CONSOB Regulation on digital financial instruments comes into force

With the publication in the Official Gazette on 18 December 2023 of Resolution No. 22923 of 6 December 2023, the CONSOB Regulation on the issuance and circulation in digital form of financial instruments (the "Regulation") enters into force on 19 December 2023.

The Regulations have been adopted by CONSOB after a public consultation with the market and are governed pursuant to Article 28, paragraphs 1 and 2, of Decree-Law No. 25 of 17 March 2023, converted, with amendments, by Law No. 52 of 10 May 2023, containing urgent provisions on the issuance and circulation of certain financial instruments in digital form and the simplification of FinTech experimentation ("FinTech Decree").

With the Regulation for finance on DLT platforms, the criteria for record-keeping and the set of new rules adopted after the FinTech Decree are defined.

In particular, the Regulation:

• defines the principles and criteria relating to the formation and maintenance of the list of register managers and the related forms of publicity for the digital circulation of financial instruments;

• regulates the procedures for submitting the application for registration of the registry managers and
  the procedure for inclusion on the list, identifying possible causes of suspension and requiring an illustrative technical report that includes a risk analysis;

• regulates the activity of the person in charge establishing the minimum content of information on how the register operates.

Finally, the national legislator has provided for the need to use digital circulation registers held by registry managers who are enrolled on a special list kept by CONSOB for the issuance of financial instruments in digital form that are not negotiated on a trading venue and are not included in the scope of application of the 'Pilot Regime Regulation' (EU Regulation 858/2022), which established a pilot regime for Dlt market infrastructures.