Bank of Italy has received a query from several Italian stakeholders, concerning the application of IPR to banks acting as depositaries. Considering that the IPR has only recently entered into force and is not applicable yet, we believe that this issue could be possibly clarified before the application of IPR to ensure the adoption of a uniform and consistent approach in all Member States. In this regard, it is worth mentioning that currently depositaries are not applying SEPA Regulation by virtue of the exclusion provided for in Article 3, letter i) of the PSD2, according to which “payment transactions related to securities asset servicing, including dividends, income or other distributions, or redemption or sale, carried out by persons referred to in point (h) or by investment firms, credit institutions, collective investment undertakings or asset management companies providing investment services and any other entities allowed to have the custody of financial instruments” . Please see references at the end of the box for further details.

At the national level, the exclusion provided for in Art. 3, letter i, of PSD2 has made it possible to require that depositaries implement effective and in-depth control activities in line with depositary obligations under AIFM and UCITS directives. Moreover, depositaries also perform controls for money laundering and counter financing of terrorism prevention purposes in accordance with the relevant EU and national framework. 

Should the exclusion of depositaries from the IRP regulation not be confirmed, stakeholders point out that that the obligations for depositaries to provide instant credit transfers could strongly interfere with – if not impede it at all – the correct performance of the depositary oversight and control tasks on operations of asset managers and funds, since it would be impossible to perform such controls in 10 seconds. The disapplication of the exclusion might also expose transactions to risks stemming from money laundering and counter financing of terrorism, as well as frauds, since it may undermine the effectiveness of depositary controls for such purposes. In this respect, if the exemption did not apply, it should be ensured that the obligation to provide instant transfers does not lead to a reduction or relaxation of the controls that depositaries shall perform under applicable EU law.
 

Relevant legislative references
•    Article 1, par. 2, of IPR amends the so called SEPA Regulation ¹ by introducing articles 5a-5d. Article 5a, in particular, establishes an obligation for payment service providers (PSPs) to provide their clients with the service of sending and receiving instant credit transfers. 
An “instant credit transfer” is a credit transfer that is executed immediately (SEPA Regulation, art. 2, point 1a, as amended by the IPR). According to the new rules, “immediately” means that “the payee’s PSP shall, within 10 seconds of the time of receipt of the payment order for an instant credit transfer by the payer’s PSP, make the amount of the payment transaction available on the payee’s payment account […] and confirm the completion of the payment transaction to the payer’s PSP” (SEPA Regulation, art. 5a, par. 4, let. c), as introduced by the IPR).
•    According to the SEPA Regulation (art. 2, par. 1, no. 1), a “credit transfer” is a national or cross-border payment service. As such, the instant credit transfer falls within the scope of directive PSD2 (directive (UE) 2015/2366 regulating payment services in the internal market). 
•    According to the new art. 5a of SEPA Regulation, the obligation to provide instant credit transfers applies to Payment Service Providers (PSPs), which are defined in the same regulation (article 2, par. 1, no. 8) as those subjects falling under any of the categories referred to in article 1, par. 1, no. 1, of PSD2² . 
•    As PSPs, banks are therefore addressees of the obligation to provide instant credit transfer to their clients, starting from 9 January 2025 for receiving instant credit transfers in euro and from 9 October 2025 for sending instant credit transfers in euro. 
•    Article 3 of the PSD2 specifies some cases (“exclusions”) whereby the PSD2 provisions do not apply, among which there is the case of “payment transactions related to securities asset servicing, including dividends, income or other distributions, or redemption or sale, carried out by persons referred to in point (h) or by investment firms, credit institutions, collective investment undertakings or asset management companies providing investment services and any other entities allowed to have the custody of financial instruments” (PSD2, art. 3, let. i).
•    As a result, to date, banks benefit from the exclusion set out in art. 3, let. i), of PSD2 and, consequently, do not apply PSD2 and SEPA regulation, when their operations regard depositaries tasks and duties.
 

¹Regulation (EU) No. 260/2012 of the European Parliament and of the Council 14 March 2012 (“SEPA Regulation”) establishing technical and business requirements for credit transfers and direct debits in euro and amending Regulation (EC) No 924/2009.

² More precisely, the SEPA Regulation still refers to article 1, par. 1, no. 1, of PSD1 (Directive 2007/64/EC), which has been repealed and is now replaced by article 1, par. 1, of PSD2 (Directive 2015/2366).