The following ten things are important features of the Italian legislation relating to the creation of non-possessory pledges in Italy.

  1. Non-possessory pledge. What is it?

    In order to facilitate access to credit for companies and entrepreneurs registered in the Italian Commercial Register (Registro delle Imprese), the Italian Law Decree No. 59 of 3 May 2016 (the Law Decree) introduced a new type of security in Italy: the non-possessory pledge over movable assets (the Non-possessory Pledge). This new type of security became effective from 15 June 2023 and creates a security akin to a “floating charge” over movable assets and chattels.
  2. What is the main advantage of creating a Non-possessory Pledge?

    Companies and entrepreneurs registered in the Italian Commercial Register (Registro delle Imprese) continue to be able to use and have available pledged assets in the ordinary course of their business. In the event that the pledged asset is either transferred or sold, the security is automatically transferred to, respectively, the asset arising from the disposal or to the proceeds of the sale or the substitute asset purchased from the proceeds, without creating a new security.
  3. Who can create a Non-possessory Pledge?

    Any company and entrepreneur registered in the Italian Commercial Register (Registro delle Imprese) (the Companies) may create a Non-possessory Pledge.
  4. What assets can be subject to a Non-possessory Pledge?

    A Non-possessory Pledge may be created over receivables and movable assets related to the business activity of the Companies (i.e., containers, semifinished products, etc.) but excluding registered movable assets (beni mobili registrati) (e.g., ships, aircrafts, motor vehicles).
  5. Which credits can be secured by the Non-possessory Pledge?

    The Non-possessory Pledge may secure both current and future credit facilities. In the latter case, the credits must be either fixed or determinable, with a provision in the documentation specifying the maximum amount to be secured.
  6. How can the Non-possessory Pledge be created?

    A Non-possessory Pledge must be created by means of a written deed1 which must include: (i) the details of the secured creditor; (ii) the identity of the debtor (if different from the pledgor); (iii) the identity of the pledgor; (iv) a description of the pledged assets; (v) the guaranteed amount; and (vi) the maximum secured amount (the Agreement).
  7. Is any registration required for a Non-possessory Pledge?

    Yes. For a Non-possessory Pledge to be effective and enforceable against third parties, the Agreement must be submitted to the “electronic register for non-possessory pledges” (established at the Italian Revenue Agency (Agenzia delle Entrate)), for registration, together with an online application form2.
  8. When does the registration of the Non-possessory Pledge expire? Can the registration be renewed?

    Registration of the security expires after 10 (ten) years.

    The Non-possessory Pledge may be renewed by submitting an online application form stating the intention to renew the registration of the security. If the registration of the security has expired, the secured creditor may proceed with a new registration of the security: however, it will then rank from the date of the new registration.
  9. How can a Non-possessory Pledge be released?

    In order to release the security, a written deed including the secured creditor’s consent must be submitted to the “electronic register”, together with an online application form.
  10. How is a Non-possessory Pledge enforced?

    Upon the occurrence of an event of default, the secured creditor may, upon notice, proceed:
    1. to sell the pledged assets and to retain the proceeds of the sale in satisfaction of the secured claims;
    2. to enforce or to assign the pledged receivables up to an amount equal to the maximum secured amount;
    3. if so provided in the pledge agreement, to lease the pledged assets by setting off the rentals in satisfaction of the secured creditor’s claims, up to the maximum secured amount; and
    4. if so provided in the pledge agreement, to transfer the pledged assets to the secured creditor, up to the maximum secured amount3.

Footnotes

1   The written deed must be either a notarial deed or an agreement authenticated by the notary.

2   The online application form must include, inter alia: (i) information relating to the parties (secured creditor, debtor and, if applicable, pledgor) (including, inter alia, the tax code of the parties and the certified email addresses (PEC) of the parties); (ii) date of the Agreement; (iii) the maximum guaranteed amount of the secured obligations; and (iv) the main features and information relating to the pledged assets.

3   The Law Decree provides for more detailed rules on this regard.



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