Foreign investment services companies operating in Italy through a tied agent


With the quick development and great increase of investment services being globally offered by international investment companies, a frequent issue is whether a company incorporated and registered in a Member-State of the European Union – let’s take as an example, Cyprus – and licensed to provide investment services by the Cyprus Authority which is monitoring its investment services, in order to operate in Italy should appoint an Italian Tied Agent, or, alternatively, can it operate and sell its services in Italy without having to appoint any Tied Agent registered in Italy.


The key set of rules to be taken into consideration to answer such questions are:

  • Italian Legislative Decree no. 58 of 24 February 1998 (the “Codified Text of Rules on Financial Intermediation”, or “TUF”, as subsequently amended, in particular pursuant to Italian Law no. 145 of 30 December 2018).

  • Italian Legislative Decree no. 129 of 3 August 2017, implementing into Italian Law Directive no. 2014/65/EU of 15 May 2014 (“MIFID II”), as modified pursuant to Directive no. 2016/1034/EU, further adapting Italian Law also in order to properly and fully reflect EU Regulation no. 648/2012 (“MIFIR”), as amended pursuant to EU Regulation no. 2016/1033/EU.

The words “Tied Agent” under Italian Law shall mean “a financial consultant qualified and entitled to make offers off-site” (i.e., outside of the offices or premises of the bank or financial entity which has hired or appointed such consultant in order to promote its financial services, pursuant to section 1, paragraph 29 of Law no. 208 of 28 December 2015).


The features of such financial consultant are set forth in article 31, paragraph 2 of TUF (as subsequently amended), pursuant to which a financial consultant is a person qualified and entitled to make offers off-site, who in a professional way makes offers outside of the offices of the entity for which the consultant is working as an employee or acting as an agent or as an attorney-in-fact. Such activity as financial consultant making offers off-site can be carried out exclusively for the benefit and interest of one sole entity.


The Tied Agent is therefore the sole operator of the Savings Industry who is entitled by law to promote and place with the public any kind of financial products and investment services, and this, outside the offices or premises of the company which has hired or appointed him, provided that the Tied Agent shall be reporting to an entity which has been properly licensed (banks, financial institutions, entities managing or handling savings belonging to retail customers, etc.).


The Tied Agent in Italy shall also comply with all requirements set forth by TUF and by the CONSOB’s Regulation on Intermediaries no. 16190 of 29 October 2007 and any subsequent amendments.


The Tied Agent’s main obligations set forth by such rules mainly refer to him acting by way of a good, precise and fair professional behavior vis-à-vis the clients who get in touch with him for the purpose of establishing a financial relationship.


Pursuant to section 27 TUF, as amended after the MIFID II and MIFIR Directives (entered into final force in Italy in January 2018), investment or financial companies located in any EU jurisdiction – like the Cyprus company as per our example - can carry out their activity in Italy, provided that in particular:

a) such companies located in any EU jurisdiction can render services in the financial sector by using their right to establish an Italian subsidiary or to appoint a Tied Agent registered in Italy;

b) their first establishment in Italy shall be subject to the prior notice to be sent to CONSOB by the financial or supervisory Authority in the State of origin of the foreign entity – as per our example, Cyprus - wishing to provide such financial services in Italy, in compliance with the technical and formal rules set forth by the EU Commission pursuant to Directive 2014/65/EU;

c) the foreign entity’s subsidiary so established in Italy, or the Tied Agent registered in Italy, can start to carry out their respective activities upon receiving the relevant communication from CONSOB, or – if no communication at all is issued by CONSOB during 60 days from the notice sent to CONSOB by the foreign Authority – after two months from the transmission of the foreign Authority’s notice to CONSOB;

d) alternatively, such foreign entity can offer investment services in Italy acting through the EU regime of the free rendering of services, by means of a Tied Agent from the foreign entity’s own jurisdiction – as per our example, Cyprus - , provided that such foreign Tied Agent – in such specific case – cannot hold any money or financial instruments belonging to any actual or possible new clients of the entity for which the Tied Agent is rendering his services; the foregoing, in any case, is subject to CONSOB having been duly informed with regard thereto by the relevant Authority of the State of origin of the foreign entity, in compliance with the above-mentioned technical and formal rules set forth by the EU Commission pursuant to Directive 2014/65/EU;

e) in connection with the alternative course of action as cited in the preceding bullet-point, after having been admitted to carry out its activity in Italy in accordance with the EU regime of the free rendering of services, the foreign company shall become entitled to make offers – outside its offices and premises – to retail clients and non-professional customers, by means of a Tied Agent. In such case, the foreign company shall become subject to the CONSOB’s supervisory authority and control with regard to the compliance with the conduct requirements as set forth under Italian Law;

f) to such regard, section 31 TUF provides that a Tied Agent registered in Italy, who is appointed by an investment company or bank from another EU member State, shall be treated – for the purpose of the application of said rules of conduct – like a subsidiary of the foreign company established in Italy;

g) as it finally relates to the formalities to be met before starting the activity of making offers off-site to retail or non-professional clients, if no subsidiary of the investment or financial company has been established in Italy, CONSOB must first receive a notice from the relevant Authority of the EU member State of origin of the foreign company (in our case, Cyprus), precisely detailing the intention of such foreign company to exercise its activity by hiring or appointing, and by means of, a Tied Agent registered in Italy.


To conclude, the foreign company can provide and sell its investment services in Italy either through the appointment of an Italian Tied Agent, or by establishing a subsidiary in Italy, as allowed by and in compliance with EU and Italian Laws.


Prof. Avv. Salvatore Vitale


The content of this article does not constitute legal advice, but has an informative function. For personalized legal advice, contact the firm by e-mail info@dongpartners.eu or by phone +39 06 916505710. © Dong & Partners International Law Firm, All rights reserved


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