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Italy: What happened in 2018 and significant events in 2019

Italian Law: Year in Review 2018 and Year to Come 2019 summarises a selection of the major developments last year, and major developments expected over the coming year, with links to further reading, where available.

A broad range of legislative updates were made in 2018. These updates together with a significant number of expected new legal and regulatory changes will have a significative impact in a number of key sectors.

Explore our overview of key developments below.

Updates in


key areas in 2018 and 2019

Significant legal and regulatory events in 2018

Explore the tabs below to review the key developments you need to be aware of from 2018

Capital Markets

Italian Senior Non Preferred Bonds:

On 29 December 2017, Law no. 205 of 27 December 2017 (the “2018 Budget Law”) has been published on the Italian Official Gazette and it entered into force on 1 January 2018. The 2018 Budget Law amends Legislative Decree no. 385 of 1 September 1993 (the “Italian Banking Act”) and Legislative Decree no. 58 of 24 February 1998 (the “Italian Financial Services Act”). The 2018 Budget Law allows banks and financial intermediaries to issue “non preferred” senior liabilities, a new category of “second level unsecured debt instruments”, which rank below senior unsubordinated liabilities but above subordinated claims and shares. The Italian lawmaker has fixed a minimum threshold of 250 000 euro for the issuance of a SNP bond. The SNP bond can only be underwritten by quailed investors.

Completion & Antitrust

Antitrust compliance programmes:

On 4 October 2018, the Italian Antitrust Authority (IAA) has adopted the guidelines on how to structure an antitrust compliance programme and its treatment in the context of an antitrust investigation. The Guidelines provides undertakings with guidance on (i) the definition of the content of the compliance programme; (ii) the request for an assessment of the programme for the purposes of awarding possible mitigation; (iii) the criteria that the ICA intends to adopt in its assessment for the purposes of awarding mitigation.

Corporate and Capital Markets

Market Abuse Regulation (MAR):

On 14 September 2018, Legislative Decree no. 107 of 10 August 2018 has been published on the Italian Official Gazette. It entered into force on 29 September 2018. The Legislative Decree introduces the necessary amendments to the Italian Financial Services Act in order to remove the inconsistency between the old provisions contained therein and the new ones set forth by MAR.

In detail, the amendments to the Italian Financial Services Act cover the following matters: (i) the definition of “privileged information” (ii) communication obligations placed on listed companies with regard to privileged information, (iii) communication obligations placed on companies with shares spread among the public, (iv) relevant shareholders and insider dealing obligations, (v) the purchase of treasury shares.

Data protection


The EU General Data Protection Regulation 2016/679 (“GDPR”) became applicable in all Member States on 25 May 2018. On 4 September 2018, Legislative Decree no. 101 of 10 August 2018 has been published on the Italian Official Gazette; it entered into force on 19 September 2018. The Legislative Decree intends to align the Italian data protection framework with the provisions of the GDPR and therefore introduces substantial changes to Legislative Decree no. 196 of 30 June 2003 (the “Italian Privacy Code”).


Law Decree “on urgent provisions for employees’ and businesses’ dignity”:

Law Decree no. 87 of 12 July 2018, converted into Law no. 96 of 9 August 2018 (also known as “Dignity Decree”), came into force on 14 July 2018 and amended certain provisions of the Italian employment legislation. The Law sets forth new rules on fixed-term employment contracts which are now subject to stricter requirements. The infringement of any of the rules provided for fixed-term contracts triggers the conversion of the fixed-term employment contract into an open-ended employment contract. Moreover, the employment relationship between temporary agency workers (lavoratori somministrati a termine) and staff agencies (agenzie di somministrazione) is also subject to the same rules applied to fixed-term contracts. Finally, the Law provides for an increase both in the minimum and in the maximum indemnity to which employees hired under the so-called “tutele crescenti” regime are entitled in the event of an unlawful dismissal.

Partial inconsistency of Legislative Decree no. 23 of 4 March 2015 with the Italian Constitution:

With decision no. 194 of 8 November 2018, the Italian Constitutional Court declared the inconsistency of art. 3, paragraph 1, Legislative Decree no. 23 of 4 March 2015 (also known as “Jobs Act”) with articles 3, 76 and 117 of the Italian Constitution, since it provides that the indemnity to which employees who have been unlawfully dismissed are entitled is calculated solely on the basis of their length of service, without taking into consideration other criteria, listed by the Court, such as the number of employees working at the company, the size of the company, the general conduct of the parties and their conditions.

