Italy's New Rules on Notes and Commercial Paper: Update

August 9, 2012

On August 3, 2012 the Italian Parliament adopted a law (the “Law”) to convert, with amendments, Law Decree No. 83 of June 22, 2012 (the “Decree”), that introduced important measures aimed at stimulating the Italian economy (the so called “decreto sviluppo” or “development decree”). The Law is expected to be published on the Italian Official Gazette on August 11, 2012. This memorandum outlines the new rules introduced by the Decree, as amended by the Law, on: (i) the exemption from the limitations on the issuance of notes provided for in Article 2412, paragraph 1 of the Civil Code; (ii) the issuance of commercial paper (cambiali finanziarie); (iii) the issuance of notes with a subordination clause and/or with a profit participation clause; and (iv) the tax regime applicable to notes and commercial paper issued by non-listed companies.

The new regime promotes the issuance of commercial paper and listed notes seeking to expand capital-raising alternatives, thus creating a competitive alternative to loan financing, in particular for non-listed companies.

The attached memorandum provides a general overview of the new regime introduced by the Law.