The so-called “Sostegni-ter Decree”
The Sostegni-ter Decree, which came into force on 29 March 2022, contains urgent measures in the field of support for businesses and economic operators related to the COVID-19 emergency.
The most relevant interventions include:
- establishment of the Fund for the revival of economic activities with an estimated expenditure of €200 million for the year 2022, aimed at granting aid in the form of non-repayable contribution to companies that have recorded, in 2019, an amount of revenues not more than €2 million and a reduction in turnover, in 2021, not lower than 30% compared to 2019;
- increase of €105 million of the single national tourism Fund and €50 million of the emergency Fund for the culture, entertainment and leisure sectors for the year 2022;
- support in favour of operators in the sports sector with non-repayable contributions, for an amount of €20 million, to reimburse health expenses for sanitation and prevention, as well as of any other expenses incurred in application of health protocols issued by sports bodies and validated by the competent government authorities.
Law no. 73 of 28 March 2022 (published in the Official Gazette no. 73 of 28 March 2022 – Ordinary Supplement no. 13) which converted Law Decree no. 4 of 27 January 2022.
Lowering non-professional investors’ entry thresholds into Italian alternative investment funds
On 30 March 2022 came into force MEF’s Decree no. 19 of 13 January 2022, which amended Ministerial Decree no. 30 of 5 March 2015 for redefining the conditions for participation in Italian AIFs by non-professional investors holding medium/large assets.
Therefore, Italian AIFs can now also be subscribed by:
- non-professional investors who, within the ambit of an investment advisory service, purchase units for an initial amount not lower than € 100 thousand, provided however that the total amount of such investment does not exceed 10% of their financial portfolio and taking into account that such minimum subscription cannot be split.
- individual portfolio managers purchasing units on behalf of non-professional investors for an initial amount not lower than € 100 thousand.
The access to a broader category of potential investors in illiquid medium/long-term assets and in unlisted companies will result in increasing portfolios’ diversification, achieving appreciable returns, and at the same time, providing alternative sources of financing to Italian unlisted companies (particularly, SMEs), while fostering Italy’s economic recovery. Undoubtedly, the focus remains on the protection of non-professional investors, in compliance with the safeguards dictated by MIFID II.
MEF Decree 13 January 2022 n. 19 (published in Official Gazette on 15 March 2022 no. 62)
Online incorporation of companies
Directive 2019/1151/EU introduced some key principles on the digitisation of company law, from company incorporation to company registration, with the aim of creating a single internal market by using online procedures in order to reduce costs, timeframes and administrative burdens.
Article 2 of Legislative Decree no. 183/2021, which implements the above-mentioned Directive, introduced the possibility to set up companies through the use of the Italian notariat platform by means of an electronic public deed, signed with a qualified electronic signature by the shareholders during a videoconference session. The share capital must be paid by bank transfer to an escrow account held by the notary, separate from his assets.
This procedure is currently reserved for limited liability companies and simplified limited liability companies having their registered office in Italy, while joint stock companies and partnerships are excluded. The territorial competence of the notary is identified in relation to the residence of at least one of the partners, if they are resident in Italy, otherwise for foreign partners any Italian notary is competent.
The foreign shareholder may participate in the session by videoconference in the presence of the notary, who identifies the shareholder by means of identity documents or other IT tools, thus avoiding the need to issue a power of attorney or even to travel to Italy.
Legislative Decree no. 183 of 8 November 2021 (published in the Official Gazette no. 284 of 29 November 2021) transposition of Directive 2019/1151/EU of the European Parliament and of the Council, of 20 June 2019 (published in the EU Official Journal on 11 July 2019)
Corporate/Laws of contract
Consob report on the corporate governance of Italian listed companies
The tenth Consob report on ownership structures, corporate bodies, shareholders’ meetings and transactions with related parties, based on data taken from statistical supervisory reports and public information, shows that:
- families continue to be the main ultimate controlling agent (64% of Italian listed companies), while the State and other local authorities are the main shareholder in about one in ten companies;
- the traditional model still prevails in the choice of governance for these companies. Within the board of directors, there is a slight reduction in average age, an increase in the level of education, greater diversification of professional profiles and a female presence on the boards of listed companies (41% of appointments);
- from 2011 to 2021, 670 disclosure documents were published for major related party transactions, mostly by smaller listed companies, mostly involving loans or contracts for the provision of goods or services.