Corporate Governance: the provisions on remuneration and incentives policies applied by banks and banking groups:

The Bank of Italy has amended its Circular no. 285 of 17 December 2013 regarding the provisions on remuneration and incentives policies applied by banks and banking groups. The amendments to the Circular, submitted to public consultation on 14 March 2018, are mainly aimed at adapting the Italian regulatory framework to the European Banking Authority (“EBA”) guidelines on the matter, issued on 27 June 2016 to implement Directive (EU) 2013/36 (“CRD IV”). The remuneration and incentives policies compliant with the new provisions must be submitted, at the latest, to the approval of the shareholders’ meeting convened to approve the 2018 financial statement. Moreover, banks, within the limits set forth by collective agreements, are required to: (i) apply the new provisions to individual employment contracts signed starting from 1 April 2019; and (ii) promptly adapt the individual employment contracts in place to the new provisions and, in any case, within 1 April 2019, with reference to the members of the strategic supervision, management and control bodies and within 30 June 2019 for the other employees.


Benchmark Regulation:

On 20 November 2018 the Italian Government has preliminary approved the Legislative Decree implementing Regulation (EU) 2016/1011 (the Benchmark Regulation, “BMR”). The BMR introduces a regime for benchmark administrators that will ensure the accuracy and integrity of benchmarks and it will introduce a code of conduct for contributors of input data requiring the use of robust methodologies and sufficient and reliable data.


On 23 August 2018 the Bank of Italy has submitted to public consultation a new set of provisions implementing the MiFID II/MiFIR package with regard to the matters falling within its exclusive competence. The scheme amends and completes the rules currently in force and provides for the reorganization of the provisions concerning obligations placed on intermediaries providing investment services and collective asset managers. The consultation ended on 23 October 2018. The most significant amendments concern: (i) the rules on corporate governance, remuneration and incentive schemes and administrative and accounting responsibility; and (ii) the authorisation for banks to provide investment services.

Insurance Distribution:

On 16 June 2018, Legislative Decree no. 68 of 21 May 2018 has been published on the Italian Official Gazette and entered into force on 1 July 2018. The Legislative Decree implements Directive (EU) 2016/97 on insurance distribution (“IDD”) by introducing more efficient and simplified systems for the management of registers and for the supervision on undertakings and intermediaries. Legislative Decree no. 209 of 7 September 2005 (the “Italian Code on Private Insurance”) has been amended accordingly. The IDD represents a significant increase in the level of consumer protection, although in many ways it consolidates into European law principles and rules that were already present in Italian framework. Following the implementation of IDD into Italian law, on 2 August 2018 the Italian Supervisory Authority on Insurance (IVASS) has issued three new regulations (no. 39, 40 and 41) respectively on (i) administrative sanctions; (ii) transparency, advertising and manufacturing of insurance products; and (iii) insurance and reinsurance distribution.

PSD2 – Payment Services Directive e IFR – Interchange Fees Regulation:

On 13 January 2018, Legislative Decree no. 218 of 15 December 2017 has been published on the Italian Official Gazette; it entered into force on 13 January 2018. The Legislative Decree, which implements Directive 2015/2366 (Payment Services Directive, “PSD2”) into Italian Law, is aimed at increasing the transparency, the competition and the integration of the EU market of the payment services and the development of the e-commerce. It also enhances the rights of the payment services’ users and it appoints the Bank of Italy and the IAA as the relevant supervisory authorities for the application of PSD2 into Italy.

Public Law

Urgent provisions for the city of Genoa:

On 15 November 2018, Law Decree no. 109 of 28 September 2018 has been converted into Law no. 130 of 16 November 2018. The Law introduces urgent provisions for the city of Genoa and for the reconstruction of the Morandi Bridge, and provides for further measures, which inter alia include: (i) new risk prevention obligations on toll-road concessionaires with respect to infrastructures; (ii) new powers granted to the Transportation Authority (ART) with respect to tariffs and regulatory frameworks of the existing toll-road concessions; (iii) the appointment of a new National Agency for the safety of railways, road and toll-road infrastructures (ANSFISA).


