Under Article 22 of Legislative Decree No. 58 of February 24 1998, securities and cash belonging to third parties and held for whatever purpose by investment firms or by financial intermediaries and banks, constitute an autonomous patrimony separate from that of the intermediary and from those of other clients. No attachment by or on behalf of creditors of the intermediary, as well as by or on behalf of creditors of a possible depository or sub-depository, can be levied on the patrimony.
Article 22 of Decree No. 58 has recently been implemented through specific regulations issued by the Bank of Italy on July 1 1998, on terms and conditions of deposit and sub-deposit of securities and cash pertaining to third parties.
Cash delivered by third parties to the financial intermediary for the execution of transactions must be deposited by the financial intermediary with a bank the day after receiving the cash. The cash account must be registered in the name of the financial intermediary with the express indication that the cash deposited belongs to third parties. The cash account must be separate from the financial intermediary's own cash account.
As for securities belonging to third parties, financial intermediaries, whose Articles of Association provide for the possibility of keeping a third parties' securities deposited with their offices, must keep the securities in specific securities accounts registered in the name of each client.
Should the Articles of Association of the financial intermediary not allow it to keep third parties' securities at its office, then the securities will be deposited by the client with a bank in a securities account registered in its name, the account being destined exclusively for the execution of transactions related to the exercise of investment services by the financial intermediary in the interest of the relevant client.
The effect of these provisions to the extent that the deposit agreement contains express reference to the identification number of the deposited securities is that should the financial intermediary become subject to any bankruptcy proceedings in Italy, the client would be able to claim the return of its securities in specie because they have been segregated from other securities belonging to the financial intermediary or other clients of financial intermediaries.