What is a financial company under Art. 106?
Source: Bank of Italy
FINANCIAL INTERMEDIARIES UNDER ART. 106 - Qualification of the activity
The Business of loan lending, equity participation and brokerage in foreign exchange, as defined by the Decree of the Ministry of the Economy and Finance of 17/2/2009, n. GU of 3.4.2009 SG n.78) is restricted to financial intermediaries registered in the general list provided for by Article 112 TUB Code.
For loan and money lending business whatsoever, it is intended (Art. 3 of Ministry Decree No. 29 of 17/2/2009) the granting of credits, including the issuing of guarantees which substitute a credit and a compulsory signature. This business includes, among other things, all types of financing connected with operations such as:
- purchase of receivables;
- consumer credit, as defined by article 121 of the TUB Code, except for the technical form of deferred payment of the price carried out by parties authorised to sell goods and services in the territory of the Republic;
- mortgage credit;
- issuance of personal guarantees, endorsement, documental opening of credit line, banking acceptance, transfer, credit agreement, as well as any other sort of issuing guarantees and commitments. The sureties and other signing commitments provided for in exclusive supply contracts and issued solely to banks and financial intermediaries are excluded.
For intermediation in foreign exchange it is intended (Article 4 of Ministry Decree, No. 29 of 17/02/2009) the activity of trading one currency against another, on repo, as well as any form of mediation concerning currency.
For the acquisition of shareholdings (Article 6 of Legislative Decree 17/02/2009, no. 29) it is intended the acquisition, equity participation, and management of related rights, represented or not by securities, on the capital of other companies. The equity participation makes a connection with the investee companies for the implementation of the investor's activities. In any case, there is the acquisition of equities when the investor holds at least 1/10 of the voting rights which are exercisable in the general ordinary shareholders' meeting.
The acquisition of shareholdings is exercised publicly if this is carried out in respect of third parties with professional character and the equities participation takes place in an operational context which leads to the sale of capital shares after actions aimed at the company reorganisation, productive development or to meet the financial needs of the investee companies also by procurement risk capital.
Payment service provision activities
From 1st March 2010, Legislative Decree 27 January 2010, No. 11, is in force, which, in implementing the European Directive 2007/64 / EC (Payment Service Directive) as per Act No. 88 of 7th July, 2009, has introduced an innovative regulation of this activity, imposing on those who exercise it the enrolment in the Register of Payment Institutions still held by the Bank of Italy and the subjection to the related prudential supervisory regime. With provision of the Bank of Italy, the relevant implementing arrangements have been in force since the same date.
What is a loan?
The loan is the sum of money that is given by a bank or credit institution (creditor) to an institution or a natural person (debtor). Currently there are various forms of financing that are distinguished by the ways in which the requested amount is paid and for the different types of interest applied.
Before listing some of the most well-known forms of financing (also called loans), at least two important aspects must be taken into account: the loan may require minimum creditworthiness and a good reputation in terms of a trusted debtor, financing can be directed to the purchase of goods and services or may not be directed (simple issue of required liquidity).
Among the most popular loans we find: loan to employees, forms of financing that provide as a guarantee part of their income from employment or their accrued severance indemnity; personal loan, not connected to the purchase of a good or service; fiduciary loan, issued to particularly deserving applicants and to whom a certain trust is granted; bank loan, issued by a credit institution and subject to specific regulations (interest rates, amortisation plan, number of instalments in which the repayment is deferred, penalties and interest on the arrears in the event of non-payment, etc.).
Funding can also be aimed at buying a house, and in this case the term "mortgage" is used.