2018 Budget Law:

From a tax perspective, the 2018 Budget Law has introduced the following tax measures: (i) new "web tax" on digital transactions; (ii) dividends and capital gains from qualifying holdings taxed at 26%; (iii) amendments to the notion of permanent establishment; (iv) tax step-up of intangibles recognised in the consolidated financial statements; (v) more certainty as to the Registration Tax; (vi) extension of long-term savings plans (PIR) to real estate companies; (vii) amendments to the tax regime of dividends received from entities resident in jurisdiction with a privileged tax regime; (ix) stricter rules in relation to the deductibility of interest expenses for corporate tax purposes.

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"2018 saw a large number of legal and regulatory changes impacting our clients’ businesses. Our review aims to give you an overview of the key ones you may have missed, and looks ahead at what 2019 may bring."

Lucio D’Amario, Partner, Partner K&L


Significant legal and regulatory events in 2019

Explore the tabs below to review the key developments we expect to see in 2019

Class Action

The draft law on the Class Action is currently under examination by the parliamentary committees. The draft law sets forth the following provisions: (i) extension of the scope of the class action beyond the consumer law by eliminating any reference to consumers and users. All those who have been injured with regard to the same homogenous individual right will be entitled to join the class action; (ii) the action will be given to each member of the class, as well as non-profit organizations or associations whose statutory object is the safeguarding of the aforementioned rights and which are enrolled in the Register held by the Ministry of Economic Development; (iii) the recipients of the class action will be companies and bodies that manage public services or services of public interest, with regard to conducts and acts committed in the performance of their respective activities; (iv) extension of the instruments of protection, with the provision of a collective inhibitory action towards the authors of harmful conducts committed to the detriment of a plurality of individuals.

Corporate and Capital Markets

Prospectus Regulation:

The final implementing measures of the Prospectus Regulation are due to be issued in July 2019. Key areas of change will be the exemptions from the requirement to produce a prospectus, the treatment of risk factors and the regime for secondary issuances.


Shareholders rights directive:

The Ministry of Economy and Finance has published for public consultation (ending on 18 December 2018) a draft Legislative Decree amending the Italian Civil Code, the Financial Services Act, the Code on Private Insurance and Legislative Decree no. 252 of 5 December 2005 (the Italian Pension Funds Law) to implement into Italian Law Directive (EU) 2017/828 (the Shareholders rights directive 2, “SHRD2”), whose transposition deadline is scheduled on 10 June 2019. The SHRD2 aims to encourage investors to engage with companies for the longer term and introduces rules for more transparency of ownership, voting and investment strategies and Europe-wide ‘say on pay’.

Debt Capital Markets

EU proposes new framework for European Covered Bonds

On 12 March 2018, the European Commission published a proposal for a new, pan-EU legal framework for covered bonds. The proposal, comprising a draft Directive and a draft Regulation, forms part of a series of initiatives relating to the Capital Markets Union. The proposal aims to create clear and consistent rules on the structural elements of covered bonds, their capital treatment and their supervision, with a view to fostering growth in covered bond markets across the EU. The proposal will now undergo scrutiny and amendment by the European Parliament and the Council of the EU under the EU’s ordinary legislative procedure. EU law makers will hope to finalise this legislation before the European Parliament elections in May 2019. If they succeed, then the new rules could apply from one year later (i.e. mid-2020). As to the Italian framework, on 25 September 2018 the Bank of Italy has amended its Circular no. 285 of 17 December 2013 with regard to covered bonds, with a view to anticipate, in part, the content of the European Commission's proposal.

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EU NPL reforms:

In March 2018, the European Commission published a draft Directive and Regulation, aimed at accelerating the reduction of NPLs in Europe. The proposals in the draft Directive would require implementation by 2021.

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EU securitisation regulation:

On 1 January 2019 it will become applicable in all EU Member States Regulation (EU) 2017/2402 (“Securitisation Regulation”), which lays down a general framework for securitisation (by consolidating existing risk retention, disclosure and due diligence requirements) and establishes a new regime for simple, transparent and standardised (STS) securitisations.