Consob Report 2021 published on 30 March 2022
The proposed Directive on corporate sustainability due diligence
On 23 February 2022, the European Commission presented a proposal for a Directive on corporate sustainability due diligence, the aim of which is to succeed in the EU’s transition to a green economy that achieves sustainable development goals, proposing to:
- improve corporate governance policies to integrate risk management, human rights, environmental risks and impacts mitigation processes into business strategies;
- helping companies to identify and, where necessary, to stop or mitigate the negative effects of their activities on human rights, such as child labour and exploitation of workers, and on the environment, such as pollution and loss of biodiversity;
- standardise due diligence requirements in the single market and create legal certainty for businesses and stakeholders as regards conduct and responsibilities;
- establish a channel of access to redress in the event of human rights and environmental rights being infringed as a result of business conduct.
Proposal n. 2022/0051 for a Directive of the European Parliament and of the Council on Corporate Sustainability Due Diligence and amending Directive 2019/1937/EU
Regulation on the processing of personal data in connection with the management of complaints
On 30 March 2022, Bank of Italy regulation no. 75 of 22 March 2022 was published in the Official Gazette concerning the processing of personal data in the context of the management of complaints about the transparency of contractual conditions, the fairness of relations between intermediaries and customers, the rights and obligations of the parties in the provision of payment services.
The subject of the regulation is the activity of complaint management, which involves (i) processing of complaints and (ii) use of the information acquired through artificial intelligence tools, by the Bank of Italy as the data controller.
Regulation 22 March 2022 (published in the Official Gazette no. 75 of 30 March 2022)
Is the indexation clause an implied derivative financial instrument?
The third civil section has referred to the First President of the Court of Cassation, for possible assignment to the Joint Chambers of the Supreme Court, the controversial question if the indexation clause included in a leasing contract for immovable property under construction, which provides for the adjustment of the rent to exchange rates or interest rates, constitutes a derivative financial instrument.
Three judicial precedents have examined and resolved, in an opposing manner, the questions relating to indexation clauses from the point of view of content and validity. The first approach was that the clause was void because it did not allow the parties to know with sufficient certainty what the indexation criterion was and how much the rent could vary (Court of Cassation no. 16907/2019). A second orientation, on the contrary, admitted the clause defining it as bi-directional aimed at making both parties lose or gain depending on a precise random mechanism (Court of Cassation no. 26538/2021). Finally, a third approach denies the indexation clause the status of an autonomous derivative contract, but likens it to a domestic currency swap, as a mechanism for adjusting the pecuniary performance, lacking causal autonomy with respect to the transaction to which it is attached and not capable of circulating freely on the market (Court of Cassation no. 23655/2021).
The possible assignment of the matter to Joint Chambers would resolve the current jurisprudential contrast and, in particular, would give the clause a clear legal status from the point of view of the applicable legislation and its legal function.
Civil Court of Cassation, section III, decision of March 16 2022, no. 8603 – in Italian only
Specific nature of banking-financial arbitration
Banking-financial arbitration can hardly be traced back to typical traditional schemes (e.g. conciliation or arbitration). It is a fast and inexpensive out-of-court dispute resolution. Proceedings before the ABF can only be initiated by an appeal lodged by the customer against the financial intermediary. The appeal can be accepted or rejected; in which case no sentence can be issued against the client, nor can the intermediary propose counterclaims. The decisions of the ABF’s panel are not binding, nor do they become final or enforceable. The outcome of the proceedings is a decision, not an agreement between the parties, compliance with which be ensured by the reputational sanction represented by the publication of the notice on the ABF website.
