Finance
Italy Adopts Rules That Help Credit Fund Expansion
Published by Global Banking & Finance Review®
Posted on March 30, 2026
2 min readLast updated: March 30, 2026
Add as preferred source on GoogleQuick Summary
Italy has implemented EU‑mandated reforms under AIFMD II to streamline operations for alternative credit funds, replacing prior Bank of Italy approval with a simple notification process and allowing direct consumer lending—advancing non‑bank financing amid private credit market strains.
Italy Streamlines Credit Fund Rules to Boost EU Alternative Investment
Italy Aligns with EU Standards for Alternative Investment Funds
MILAN, March 30 (Reuters) - Italy has approved European Union‑mandated measures to create a more uniform framework for alternative investment funds, especially credit funds, whose importance has grown as a source of financing for companies outside the banking system.
Background: Global and EU Context
Italy's move to align its rulebook with EU standards comes amid mounting financial stability concerns over the $2 trillion global private credit market, which is showing signs of strain in the United States.
In the EU, however, policymakers are intensifying efforts to expand non‑bank financing for companies to help the real economy.
Key Features of the New Italian Rules
Simplified Notification Process for Fund Managers
The new Italian rules, which came into force on Saturday, make it easier for European alternative investment funds to operate in Italy, said Alberto Claretta Assandri, head of Italy funds and financial regulatory at law firm A&O Shearman.
"European managers of funds that have an authorisation from relevant authorities can simply notify the Bank of Italy about their decision to start their activity in Italy, while until now they had to undergo an approval process," he said.
EU Regulatory Reforms and Market Integration
The EU moved to reform the regulatory setup for alternative funds after a European Commission review found that rising cross‑border activity had exposed regulatory inconsistencies in areas such as liquidity management and supervisory reporting.
The EU review also highlighted how unclear delegation standards and uneven access to depositary services were hindering market integration and posing risks to investors.
Direct Lending to Consumers
Implementation and Next Steps
Claretta Assandri said the new Italian law also allowed European credit funds to lend directly to consumers.
"The EU directive provides for this possibility but gives member states the option to prohibit it. Italy has chosen not to do so. The measure will become fully operational once the Bank of Italy issues the necessary secondary rules so we'll need to see how the implementation proceeds," he said.
(Reporting by Valentina ZaEditing by Rod Nickel)
Key Takeaways
- •Italy aligned national rules with the EU’s AIFMD II, enabling EU alternative investment funds to begin activity in Italy upon notifying the Bank of Italy—no longer requiring prior authorization. (aosphere.com)
- •The new framework additionally lifts a domestic prohibition on direct consumer lending by European credit funds, although full implementation awaits Bank of Italy’s secondary regulations. (aosphere.com)
- •This move responds to financial‑stability concerns over the $2+ trillion global private credit sector, especially amid signs of strain in the U.S., while supporting EU policy to bolster non‑bank financing for company growth. (theguardian.com)
References
Frequently Asked Questions about Italy adopts rules that help credit fund expansion
1What changes has Italy made to its credit fund regulations?
Italy has adopted new rules to align with EU standards, making it easier for European credit funds to operate and lend directly to consumers.
2Why did Italy update its rules for alternative investment funds?
Italy updated its rules to create a uniform regulatory framework, address EU-mandated changes, and support non-bank financing for companies.
3How do the new Italian rules affect European fund managers?
European fund managers can now simply notify the Bank of Italy to start activities, instead of undergoing a lengthy approval process.
4Will European credit funds be able to lend to consumers in Italy?
Yes, under the new rules, European credit funds are allowed to lend directly to consumers once the Bank of Italy issues secondary regulations.
5What prompted the EU to reform the regulatory setup for alternative funds?
The EU acted after a review found regulatory inconsistencies and risks due to rising cross-border activity in the alternative investment sector.
