the bank and then by the supervisory authority), considering both the overall business situation of the bank and the weight of each external role, while still ensuring adequate time availability;
3. Introduction of a Specific Integrative Test, accredited by BCSM and conducted in San Marino, for:

• Anyone newly registered in the San Marino Register, provided they have passed a foreign evaluation test for suitability;
• Insurance intermediaries already registered in the San Marino Register, as the sole requirement (by December 31, 2025) to meet the professional qualifications;

4. the simplification of the regulatory framework for insurance companies, bringing back within Regulation No. 2008-01 the provisions contained in Regulation No. 2017-07Simplification of the regulatory framework for insurance companies, by incorporating the provisions of Regulation No. 2017-07 (on internal management of separate accounts) and Circular No. 2017-02 (on informational obligations towards clients during the contract period) into Regulation No. 2008-01, with the corresponding abrogation of the other provisions;

5. Refinement of Regulation No. 2021-02 on the appointment processes of key personnel, introducing a maximum age limit (75 years) for such individuals, after which they must be replaced;

6. Autonomous publication of supervisory forms on the Central Bank's website (previously annexed to each sectoral regulation), making it easier to update these forms to meet operational needs and ensuring equal visibility and prior notice to supervised entities;

7. Introduction of an obligation for banks to issue cheque books (so-called "cheque books") that already include the clause "Non-transferable," unless the client explicitly requests the issuance of cheques without this clause. This aligns with the recommendation made by AIF in Circular Series Financial Entities No. 003 of November 12, 2020.

The consultation will end on December 27, 2024.

Contributions to the consultation can be sent to the following email address: vigilanza.regolamentare@bcsm.sm with the subject: “Regolamento Miscellanea - Consultazione"