Court of Rome, Section XVI, decision of 8 March 2022 no. 3654
The new ESMA guidelines on remuneration policies and practices under MIFID II
On 31 March 2022 new ESMA guidelines on the remuneration of staff involved in the provision of investment services, ancillary services, sales and advice on structured deposits were published, which is considered a crucial issue for investor protection.
Purpose of the guidelines is to improve clarity and foster convergence in the implementation of certain aspects of the new MiFID II remuneration requirements, replacing ESMA’s current guidelines on the same subject published in 2013.
ESMA’s Public Statement of 31 March 2022 “The new guidelines on remuneration policies and practices under MIFID II”.
Financial intermediation: validity of the framework agreement signed solely by the client
In the field of financial intermediation, the requirement of the written form of the framework-agreement is to be understood not in a structural but in a functional sense, having regard to the purpose of protection of the investor assumed by the rule. This requirement must be considered complied with, under penalty of nullity (so-called “protective” requirement) even if not expressly provided for, where the contract is in writing and it is sufficient that the client signs it and not also the intermediary, whose consent may well be inferred on the basis of his conduct.
Civil Court of Cassation, section I, decision of 17 January 2022, no. 1250
FSB analysis of the impact of Covid-19 on digitalisation
The FSB has published a report analysing how the Covid-19 pandemic has changed the way individuals and businesses interact with innovative financial services providers and traditional financial players. The report shows that the pandemic has had a significant impact on the structure of the financial services market. The changes are still ongoing, but the data collected so far shows that BigTech have further expanded their footprint in financial services, as have the larger FinTech and traditional financial institutions. In contrast, smaller FinTech and so-called “digital laggards” have benefited from less development and will need to prepare to compete to emerge in the industry in the future.
FSB Report of 21 March 2022 “FinTech and Market Structure in the COVID-19 Pandemic”
Legislative Decree no. 231/2001
Novelties in the field of environmental and cultural heritage protection
Law 9 March 2022 no. 22 made changes on the subject of cultural goods, inserting in the Criminal Code the new Title VIII-bis, which includes the offences already provided in the Code of cultural goods (Legislative Decree no. 42/2004) and new autonomous offences such as theft, embezzlement and receiving of cultural goods.
Further interventions concern: (a) an increase in the edictal penalties in force, implementing the constitutional principles for the protection of cultural and landscape heritage (see Art. 9 of the Italian Constitution); (b) the introduction of aggravating circumstances applied to common offences when they concern cultural goods (see Art. 518-terdecies which provides for the application of the aggravating circumstance of imprisonment from ten to sixteen years for anyone committing acts of devastation and looting concerning cultural or landscape heritage, or cultural institutions and places).
Amendments are also made to Decree 231, with the introduction of Articles 25-septiesdecies (offences against cultural heritage) and 25-duodevicies (laundering of cultural goods, devastation and looting of cultural and landscape assets). It provides for the administrative liability of entities when offences against cultural heritage are committed in their interest or to their advantage.
Specifically, Article 25-septiesdecies provides for the application of different financial penalties depending on the type of offence committed, as well as the prohibitory penalties set out in Art. 9 of Decree 231 (disqualification from engaging in business activities; suspension or revocation of authorisations, licences or concessions functional to the commission of the offence; prohibition on contracting with the public administration, except in order to obtain the provision of a public service; exclusion from facilitations, financing, contributions or subsidies and revocation of those already granted; prohibition on advertising goods or services) for a period not exceeding two years.
The first paragraph of Article 25-duodicies provides that, in relation to the offences of money laundering, devastation and looting of cultural and landscape assets, a financial penalty of between five hundred and one thousand shares is applicable. The second paragraph applies the sanction of definitive disqualification from exercising the activity referred to Article 16 of Decree 231, if the body or one of its organisational units is permanently used for the sole or main purpose of enabling or facilitating the commission of the offences referred to in the first paragraph.
Moreover, in relation to the environment, constitutional law no. 1 of 11 February 2022 amended Articles 9 and 41 of the Constitution, recognising environmental protection as an autonomous fundamental principle, although it was already guaranteed and protected both at national and supranational level.
