The potential impact of this development is very significant, as this security can be coupled with the traditional forms of Italian law collateral. It does afford new options in the management of the charged assets, which can be leased out, sold, exchanged or supplemented during the life of the security. All this flexibility is generally welcome, although there are implications and concerns to be taken into account for due diligence and credit analysis processes. The new security is also designed to allow enforcement without much involvement of the judicial system, to allow a recovery of the secured claims without the delays and costs ensuing from the involvement of a court.
As its availability for use is drawing near, we have considered the rules governing such new form of security and the operation of the registry, as well as the main practical implications for Italian business and their lenders, suppliers and clients.
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Authored by Carlo Massini, Marco Gasparrini, and Laura Leonelli.