Política de Estado para la educación superior: un cambio de mentalidad 73

The Compliance Function of the Parent Company (Compliance Area) oversees and governs the compliance process and adherence to supervisory rules and regulations across the Group. The Area also has the operational task of: managing claims and Alternative Dispute Resolution with customers; assessing the quality of services provided; overseeing the application of legal obligations in relation to anti-money laundering and counter-terrorism (Know- your-customer checks strengthened).

Compliance of business processes with laws and internal regulations is monitored through direct surveys conducted with the help of suitable remote monitoring and control tools, in line with industry best practices and the recent guidelines issued by the relevant supervisory authorities. The Area also makes use of information coming from other corporate functions, internal audit in particular.

The results of such monitoring are an important frame of reference in ensuring the expected reporting flows to the Corporate Bodies and identifying the improvement actions to be implemented.

During the period the Group carried out actions focused on the improvement of compliance, in particular:

 in light of new Supervisory Instructions regarding the Internal Control System, update of internal rules on the

management and control of non-compliance risk continued in order to further extend their scope of application and align them with new corporate guidelines for the drafting of regulations;

 review of Model 231/2001 and the Group's Code of Ethics was completed and its approval by the Board of

Directors was granted in October;

 in compliance with a predetermined time schedule, initiatives identified in the area of “transparency” continued

to be developed, as per guidance from the Bank of Italy; multiple actions were put in place to strengthen anti- money laundering, in terms of both dedicated human resources and IT tools;

 development of synergies with the Internal Audit and Risk Management functions were further strengthened with

Interim Report on Operations

Non-compliance

Sanctions for non-compliance in the management of matters having a material impact

Within the regulatory areas having the greatest impact on the Group's activities, two sanction measures were received for violations of anti-money laundering rules, referring to different timeframes for the same Branch. The sanctions, for a total amount of EUR 1,242,738, were challenged by the Bank through an appeal filed with the competent Court in Rome.

An additional claim was raised in relation to the privacy law (art. 23 and art. 13 of Law decree no. 196/2003) by the Guardia di Finanza in July, entailing an administrative fine of EUR 1,120,000, which was appealed against by the Bank pursuant to art. 18 of Law no. 689/1981.

Legal proceedings

During its ordinary course of business, the Group is exposed to legal proceedings with causes of action including: compound interest, the placement of bonds issued by countries and companies later in default, the placement of financial plans and products. The Group believes that these proceedings do not have a significant impact on its business or on its economic and financial situation.

For a description of the main legal and arbitration proceedings in progress, see Part E of the Notes to the Financial

Statements.

It should also be noted that:

 in accordance with notifications by the judicial authorities, investigations are currently being conducted by the

magistrates into financial transactions for funding of the acquisition of Banca Antonveneta and existing loans to the Monte dei Paschi di Siena Foundation. In this regard, the Parent Company initiated, against members of the previous management and third parties involved in the same investigations, a series of preliminary actions for compensation of damages, conditional upon positive developments in the civil lawsuits already instituted and any potential criminal lawsuits the Bank may file or in which it may claim damages as a civil party. On the other hand, as part of the same civil proceedings instituted by the Parent Company for liability actions and claims for damages, it cannot be excluded that the Parent Company may possibly be claimed against for further damages in a cross-action, which may reduce, even significantly, the prospects for compensation in its favour. The Parent Company is claimed against for compensation of damages by investors who entered into financial transactions connected with the capital strengthening initiatives put in place by the Bank in prior years. These claims were lodged on the basis of purportedly inaccurate disclosure of information by the Bank in the course of the transactions;

 on 28/1/2013 Codacons filed an appeal with the Lazio Regional Administrative Court (TAR) seeking annulment of

the resolution whereby the Executive Board of the Bank of Italy gave the go-ahead for the issue of “Monti bonds” in favour of the bank. In the course of the proceedings all petitions for precautionary measures submitted by Codacons during the individual hearings were rejected by the Regional Administrative Court and the Italian State Council. In its closed session on 3 April 2013, the Regional Administrative Court of Lazio adjourned the hearing indefinitely;

 whereas the Italian Antitrust Authority (“AGCM”), with its resolution of 15 July 2009, had initiated proceedings

to ascertain whether art. 81 of the EC Treaty had been breached by some companies and banking institutions including Banca MPS, the latter has rejected all commitments undertaken in the meantime by all parties involved, as it considered them inappropriate to solve the anti-competitive concerns focused upon in the proceedings. In this regard, AGCM imposed on Banca MPS an administrative fine of EUR 910 thousand with the order to abstain "from applying the rules of the circuit to which the license agreements are referred, and of contractual clauses with merchants which restrict competitive freedom in the Acquiring market." The proceeding has been appealed against before the First Section of the Regional Administrative Court of Lazio, which accepted the appeal on 11 July 2011, partly declaring the challenged deeds null and void. In turn, AGCM has lodged an appeal, requesting a review of the case. The hearing has not yet been set.