Italy


Is there any legislation or proposed legislation in your jurisdiction under which financial institutions are prohibited from dealing in investments as a principal?

The Italian law, Art. 10 of D.lgs. 1/09/93 (Testo Unico Bancario) (TUB) provides that banking activity is reserved to banks and other regulated finance institutions. “Banking Activity” includes accepting deposits (and other repayable funds) from the public and making credit available. Under Italian Legislative decree 415/1996, banks are also allowed to engage in any other financial activity (including trading) and make any other type of investment (both as principal and on behalf of third parties).

There are currently several draft Bills filed before the Italian Parliament (by different parties and with different contents) which proposed implementation in Italy of some variation on the Volcker Rule. The common aim of all the draft Bills is to ensure that risky investment activities are separated from retail business. Commercial banks, which collect savings and issue credit to families and businesses, should be strictly separated from investment banks, which instead operate on financial markets, issuing and trading stocks, bonds, and other speculative instruments.

To which financial institutions do the prohibitions relate?

Given that there are several Italian draft laws filed it is not possible, at the moment, to give a clear answer.

What exceptions to the ban on proprietary trading are contemplated by the legislation?

Given that there are several Italian draft laws filed it is not possible, at the moment, to give a clear answer.

Can any other entity within the relevant financial institution’s group of companies carry on the prohibited activity?

Given that there are several Italian draft laws filed it is not possible, at the moment, to give a clear answer.

When will the proposed legislation come into effect?

In the current circumstances, we are not able to predict whether any of the draft laws filed will be implemented in Italy and therefore cannot comment on timing.

Links to the proposed legislation and any other relevant material

The text of the nine drafts Bills currently filed before the Italian Parliament can be found here and here.