Like offences against the cultural heritage, environmental offences (Title VI-bis of the Criminal code) therefore fall within the scope of the predicate offences referred to in Article 25-undecies of Decree 231, for which the administrative liability of the organisation is provided for when they are committed to the advantage or in the interest of the organisation itself.
Law 9 March 2022 no. 22 (published in Official Gazette on 22 March 2022 no. 68)
Constitutional Law 11 February 2022 no. 1 (published in Official Gazette on 22 February 2022 no. 44)
The cancellation of the company from the Companies Register does not affect its administrative liability
If a company accused of having committed a criminal offence in the interest and to the advantage of the entity is canceled from the Register of companies, the offence is not extinguished.
By this ruling, the fourth criminal section of the Court of Cassation departs from a previous orientation expressed by the second section (Cass. Pen. sect. II, decision of 7 October 2019, no. 41082) according to which, in the event of a physiological extinction (and not fraudulent) of an entity consequent to a bankruptcy proceedings, this can be assimilated to the death of the defendant, thereby determining the extinction of the trial against such entity.
On the contrary, the fourth section does not admit the extinction of the trial in the event of the extinction of an entity, firstly because the causes of extinction are exceptional rules, which must be expressly provided by the law (see Art. 8 of Decree 231 that provides for amnesty or Art. 67 which provides for a judgment of non-prosecution due to prescription), secondly because from a systematic reading of the provisions relating to transformative events (see Articles 28, 29, 30 and 33), the company following a transformation, demerger or merger is not exempt from liability, but pursuant to Article 42 of Decree 231 the trial continues against the company resulting from such modifying events or the beneficiary of a demerger, which takes part in the trial, in the state in which the same is found. Thirdly, it is a well-established orientation (also confirmed by Joint Chambers of the Supreme Court) that the bankruptcy of an entity does not determine the extinction of the administrative offence envisage under Decree 231 (decision no. 11170 of 17 March 2015).
Criminal Court of Cassation, section IV, decision of 17 March 2022 no. 9006
Measures to counter “wild” telephone marketing
A new public objections register has been set up (effective from 31 July 2022) and is kept and managed at the MED, which identifies the procedures for managing the processing of personal data for the purposes of sales or commercial promotion, in accordance with the GDPR.
Among the most relevant novelties:
- each operator, in order to carry out the processing of national fixed and mobile numbers or postal addresses listed in directories, through the use of the telephone, with or without the intervention of a human operator, for advertising or sales purposes, must submit an identification request to the service operator. Once authorisation has been obtained, access is limited to 12 months, subject to the payment of an annual or periodic rate;
- operators using telephone advertising and telephone sales systems are required to consult the public objections register on a monthly basis, and in any event before the promotional campaign begins, and to update their lists;
- each contracting party may request that the number it holds be entered in the register in order to object to the processing of such data for advertising and sales promotion purposes. Such entry shall be for an indefinite period, unless revoked by the subscriber.
Presidential decree no. 26 of 27 January 2022 (published in the Official Gazette no. 74 of 29 March 2022, entered into force on 13 April 2022)
When the marketing campaign is unlawful interference
Where consent to the marketing campaign has been denied, any subsequent activity carried out by automated communications to obtain consent qualifies as unlawful interference.
Civil Court of Cassation, section I, decision of 28 March 2022, no. 9920
List of abbreviations
ABF: Banking Financial Ombudsman
AIF: Alternative Investment Fund
CONSOB: The national financial markets Authority
Decree 231: Legislative Decree no. 231 of 8th June 2001
ESMA: European and Securities Market Authority
EU: European Union
FSB: Financial Stability Board
GDPR: Regulation (EU) 2016/679 of the European Parliament and of the Council of 27th April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC.
MED: Ministry of Economic Development
MEF: Ministry of Economic and Finance
MIFID II: Directive 2014/65/EU on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/E
SME: Small and Medium Enterprises
Sostegni-ter Decree: Law no. 73 of 28 March 2022 (published in the Official Gazette no. 73 of 28 March 2022 – Ordinary Supplement no. 13) which converted Law Decree no. 4 of 27 January 2022.