IORP2 Directive:

On 6 September 2018 the Italian Government has preliminary approved the Legislative Decree implementing Directive (UE) 2016/2341 on the activities and supervision of institutions for occupational retirement provision (“IORP2 Directive”), which needs to be implemented by January 2019. The IORP2 directive lays down rules for the taking-up and pursuit of activities carried out by IORPs and applies to all IORPs. Where, in accordance with national law, IORPs do not have legal personality, Member States will have to apply the directive either to those IORPs or, subject to certain exceptions in Article 2, to those authorised entities responsible for operating them and acting on their behalf.


PRIIPs regime review:

The European Commission is expected to take legislative action in order to avoid the duplicating information requirements applying from 1 January 2020 under the UCITS KIID and the PRIIPs KID, and to address key issues that have arisen from the practical application of the PRIIPs Delegated Regulation on KID.

Anti-money laundering:

The 5th Anti-money laundering Directive (“AMLD5”) has entered into force in July 2018 and all Member States need to be implement it by January 2020. The Italian regime is already compliant with some of its provisions, as they have been taken into account in the issuance of Legislative Decree no. 90 of 25 May 2017, which was actually implementing into Italian law the 4Th Anti-money laundering Directive (Directive 2015-849-EU). To update its regulations to the news brought by Legislative Decree no. 90 of 25 May 2017, in April 2018 the Bank of Italy has published for public consultation: (i) a revised regulation on organisation, procedures and internal controls of financial intermediaries for AML purposes, which introduces a more systematic use of the risk-based approach; and a (ii) revised regulation on customer due diligence, aimed at, inter alia, reflecting the ESAs joint guidelines on simplified and enhanced customer due diligence and risk factors that were published on 4th January 2018.

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Insolvency and Restructuring

Insolvency Reform:

On 8 November 2018, the Italian Government preliminarily approved a new Code on corporate crises and insolvencies, aimed at implementing the principles set out in Law no. 155 of 19 October 2017 (“Insolvency Reform Delegation Law”). The draft Code has been passed onto the Italian Parliament, whose opinion will be followed by the Government’s final approval. The Insolvency Reform Delegation Law (also known as Rordorf Reform, after the name of the Commission Chairman, dott. Renato Rordorf) aims at reforming the law applicable to insolvency procedures, in particular by implementing an early diagnosis of enterprises’ problems and preserving the commercial value of entrepreneurs who are undergoing contingent financial difficulties. Among the main legislative amendments: (i) the term “bankruptcy” is replaced by the term “judicial liquidation” after the example of other European countries (e.g. France and Spain). The underlying reason of the definition change lies with the negative meaning traditionally attributed to the term which is used to refer to personal failure; (ii) turnaround proposals which entail the continuity of the enterprise are given priority over the others; (iii) a single and unified procedure replaces the different special procedures currently in force; (iv) duration and costs of insolvency procedures are cut; (v) the establishment of a new Register of professionals specialised in dealing with insolvency procedure under the permission of the Tribunal. The law also sets forth the specific enrolment requirements for candidates: professionalism, experience and independence; (vi) the harmonisation of insolvency procedures with the safeguarding of the employment and of the income of workers.


DAC 6 Directive:

From 30 July to 28 September 2018, the Ministry of Economy and Finance has held a public consultation on the draft Legislative Decree aimed at implementing into Italian law Directive (EU) 2018/822, which amends Directive (EU) 2011/16 as regards mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements (DAC 6 Directive). Member States have to adopt and publish, by 31 December 2019, the laws, regulations and administrative provisions necessary to comply with the Directive.

Anti Tax Avoidance Directives (ATAD I/II):

On 28 November 2018, the Italian Government has approved the Legislative Decree set to implement into Italian legislation certain provisions laid down in Directive (EU) 2016/1164 (“ATAD”), as amended by Directive (UE) 2017/952 (ATAD 2). The Italian Parliament has conferred to the Government the authority to transpose the ATAD within 31 December 2018, in line with the deadline contained in the Directive (except for the exit tax provisions, whose deadline is set at 31 December 2019). The Legislative Decree has not been published yet on the Italian Official Gazzette. In detail, the ATAD amends the following matters: (i) limits on the deductibility of passive interests; (ii) recourse to the exit tax; (iii) introduction of a general anti-abuse provision; (iv) controlled foreign companies’ discipline; (v) neutralization of hybrid mismatches.

Explore our Year in Review 2018 and Year to Come 2019 series across 20+ jurisdictions and a number of topics.

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