The legislative decree no. 415/96 (so called Eurosim law), which provides the new guidelines for the activities of financial intermediaries (both investment firms and banks) in Italy and replaces the system set forth by Law n.1 of January 1991, SIM law, was approved on the 23rd July 1996.

The said decree is the result of the implementation, in Italy, of the EC directives n.93/22 on investment services, and EC directive 93/6 on the capital adequacy of investment firms and credit institutions. Therefore, it constitutes an essential instrument to achieve the right of establishment and of providing financial services on a cross border basis for EC investment firms.

The Eurosim law's benefits will apply to certain financial services, as described in the Section A of the annex to the Law ("Core Services"), provided by Italian or European investment firms.

Services related to mergers and acquisitions are included in the said Annex of Eurosim law in Section C as non-core services.

In particular Section C no.4 provides that the Eurosim law applies to "advises and services relating to mergers and acquisitions of companies ("Consulenza e servizi concernenti le concentrazioni e l'acquisto di imprese"). It also means that corporate finance firms, which make take-over offers on behalf of clients, are not regarded as providing "Core Services".

Mergers and acquisition activities cannot benefits of Eurosim law unless the investment firm carrying out mergers and acquisition activities is subject to the said law for at least one of the Core-services (see section A of the annex to the Law). Accordingly corporate finance firms are normally not entitled to benefit of Eurosim law if mergers and acquisitions activities are their sole business.

Pursuant to the past regulation, a foreign investment firm could have carried out financial services in Italy only through an Italian subsidiary authorised to operate as a SIM or by utilising services of a not controlled SIM.

The new legislation enables EC investment firms to transact business on the whole territory of Italy, whether through local branch offices or by the free provision of services with no need to comply with the supervisory and control rules of the Italian authorities, but subject exclusively to their "home country" control.

This means that it is not necessary for a foreign investment firm, which intend to operate in Italy, to set up or to acquire an Italian SIM .

In particular an EC investment firm, authorised in its country to carry out investment services, and which has its legal and administrative office in the same country may be authorised to operate in Italy according to two different systems:

a) on a cross-border basis (or free provision of services), that is without a permanent establishment in Italy; or

b)through the setting up of a branch office in Italy.


This concerns EC investment firms and banks which intend to carry out in Italy, without opening offices therein, any activity included under the list of mutual recognition.

The provision of services subject to mutual recognition on a cross border basis requires no authorisation or waiting time. The only condition is that a notice be served by the home country authority to the Bank of Italy and CONSOB (Italian financial market regulatory body), specifying the activities for which the investment firm is authorised under its home country system.

Therefore the procedure pertaining to it, pursuant to article 14 of Eurosim law, as described above, is relatively simple:

EC investment firms which carry out for the first time their services on a cross-border basis in Italy may do so, subject to prior communication of the home country regulatory authority CONSOB and Bank of Italy stating that such investment firm intend to carry out financial services in Italy.


Eurosim law provides that for the exercise of services permitted by mutual recognition, the EC investment firms can establish branch offices in Italy.

To this end there must be a notification, for the opening of a first branch of a EC investment firm, by the home country competent authority to the Bank of Italy and to CONSOB. Also the Italian branch offices of EC investment firms, as the Italian ones, must be registered within a register kept by CONSOB.

The notification by the competent authority of an EC investment firm to the Bank of Italy and to CONSOB is necessary only for the setting up of the first branch office, and not for the eventual opening of further offices which are subject only to stet notice to the Italian authorities.

Eurosim law came into force on 1st September 1996. However its implementing regulation has not yet been enacted by CONSOB and by Bank of Italy.

This article was intended to provide general guidelines. Specialist advice should be sought about specific facts.