NPL Directive decree approved
on credit servicers and credit purchasers
The Italian government approved a legislative decree to transpose Directive (EU) 2021/2167, also known as the Secondary Market Directive (SMD). This legislation concerns managers and buyers of impaired loans and amends the previous Directives 2008/48/EC and 2014/17/EU.
The Directive (EU) 2021/2167 was introduced with the aim of:
Development of Secondary Markets: To promote the growth of secondary markets for impaired loans. These markets are crucial for buying and selling already outstanding securities and for improving the management of non-performing loans.
Strengthening Debtor Safeguards: Ensure greater protections for assigned debtors by ensuring that their rights are safeguarded during the assignment of receivables.
Main Provisions of the Directive The Directive introduces several key measures:
Liberalisation of the Assignment of Impaired Loans: Credit institutions can now freely assign impaired loans to "credit buyers", which can be either natural or legal persons operating professionally.
Increased Supervision of the Credit Market: New authorisation and supervisory requirements are envisaged for 'credit managers'. This includes a detailed regulation of the relationships between buyers, managers and providers of credit management services.
Protection of Debtors: The directive establishes specific disclosure requirements and rules of conduct to protect assigned debtors. In addition, a new supervisory register and a system for handling complaints are established.
Transitional Period The legislation provides for a transitional period for entities already active in the sector until 31 December 2023. These entities will be able to continue their activities until they obtain the necessary authorisation, but no later than 29 June 2024.
The approval of this legislative decree represents a significant step towards the harmonisation of the impaired loans market in Europe. Directive (EU) 2021/2167 aims to create a more efficient and transparent market, with more guarantees for debtors and clear rules for operators in the sector. This legislative change will help to strengthen confidence in the European financial system and facilitate the management of non-performing loans.
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Relevant Links:
https://www.governo.it/it/articolo/comunicato-stampa-del-consiglio-dei-ministri-n-85/25975
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