Alternative investment funds of Italy and of the EU admitted to invest in credits in Italy
The Decree Law n. 18 of 14th of February of 2016 (the “Decree”), published at Gazzeta Ufficiale n. 37 of 15th of February 2016 and with effects from the 19th February 2016, has introduced, among others, new dispositions about the collective asset management. It deals with measures that lead to recognize in Italy the possibility that the alternative investment funds execute funding activity.
In particular, art. 17 of the Decree has introduced new dispositions into the Legislative Decree n. 58/98 (Testo Unico Finanza, "TUF"), regarding:
i. the direct distribution of credits of the Italian Alternative Investment Funds.
ii. the direct distribution of credits of the Alternative Investment Funds of the EU in Italy.
The Decree hasn't been converted into law yet. For that reason, it's not possible to exclude that new amendments will be introduced during its conversion.
THE CREDIT INVESTMENT OF THE ITALIAN ALTERNATIVE INVESTMENT FUNDS
On the new art. 46bis of the TUF, introduced by the Decree, it is foreseen that the Italian AIF (Alternative Investment Funds) are now able to invest in credits, to be counted on its own estate, in favour of different subjects than consumers, on the basis of the dispositions of the TUF and its respective execution norms.
On the base of what's indicated about the illustrative relation of the design of the Decree's conversion law, the new art. 46bis, with recognized validation, would have been introduced for pointing out that the Italian AIFs that give credits have to apply the norms of the TUF, regarding the Undertakings for Collective Investment in Transferable Securities and the respective execution norms (regulation of the collective management of the Italian Bank of the 19th January 2015 and the regulation MEF of the 5th March 2015 n. 30).
In these measures, there are specific dispositions to which the Undertakings for Collective Investment in Transferable Securities need to attain themselves, in case their statutes or regulations foresee the possibility of investing in credits.
THE CREDIT INVESTMENT OF THE ALTERNATIVE INVESTMENT FUNDS OF THE EU
On the new art. 46ter of the TUF, introduced by the Decree, it is expected that the AIFs of the European Union are able to invest in credits, to be counted on its own estate, in favour of different subjects than consumers, under the following conditions:
i. the AIF of the UE has to be authorised by its own origin country to invest in credits.
ii. the AIF of the UE needs to have a closed shape and its functioning pattern, in particular regarding its participating procedure, must be analogue to Italian FIAs that invest in credits.
iii. the norms of the origin country of the AIF of the EU regarding the limitations and spreading of risks, including the limits of the financing lever, have to be equivalent to the established norms for the Italian AIF investing in credits.
The managers of the AIFs of the EU that intend to conduct activity in credit investment in Italy need to perform a proper communication to the Italian Bank They can start and operate only after 60 days from the communication. Within this conclusion, the Bank of Italy can forbid the credit investment, counted on its own estate, in Italy.
In addition, the Decree offers the Bank of Italy the possibility of foreseing the participation of the AIFs of the UE at the "risks central" of the Bank, also for the banking instruments and the intermediaries inscribed under the rules of the art. 106 of the Testo Unico Bancario. It finally also says that the emanation of the execution dispositions of art. 46ter correspond as a whole to the Bank of Italy.
The Decree also establishes that it has to be be applied to the credits delivered in Italy by the Italian AIFs and the AIFs of the EU, the dispositions regarding the transparency of the contractual conditions and of the relationships with clients, under the observation of the AIF manager. As shown at the illustrative relation of the design of the conversion law of the Decree, there is no obligation of inscribing the managers ex art. 106 TUB if they're already authorised and under control according to the Directive 2011/61/UE (AIFM Directive).
Finally, the Decree modifies the fiscal disposition of the art. 26 DPR n. 600/73, in order to specify, not in a very clear way, that the deduction of the 26% doesn't apply to the interests and other proceeds resulting from the fundings of medium and long-term credits of the companies supplied by credit entities, insurance companies and foreign institutional investers, hold to control by the foreign countries in which they were founded, remaining the dispositions about activity reservation for the funding expenditure under the confrontation of the public of the Testo Unico Bancario (the introduced modification is in bold).
The aim of this prediction, as shown at the illustrative relation, would be to specify that the fiscal deduction indicated above is dependent of the the norms of the Testo Unico Bancario concerning the activity allowance for the funding expenditure under the confrontation of the public, intended for the counterparts founded in Italy, in order to avoid a disadvantage to the national operators.
The dispositions introduced by the Decree, at their current formulation, create a few questions and doubts about their interpretation.
In particular, it's desirable that during the Decree's conversion, the legislator clarifies the following aspects:
i. That the investment efficency of the AIFs, either of Italy or of the EU, is put and is consistent with the discipline respective to the activity of the funding's concession of the Testo Unico Bancario, when verifying the requested conditions of the Decree;
ii. If the new efficency of the AIFs of Italy and the EU only consists of the investment activity in credits, and if then the direct lending is only possible under the form of credit's purchase, or, if instead, this new efficency of the AIFs can sustain itself from direct funding distribution. The same disposition text creates doubts just by looking at it, reffering to the "direct credit distribution" at the rubric of the new articles, and later, in the text of the articles, instead, to the "credit investment".;
iii. If, in an analogue way, the new efficency of the AIFs, include the possibility of also developing financial leasing activities;
iv. And if the credit investment gets admitted also under the form of buy-outs: in that case, if you consider that the regulation about the collective asset management of the Italian Bank of the 19th January 2015, under Section II of the Chapter III, foresees only to the SGRM SICAV and SICAF (and, therefore, without a concrete mention to the authorised AIF's managers of another Member State of the EU, named as GEFIA-UE), that these subject can, under the conditions shown at the same regulation, (a) become cessionary of block legal relations and (b) make use of the civil benefits established under the art. 58, 3 e 4, of the Testo Unico Bancario;
v. In case that, according to the Decree, the AIFs can develop funding activities under the form of direct distribution, confirm the application of the substitutive tax of 0.25% while appealing the conditions of the D.P.R. n. 601/1973 (that, taking into consideration the fact that the AIFs fall into the definition of Undertakings for Collective Investment in Transferable Securities of the art. 17bis of the mentioned D.P.R., could find its application).