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Alternative Lending: The Italian Market Opens to EU Credit Funds

Background

Following the new measures issued by the Bank of Italy on 23 December 2016 (the “BoI Regulation”[1]), EU credit funds may now lend to Italian non-consumer borrowers, provided that they register with the Bank of Italy.

The BoI Regulation completes the regulatory framework on lending into Italy by EU credit funds by enacting the level 1 measures recently introduced in Legislative Decree 24 February 1998 No. 58 (the “Unified Financial Act”[2]). Following the adoption of the BoI Regulation, the regulatory framework for alternative lending by both domestic and EU credit funds has been aligned.[3]

This alert focuses on the direct lending by EU credit funds reserved to professional investors only[4] and, in particular, on the following:

  1. conditions for lending into Italy by EU credit funds;
  2. procedure to be followed prior to start operating; and
  3. reporting and disclosure duties.

It is worth reminding that, under Italian law, the purchase of receivables falls within the wider lending activity notion (so called “attività di concessione di finanziamenti”) and this rule has also recently been stressed by the Bank of Italy in the framework of the public consultation during 2016[5]. Consequently, the EU credit funds willing to buy existing loans should be considered as being in principle subject to the direct lending regime subject matter of this alert.

Click the link below to read the full alert.

[1]   The BoI Regulation: i) was issued following the July 2016 Bank of Italy public consultation relating, inter alia, to EU credit funds; ii) was published on the Italian Official Gazette 4 January 2017 No. 3; and iii) entered into force on 5 January 2017.

[2]   Reference is made to Articles 46 - ter and quarter of the Unified Financial Act with a particular emphasis on the amendments introduced by Article 17 of Legislative Decree 14 February 2016 No. 18 as converted into Law with amendments by Law 8 April 2016 No. 49. See our previous Client Alert: “Alternative Lending in Italy: A Significant Step Forward” (February 2016).

[3]  Both credit funds had been expressly authorised under the recent changes to the Unified Financial Act but the lending by EU Credit Funds was subject to the implementing regulations.

[4]  As instance reference is made to the following kinds of professional investors: i) credit institutions; ii) investment firms; iii) pension funds; iv) insurance companies; and v) collective investment schemes and their management companies, etc.

[5]   In this regards please make reference to the Bank of Italy paper “Modifiche al regolamento sulla gestione collettiva del risparmio – Attuazione della Direttiva UCITS V e altri interventi di modifica – Resoconto della consultazione,” page 10 re: “Disposizioni generali (Ambito di applicazione).” The paper is available in Italian version only at the following address: http://www.bancaditalia.it/compiti/vigilanza/normativa/consultazioni/2016/gestione-collettiva-risparmio/Resoconto_consultazione.pdf.


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