The legality rating is a merit instrument which enables firms who possess it to gain benefits in terms of reputation and access to credit from banks and financing from public administrations.
This scheme was introduced into Italian law with Art. 5-ter of Legislative Decree No. 1/2012 (“Urgent provisions for competition, infrastructure development and competitiveness”), converted with amendments by Law No. 27/2014, in order to promote the introduction of ethical principles into corporate conduct.
In order to implement the provisions of the aforementioned legislation the Autorità Garante della Concorrenza e del Mercato (AGCM – “Italian Competition Authority”) approved a regulation (AGCM Resolution No. 24075 of 14th November 2012 and subsequent amendments made with Resolution No. 24953 of 5th June 2014, Resolution No. 25017 of 17th July 2014 and Resolution No. 25207 of 4th December 2014) to discipline the process of assigning legality ratings and to define the characteristics that a firm must possess for the purposes of the relative application:
minimum sales turnover of €2 million for the year ended in the year prior to that of the rating application relating to an individual company or to the Group of companies to which it belongs (the figure must be taken from financial statements properly approved by the competent governing bodies of the company and published in accordance with the law);
registered with the Company Registrar for at least two years.
This provision states that banks must take account of legality ratings in terms of time taken and costs for processing loan applications and by considering it among the variables used to determine a company’s credit rating and the related terms and conditions for access to credit, should they consider it relevant with respect to the performance of the loan relationship.
This rating could therefore be an important tool for promoting the ethically sustainable and socially responsible development of companies.
UBI Banca has introduced specific rules to consider legality ratings in its regulations for processing loan applications and for the approval of credit lines. Until 2016, each network bank belonging to the UBI Banca Group published its own report on legality ratings on its website. Following the merger of the network banks into their Parent (the “Single Bank” Project), from 2017 UBI Banca Group now publishes that report directly on its corporate website.