The Bank of Italy published on its website a public consultation setting out guidelines to supplement general principles contained in the Crowdfunding Regulation.

In particular, the guidelines cover the following topics:

• corporate governance: governance measures and organisational set-up must ensure a prudent and effective management, proportional to the dimension and operational complexity of the CSP, including decision processes, effective internal communication flows, policies and procedures to ensure that the staff has adequate qualifications, knowledge and competence; the composition of the corporate bodies must be proportionate from a qualitative and quantitative perspective and must avoid overlapping competencies. The activity of the corporate bodies must be adequately documented and a control body, collegiate or monocratic, could be set-up.
• risk management and internal control system: must be proportionate to the envisaged activity to ensure sound and prudent management, including rules, functions, structures, resources, processes and procedures to ensure effective risk management and control and compliance with relevant rules. Specific guidelines are provided depending on whether only investment-based crowdfunding service is performed. Also, compliance and risks control and, if envisaged, internal audit, must be conducted with independence and impartiality.
• outsourcing: is possible provided that internal controls continue to be efficient also considering that the CSP is in any case liable and must be able to effectively supervise outsourced activities. Specific measures are to be taken in case key functions are outsourced;
• suitability of managers (i.e. individuals responsible for managing the CSP): they must meet probity, knowledge and competence requirements, to be assessed by the competent corporate body upon their appointment and promptly in case of amendments. In this respect, the activity already conducted on the basis of the current rules set out by Consob on equity crowdfunding would be relevant and should be subject to specific assessment by the competent corporate body;
• due diligence on project owners (i.e. individuals who raise funds through a CSP): in addition to criteria set out under Art. 4-sexies.1, para. 6 , lett. f) of legislative decree no. 58 of 24 February 1998 (the Consolidated Financial Act), the CSP may obtain the same documentation required to provide evidence of probity requirements for managers.

The guidelines are addressed to CSPs only (i.e. entities different from credit institutions, investment firms, payment institutions, electronic money institutions and financial intermediaries ex Art. 106 of legislative decree no. 385 of 1^st September 1993, the Consolidated Banking Act).

CSPs are not obliged to comply with the guidelines. However, in the event of adoption of measures other than those indicated in the guidelines, CSPs must communicate the specifics to the Bank of Italy when submitting the application of authorization and in the periodic reports.

Next steps

The public consultation will close on 16^th June 2023. The Bank of Italy will then analyse the contributions and comments to develop the final text of the guidelines.