Update on Reporting Regulations Pursuant to Art. 68 LISF

The Central Bank of the Republic of San Marino announces that on December 23, 2020, it issued Regulation No. 2020-05, entitled "Amendment to Regulation No. 2007-01 on the Reporting Procedures under Article 68 of Law No. 165 of November 17, 2005".

Article 68 has been amended by Article 17 of Delegated Decree No. 61 of March 29, 2019,  which introduced new paragraphs regarding reports commonly referred to as whistleblowing.

As stated at the beginning of the consultation process, which concluded on December 10 of the previous year, these types of reports differ significantly from traditional reports, now classified as complaints or denunciations:

• The following refers to reports submitted to the Supervisory Authority by "clients" (or consumer protection associations) to report alleged breaches or misconduct by supervised entities in their commercial relationships with these clients, which may have harmed the legal rights of the reporting party.
• The new whistleblowing reports are addressed to the Supervisory Authority by any party, including employees, collaborators, and representatives of the supervised entities, to report alleged violations of the provisions of the LISF or supervisory regulations, in all cases other than those that can be reported through formal complaints.

The measure adopts best practices in the field, while being inspired by the principle of operational simplification, with the aim of facilitating the responsible and nominative submission of such reports.

Regarding whistleblowing reports only, a model has also been prepared, which is non-binding but recommended, for submitting such reports, as well as the dedicated and confidential email address whistleblowing@bcsm.sm. It is, however, permissible to request a private hearing with the Supervisory Authority to provide oral testimony and sign what was recorded in the minutes.

This regulatory intervention, although limited in scope, represents a significant step as a measure to enhance the effectiveness and timeliness of supervisory actions, and as an additional alignment with European regulatory standards. This is particularly relevant considering that the "whistleblowing" framework has been incorporated into our legal system through the transposition of the EU legal acts under the current Monetary Convention.

To provide more comprehensive and readily accessible information on reports under Article 68, the Central Bank will also launch a dedicated section on its website.

The regulation will come into force on January 4, 2021.