The activities of the San Marino banking, financial and insurance system are regulated, in particular, by Law no. 165 of 17 November 2005 and subsequent amendments (Law on Companies and Banking, Financial and Insurance Services - “LISF”), as well as by the consequent implementing provisions (regulations and circulars) issued by the Central Bank of the Republic of San Marino by virtue of the regulatory powers assigned to it by the LISF, including the following:
- Regulation no. 2006-03 on collective investment services;
- Regulation no. 2007-02 on insurance and reinsurance intermediation;
- Regulation no. 2007-07 on collection of savings and banking;
- Regulation no. 2008-01 on life insurance;
- Regulation no. 2011-03 on financing operations (financial companies)
- Regulation no. 2013-05 on the entry into the single euro payments area (SEPA)
- Regulation no. 2014-01 on financial promotion and out-of-office canvassing;
- Regulation no. 2020-03 on independent financial advisors
- Regulation no. 2020-04 on payment services and electronic money issuance;
- Regulation no. 2021-03 on custody of virtual assets by banks
The Central Bank of the Republic of San Marino - CBSM, established by Law no. 96 of 29 June 2005 (Statute of the Central Bank), is the single Supervisory Authority of the San Marino banking, financial and insurance sector. In particular, the Central Bank of the Republic of San Marino supervises the parties authorised to carry out in the Republic of San Marino the reserved activities listed in the LISF, as well as financial promoters, independent financial advisers and insurance intermediaries.
Pursuant to its Statute, CBSM also performs other functions, including:
i) management, regulation and supervision of the payments system;
ii) institutional contact point for International Organizations, central banks, foreign financial supervisory authorities and the like;
iii) processing and publication of statistics on the parties it supervises and on their activities;
iv) management of Treasury and Tax-Collecting services on behalf of the State as well as Public Entities and Autonomous State Corporations;
v) repository of the financial assets of the State as well as of the Entities and Corporations of the Overall Public Sector;
vi) State's agent in the management of public debt securities.
The Financial Intelligence Agency, the Financial Intelligence Unit (FIU) of the Republic of San Marino, is also established at the CBSM. Pursuant to Law no. 92 of 17 June 2008 and subsequent amendments (Provisions on preventing and combating money laundering and terrorist financing), the FIU performs the role of central anti-money laundering authority autonomously and independently.
San Marino institutions guarantee a regulatory framework and an oversight structure in line with the best standards and are committed to the progressive integration of the banking and financial system of San Marino into the international capital market, through the signing of a significant number of conventions against double taxation and economic cooperation agreements and for the exchange of information with other countries, as well as within the framework of the negotiations for an Association Agreement with the European Union. Among other things, this Association Agreement is aimed at the participation of San Marino and its economic and financial operators in the Single European Market.
The progressive extension of reference markets is favoured also by the positive assessments on San Marino made by all major supranational bodies (International Monetary Fund, OECD, Moneyval, European Union), which confirm the levels of excellence achieved in terms of transparency and increase the attractiveness of the San Marino jurisdiction.
Other strengths include integration in the Euro currency area, as well as participation in the Single Euro Payments Area (SEPA) and international payment systems.
The current Monetary Agreement between the European Union and the Republic of San Marino, signed in 2012, recognises San Marino's right to use the Euro as its national currency and to mint a certain quantity of Euro coins with its own national side. Pursuant to the above Agreement, the institutions of San Marino and the CBSM, the latter in performing of the aforementioned regulatory powers, are also dedicated to the constant adjustment and alignment of the domestic system with a significant part of the so-called acquis of the European Union relating to the following five macro-areas:
- Prevention of money laundering;
- Prevention of fraud and currency counterfeiting related to cash and other payment instruments;
- Provisions on euro banknotes and coins;
- Banking and financial legislation;
- Legislation on the collection of statistical data.
As far as payment systems are concerned, all San Marino banks operate in international payment systems by using their own BIC (Bank Identifier Code) assigned by Swift (Society for Worldwide Interbank Financial Telecommunication). They also operate in a national payment system managed, regulated and supervised by the CBSM, allowing, among other things, the channelling of domestic payment instruments in line with SEPA rules and using the IBAN (International Bank Account Number) standard.
Moreover, the CBSM, as well as the supervised banks, avail themselves of a network of correspondents, which can order and receive transactions directly to and from abroad with the same standards used at international level. International interbank communication is guaranteed by the use of the Swift network.
The CBSM and San Marino banks have also joined:
• the Trans-European Automated Real-Time Gross Settlement Express Transfer System, responsible for the settlement of transactions in real time;
• the Italian BI-Comp (Bank of Italy-Compensation) clearing system;
• from its start-up date (1 February 2014), the Single Euro Payments Area for the payment in-struments SCT (SEPA Credit Transfer) and SDD (SEPA Direct Debit), as well as the Additional Op-tional Service SEDA (SEPA Compliant Electronic Database Alignment).
The CBSM also maintains and manages relations with supranational financial institutions, central banks, banking financial intermediaries and other entities consistent with its purpose and functions.
Currently, the San Marino banking, financial and insurance system consists of 11 authorised parties including: 4 banks, 3 management companies, 1 financial-fiduciary company, 1 payment institution and 2 insurance companies.
The banking, financial and insurance industry of San Marino can be an ideal partner for developing international collaborations and starting up innovative entrepreneurial projects, thanks to its special features, namely its small size and its position at international level, thanks to its status of member of the main International Organizations and its diplomatic and consular network. In particular, with reference to the financial sector, San Marino has been a full member of the International Monetary Fund (IMF) since 23 September 1992. It has also been a member of the International Bank for Reconstruction and Development (IBRD) since 21 September 2000, as well as of the European Bank for Reconstruction and Development (EBRD) since 7 June 2019.
In a context of a level playing field, the banking, financial and insurance industry is looking with increasing attention at an ever-greater interaction with foreign banking/financial groups and entities and at the opening of its own reference market. At the same time, the operators of this industry have expanded and diversified their offer, by designing new products and services to integrate the traditional retail and private banking activities, with increasing attention to the green economy, new payment services, online transactions and fintech, thus encouraging technological innovation. At the same time, the operators have maintained direct and privileged relations with their customers as they have always done.
Finally, in the light of the very recent regulatory innovations (in particular Delegated Decree no. 111 of 23 June 2021), San Marino banking system will also be able to approach the sector of virtual assets, being able to provide customers, following specific authorisation from the Central Bank, with custody and/or administration services for virtual assets or instruments that allow control over virtual assets.