Italy: Italian Government Enacts Further Measures To Boost Italian Lending Market

During the last two years, the Italian government has focused on reforming the Italian lending market, with the aim of boosting access to financing for Italian businesses and improving bankruptcy and enforcement proceedings in Italy. As part of this reform process, the Italian Council of Ministers enacted Decree No. 59 of May 3, 2016 (the "Decree").1 The Decree introduces measures designed to, among other things: (i) create a new security consisting of a "non-possessory pledge" (i.e., floating charge), (ii) establish the "patto marciano" agreement, which permits out-of-court appropriation of real estate assets securing financings, and (iii) reduce the length of time and improve efficiency of enforcement and insolvency proceedings.

This Commentary summarizes the principal innovations introduced by the Decree.

Non-Possessory Pledge

The "non-possessory" pledge (i.e., floating charge) introduced by the Decree offers Italian businesses the possibility of securing the monetary obligations connected with their business activity without dispossession of the pledged assets, as had previously been required. This security may be applied only to movable assets,2 present or future, to be used for business purposes (e.g., machineries or raw materials), which also may be differentiated by general reference to the relevant asset class. The pledgor maintains the right to dispose of, even by selling, the pledged assets. Should this be the case, the pledge will be automatically extended over replacing assets or sale proceeds, as applicable.

The non-possessory pledge is created through the execution of a written deed bearing a firm date (data certa), which must include, inter alia, the details of the borrower and the secured creditor, the description of the pledged asset, the secured obligations, and the maximum secured amount.

The enforceability against third parties and insolvency proceedings is obtained through the registration of the pledge in an ad hoc electronic register managed by the Italian tax authorities.3 This should have, inter alia, more non-possessory pledges over the same asset but with a different ranking of priority. The registration is valid and effective for a period of up to 10 years but may be renewed before the relevant maturity date.

The enforcement allows the secured creditors to sell the pledged assets under a bid process based on a valuation rendered by a third-party appraiser appointed in advance by the pledgor and the secured creditor, acting jointly. In this case, the secured creditor has the right to fulfill its claims with the sale proceeds, provided that any residual proceeds are returned to the pledgor. In addition, the secured creditor has the right to enforce the security by (i) receiving the rent paid by the lessee if the pledged asset is leased; or (ii) appropriating the pledged assets to the extent that the security agreement provides for criteria and procedures to be adopted to appraise the market value of such assets.

Enforcement of the non-possessory pledge also may take place in the context of a bankruptcy scenario.

Introduction of "Patto Marciano" for Corporate Financings

The Decree introduces the possibility for financial institutions and businesses entering into a new facility or restructuring an existing one to agree to a so-called "patto marciano."4 This represents a significant innovation since, as a rule, transfer of ownership of a pledged or mortgaged asset to secured creditors upon default of the borrower (i.e., divieto del patto commissorio) is generally prohibited.

In practice, security interest providing for "patto marciano" allows a secured creditor (or any subsidiary or affiliated entity thereof) to obtain transfer of full legal ownership title over real estate assets5 securing commercial loans—granted by banks or other entities authorized to carry out lending activity in Italy—conditioned upon default by the borrower. For the purpose of the Decree, a "default" will be deemed to occur (i) in the case of a monthly repayment schedule, if at least three installments remain unpaid for more than six months, or (ii) in any other case, if only one installment or the final bullet payment, as applicable, remains unpaid for more than six months.

The agreement providing for security based on "patto marciano" will be executed in notarial form.

To enforce the security, the creditor must notify the borrower, the security provider if other than the borrower, and any other secured creditor of its intention to enforce the security. After 60 days from the above notification, the creditor may ask the president of the competent court to appoint a third-party expert to appraise the property. The expert will evaluate the property and inform the borrower, the secured creditor, and any other interested party of its appraisal.

Should the debtor challenge the expert appraisal, the creditor may still carry out the enforcement, provided that the debtor's claim will be relevant only with regard to the determination of the potential amount payable by the secured creditor to the borrower, as per above.

In the case of enforcement, the secured creditor is obliged to pay to the security provider an amount equal to the difference, if positive, between the estimated market value of the property and the amount of the outstanding debt.

The Decree states that the condition precedent to the transfer of the property to the secured creditor is fulfilled when the secured creditor is informed by the third-party expert of its appraisal or, alternatively, when the secured creditor pays the amount due, if any, to the debtor.

Fulfillment of the condition precedent to the transfer must be confirmed through a written statement rendered in notarial form, for registration and enforceability purposes.

The above security also may be enforced under a bankruptcy scenario.

Electronic Register of Enforcement and Insolvency Proceedings

The Decree provides for the Italian Ministry of Justice's establishment of an electronic register of, inter alia, the following proceedings: (i) enforcement proceedings, (ii) insolvency proceedings, (iii) debt rescheduling and debt restructuring agreements, and (iv) extraordinary administration procedures.

This innovation should allow all interested parties to timely collect information on possible proceedings affecting the debtors and their relevant assets.

Amendments to Enforcement and Insolvency Proceedings

The Decree introduced changes to the legal provisions governing enforcement procedures with the aim of reducing the length of time required to satisfy creditors' claims.

Secured creditors that may become assignees of the mortgaged assets are now entitled to elect a third party as actual assignee of the property. This should allow secured creditors to avoid the typical downsides connected with foreclosure procedures (e.g., duration of the process and pathologic discount sales, etc.) by directly individuating third parties interested in acquiring the mortgaged assets unless for supervening or previously unknowable circumstances.

The Decree reduced the terms for filing challenges against enforcement proceedings. Notably, debtors are no longer entitled to raise objections following the filing of an application for the forced sale of the debtor's assets.

Italian courts are now obliged immediately to issue enforceable payment orders in respect of unchallenged claimed amounts. In the past, such decisions were taken by Italian courts on discretionary basis.

Finally, the Decree provides for a minor set of amendments to the Italian bankruptcy law. The scope of such amendments is to reduce the duration of bankruptcy proceedings by approving the performance of certain procedural steps through electronic means.


[1] The Decree will be converted into law within 60 days from its publication in the Italian Official Gazette; otherwise, it will cease to be effective and will be considered to have never entered into force. The Italian Parliament may carry out amendments, also material, to the Decree during its conversion process.

[2] Movable assets to be registered by operation of law in public registers, such as cars, ships, and aircrafts, fall outside the scope of this security.

[3] The registration of the non-possessory pledge will be possible only upon establishment of the relevant register. In this respect, please note that the Ministry of Finance will enact specific implementing measures within 30 days of the Decree's date of conversion in law.

[4] The "patto Marciano" is an agreement according to which, upon the borrower's default, the secured creditor may acquire ownership of the pledged or mortgaged asset, to the extent that: (i) the value of the asset is estimated by a third-party expert; and (ii) the secured creditor returns to the pledgor any excess amount between the value of the pledged asset and the debt due and payable.

[5] Primary dwelling properties fall outside the scope of the Decree.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions