Nowadays it is paramount for new businesses operating in financial markets to fully embrace technological and regulatory developments.
On 14 February 2016, the Italian government intervened in the field of asset management by introducing some measures to boost companies’ credit supply and completing the regulatory framework for the granting of loans by Alternative Investment Funds (AIFs).
New rules establish how the Italian AIFs and EU AIFs can carry out operations of direct lending, hence ending regulation and interpretative uncertainties that had characterised earlier interventions.
The new decree law stipulates that loans provided in Italy by national or European AIFs require compliance with the obligations relating to transparency of contractual conditions and customer relations.
Operators not meeting their obligations will be prosecuted according to Italian banking sector regulations.
EU AIFs are allowed to carry out the activity of funding in Italy as long as:
- They are authorised by the competent authority of the Member State of origin to invest in loans in the country of origin.
- They have a sound financing structure, especially on the arrangement for participation, similar to that of the Italian AIFs investing in credits.
- The rules of the home country of the EU AIF in terms of preservation and spreading risk, including the leverage limits, are equivalent to the standards set for the Italian AIFs investing in loans.
- The equivalence with Italian rules can be verified with reference to statutory or regulatory provisions and provided that the competent authority of the Member State of origin ensures compliance.
Whenever an EU AIF intends to provide funding in Italy from their own assets it must notify its intention to the Bank of Italy, who could deny the operation by notifying the AIF within 60 days of the notification, during this time the EU AIF cannot operate.
On the whole, there are Epic SIM, even for the smallest ones.
A nonbanking direct lending market will only successfully thrive if investors can operate in an arena where key information is readily available and procedures are clear.
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