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Italy

Article 22 of Legislative Decree No. 58 (through which a unified text of rules on the financial markets has been approved) sets out basic principles on the segregation of patrimonies of financial intermediaries and clients.

Investment and accessory services

Money and financial instruments of clients held for any purpose by investment firms, SGRs (Società di Gestione del Risparmio), financial intermediaries and banks constitute an autonomous patrimony totally separate from that of the intermediary and those of other clients. No attachment by or on behalf of creditors of the intermediary or by or on behalf of creditors of a possible depository or sub-depository can be levied on this patrimony. Attachments by creditors of the client are permitted only within the limits of its patrimony.

Accounts relating to money and financial instruments with third parties

Legal and judicial set-off does not apply and contractual set-off is not permitted in respect of claims of the depository or sub-depository towards the financial intermediary (depositor) or the depository.

Unless written consent is given by the client, investment firms or SGRs, financial intermediaries and banks cannot use in their interest or in the interest of third parties financial instruments and/or sums of their clients in their possession for any reason.

The Article was implemented according to specific regulations by the Bank of Italy and published in the official gazette of July 11 1998 on terms and conditions of deposit and sub-deposit of financial instruments and money pertaining to clients.

In general, under the regulations, money and financial instruments of clients held for any purpose by financial intermediaries must be evidenced in separate account records on each client and each different kind of service, with mention of the relevant depository. If the financial intermediary has been specifically authorized in writing to do so, financial instruments can be sub-deposited with other financial intermediaries, but must be held in special accounts (dedicated to clients' instruments) in the name of the depositing intermediary which must be separate from those for instruments held by the depositing intermediary itself.

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