With Resolution No. 21867 of 26 May 2021, the Italian Regulator (Consob) approved some amendments to the Regulation implementing the  art. 32-ter, par 2 of the Legislative decree 24 February 1998, n. 58 related to the Arbitrator for Financial Disputes (AFD).

The AFD, into force on 9 January 2017, is a system of out-of-court dispute resolution, set up to Consob Resolution n. 19602 of 4 May 2016, characterized by the compulsory membership of intermediaries and the decision-making nature of the procedure. The objective is to provide an effective instrument for the direct protection of investors’ interests. Access to the AFD is completely free of any fees to the investor and reduced deadlines for reaching a decision are provided (90 days from the time of completion of the file containing the appeal, the deductions and the documentation produced by the parties).

Conditions for access to the AFD are that the client-investor has previously submitted a complaint to the intermediary and that the arbitration procedure starts within the following twelve months.

The right to appeal to the AFD cannot be renounced by the investor and can be always exercised, even in the presence of dispute settlement clauses to other out-of-court resolution bodies contained in the contracts.

Disputes (up to a requested amount of € 500,000) that may be submitted to the AFD relate to the violation of obligations of information, diligence, correctness and transparency that intermediaries must comply when dealing with investors and providing them with investment and funds management services.

The procedure allows both the investor and the intermediary to represent his/her own motives, thus ensuring the full disclosure between the parties.  The process ends with a decision by the AFD. In particular, if the AFD fully or partially accepts the investor’s appeal, he will establish (at the expense of the intermediary) the obligation to compensate damages suffered or expenses incurred for the completion of the deeds considered necessary. The decision of the AFD is not binding for the investor who can still resort to the judicial authority.

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