[Newsletter n. 15]
On the 1st of January 2019, the Budget Law for 2019 (Law No. 145/2018) came into force. This law contains, inter alia, certain provisions that have an impact on the domestic banking and financial regulatory framework. In particular, we have highlighted the following:
• [Venture Capital] the allocation of resources for 110M€ to support the Venture Capital sector (30M€/year between 2019 and 2021 and 5M€/year from 2022 to 2025). The funds can be invested in Venture Capital entities (close-ended funds and SICAF) in any investment phase, from seed/start-up/early-sage to scale-up financing (see Article 1, paragraph 209). In aaddition, the introduction of the obligation to invest 15% of dividents distributed by the State-owned companies in such VC funds. The Budget Law also provides for private incentives to VC Funds as described below under PIR;
• [PIR] the extension of the favourable tax treatment of long-term savings plans (“Piani Individuali di Risparmio”) to unlisted SMEs and innovative start-ups (previously excluded from the PIR). Indeed, with the aim to foster small companies, in addition to the increase of the maximum amount that pension schemes are allowed to invest in PIR and qualified investments (which include VC Funds) from 5 to 10% of their assets, the Budget Law adds two further requirements to the existing conditions to benefit of PIR tax treatment: (i) at least 3,5% the of PIR total assets shall be invested in units or shares of Venture Capital Funds, and (ii) at least 3,5% the of PIR total assets shall be invested in financial instruments issued by SMEs listed in MTFs (i.e. AIM).
However, the above provisions shall be implemented through a decree by the Minister of Economic Development and therefore to date it is not yet possible to subscribe new PIR (see Article 1, paragraph 211 and following);
• [Start-ups] the increase from 30 to 40% of the tax deduction rate for investments in start-up. The rate goes up to 50% in case of acquisition of the whole share-capital (full exit) subject to the condition that the investor remains invested for three years (see Article 1, paragraph 218);
• [Innovation] the allocation with the Ministry of Economic Development of a 15M€ provision for the development of technologies and applications of artificial intelligence, blockchain and internet of things (see Article 1, paragraph 226 and following).
The introduction of a grant to SMEs investing in innovation and digital technologies. In particular, the Budget Law introduces – for the next two tax periods (2019 and 2020) – a voucher to cover part of the costs of expert advice to implement technological transformation as envisaged by the National Industry 4.0 Plan. The voucher will be equal to 50% of such costs up to 40,000€ for micro and small enterprises and 30% up to maximum of 25,000€ for medium enterprises (see Article 1, paragraph 228 and following);
• [Equity crowdfunding] the extension of the definition of equity crowdfunding set forth in Article 1(5-novies) of Italian Financial Act (TUF) to include online platforms that facilitate fund raising through bonds or other debt instruments (see Article 1, paragraph 236). To this end, a new paragraph 1-ter has been added to Article 100-ter of the TUF providing that crowdfunding portals may allow the subscription of bonds and other debt instruments only by professional clients (and other specific categories of investors identified by Consob) and on a separate section than that where it is possible to subscribe equity instruments (see Article 1, paragraph 238);
• [Financial Advisors] the clarification that existing financial advisors (i.e. those who were providing financial advice before 31 October 2007) who are not yet enrolled in the new OCF Register, can continue to operate without holding clients’ money or financial instruments in any case no later than (i) 180 days from the date of application for registration with OCF, if this was filed before 30 November 2018, or (ii) the date of the decision about their application (see Article 1, paragraph 237);
• [Italian UCITS] additional measures have been introduced to ensure the independence of the experts appointed for the evaluation of UCITS’ assets (see Article 1, paragraph 239).
In particular, the Budget Law sets out:
– the obligation to refrain from making an evaluation in case of conflict of interests;
– the duty of the fund manager to verify, prior to assigning the experts to other tasks not directly related to the evaluation of the fund’s assets, that the new tasks do not affect their independence or give rise to conflict of interests;
– the possibility of one renewal of the assignment for the valuation of assets and a cooling-off period of two years before a new appointment;
• [Investor Protection] the set up of a Fund to indemnify investors (FIR). The purpose of the FIR is to provide indemnities to investors holding shares or subordinated bonds, who have suffered unfair damage from Italian banks subject to compulsory winding-up (liquidazione coatta amministrativa)between 16 November 2015 and 1 January 2018, due to repeated breaches of the obligations of information, diligence, correctness, good faith and transparency pursuant to the TUF. Eligible counterparties, professional clients and top management of the said credit institutions, as well as their relatives, are not entitled to benefit of the FIR (see Article 1, paragraph 493 and following);
• [Securitization spv] the amendment of Law 130/1999 on securitizations to allow spvs (i) to purchase real estate assets and registered movable as guarantees, (ii) to grant loans to companies (even small sized ones, with total assets of at least 2M€), and (iii) to subscribe bonds issued by companies established in the form of S.r.l. (see Article 1, paragraph 1088 and following).
Please do not hesitate to contact us should you need any further clarification on the above and any related matters.
Contacts:
Vito Vittore
Partner
Elena Pagnoni
Partner
Roberta Talone
Associate
