Italy: New Italian Rules Allowing Direct Lending And Purchasing Of Claims By EU Alternative Investment Funds

Law Decree 14 February 2016, No. 18 (as converted by Law 8 April 2016, No. 49) expressly allows EU Alternative Investment Funds ("EU AIFs") to carry out, under certain conditions, direct lending and purchasing of claims in Italy. On 23 December 2016, the Bank of Italy issued rules which implemented the new regulation concerning collective asset management activity ("Bank of Italy Regulation").

The above-mentioned rules have been introduced with the aim of providing Italian companies with new financing instruments to facilitate access to credit. The new rules follow previous legislative measures concerning (i) the facilitation of the issuance of bonds by private companies, and (ii) the possibility for Italian insurance companies, securitization companies and AIFs to perform direct lending.

Therefore, direct lending and purchasing of claims in Italy might represent an opportunity for existing and/or newly-formed EU AIFs to create new lines of business.

The Consolidated Financial ACT

Article 46 of Legislative Decree 24 February 1998, No. 58 (the "Consolidated Financial Act") sets out several conditions that govern how EU AIFs invest in credit to Italian entities. These conditions cover direct lending and the purchase of claims and can be summarized as follows:

  • the EU AIF must be authorized to invest in loans by the relevant authority in its home Member State;
  • the EU AIF must be structured as a closed-end fund and its operational system be equivalent to the operational system of an Italian AIF investing in loans;
  • the risk management rules applicable to the EU AIF according to its home Member State law and regulations (including provisions governing leverage thresholds) must be equivalent to those applicable to Italian AIFs permitted to invest in loans.

According to Article 46, Paragraph 2 of the Consolidated Financial Act, managers of EU AIFs intending to operate in Italy are required to file a prior notice with the Bank of Italy.

Moreover, to ensure sound and prudent management of such funds, the Bank of Italy may require the addition of the EU AIF to the Italian central credit register (Centrale Rischi), a system operated by the Bank of Italy which collects data supplied by banks and financial intermediaries on the credit they grant to their customers. Pursuant to Article 46, Paragraph 3 of the Consolidated Financial Act, the Bank of Italy may also require participation in the Centrale Rischi by banks or financial intermediaries duly authorized to operate in Italy.

The Bank of Italy Regulations

The new rules set forth by Title VI, Chapter V of the Bank of Italy Regulation

  • restate the conditions provided for by Article 46 of the Consolidated Financial Act , and
  • detail the requirements of the prior notice procedure applicable to EU AIFs intending to start their operation in Italy.

As far as the prior notice procedure is concerned, Article 2.2, Chapter V, Title VI of the Bank of Italy Regulation provides that the prior notice of intention to offer loans in Italy must be sent at least 60 days before the commencement of operations, and must contain the following:

  • the name, registered office and directorate-general of the EU AIF's manager;
  • the name of the EU AIF, or the relevant sub-fund that intends to operate in Italy;
  • the personal and legal capacity of the signatory of the communication;
  • a statement released by the relevant authority in the EU AIF's home Member State confirming authorization in the Member State and that the fund manager is authorized to manage the EU AIF;
  • a legal opinion or statement provided by the relevant authority in the EU AIF's home Member State confirming the ability of the EU AIF to originate loans;
  • a copy of the management rules/by-laws of the EU AIF and those governing its manager, along with a statement from the home Member State's relevant authority confirming the validity of these documents;
  • alternatively (i) a declaration signed by the legal representative of the EU AIF's manager, setting out the AIF's home Member State's rules on risk mitigation and diversification, including thresholds on leverage (these provisions must be considered equivalent to provisions applicable to Italian AIFs and a legal opinion to that effect must also be supplied), or (ii) a statement released by the relevant authority in the home Member State that it is actively supervising the conduct of the AIF manager with the rules on risk mitigation and diversification in mind;
  • a copy of the most recent annual report, and half-year report if available;
  • a note outlining the operational scheme of the EU AIF, with particular reference to rules governing the subscription and redemption of units/shares, and the scope and investment policy. The note must state whether or not the AIF manager has signed, or intends to sign, side letters with investors of the EU AIF and, if so, their content must be disclosed.1

Please also note that an EU AIF that has already been authorized to invest in loans in Italy, and intends to subsequently commence operations in respect to a different sub-fund, does not need to re-submit data or information previously sent to the Bank of Italy.

Tax Considerations

The Italian government also introduced new and important changes to the tax regime applicable to financing transactions executed by, inter alia, EU and Italian AIFs which now benefit from significant tax reforms summarized below:

  • application of the "sostitutiva" tax regime which is considered a key requirement for real estate finance transactions. Hence, medium and long term loans (i.e. having a maturity date longer than 18 months) granted by EU AIFs may benefit, upon option, from an umbrella tax regime of 0.25% on the advanced amount of the loan which replaces ordinary and higher taxes such as stamp duties, property and mortgage taxes (the latter being not lower than 3% of the secured obligations); the same regime is applicable in the event that EU AIFs purchase the relevant receivables); and
  • disapplication2 of the ordinary withholding tax to be levied by Italian borrowers on facilities interests paid to foreign creditors equal to 26%.3

Accordingly, cross-border financing (as well as purchasing of receivables, including portfolios of credits, securitization transactions, acquisition on the secondary market and syndication activities) will be rendered freer for a greater number of entities and will be more cost efficient at the same time, augmenting the competitiveness of the Italian market and making negotiations of the relevant agreements easier and less burdensome (e.g., no need to agree on gross-up basket).


1. Once the Bank of Italy has reviewed all the documentation, and any necessary amendments or additions have been made, the Italian Authority has 60 days to notify the fund if it has failed to meet the requirements. Unless this express notification of failure is sent within a 60 day time period, the EU AIF is entitled to start lending in Italy.

2. Provided that Italian law and regulations on lending capability are respected.

3. Or such other percentage as determined by any applicable bilateral tax treaty - if any - entered into by and between Italy and the relevant country.

New Italian Rules Allowing Direct Lending And Purchasing Of Claims By EU Alternative Investment Funds

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.