It has now been four months since Legislative Decree No. 208 of 31 December 2025 (the “Decree“) was published in the Official Gazette, and a number of questions on material aspects remain unanswered.

By way of background, the Decree took effect the day after its publication – that is, 9 January 2026. It represents the (semi) final step towards Italy’s implementation of the CRD6 (Directive 2024/1619) and the CRR3 (Regulation 2024/1623) (the “Reform”). We say “semi” final because, for the Reform to be fully operational, the Decree provides that certain secondary measures need to be adopted by the Bank of Italy – for example to specify the distinctive criteria of the two classes of third country branches).

In any case, the Decree introduces several changes to Legislative Decree No. 385 of 1 September 1993 (the “Consolidated Banking Act”) and to Legislative Decree No. 58 of 24 February 1998 (the “Consolidated Financial Act”) as well as to the legislation governing the administrative functions of the supervisory authorities (Consob and the Bank of Italy).Under the Consolidated Banking Act, the Reform’s regime for third country banks is based on few key pillars. The most significant one relates to the perimeter of core banking services.

The mechanism provides that third country banks willing to pursue core banking services in Italy are subject to an establishment requirement (i.e. they need to set up a branch). The ‘core banking services’ captured by the Decree mirror those set out under points 1, 2 and 6 of Annex I to the CRD6 (i.e. taking deposits and other repayable funds, lending and guarantees and commitments).

One practical point worth flagging concerns savings’ collection business. The issuance of bonds by a third country bank would be treated as savings’ collection and would trigger the establishment requirement. The exemption regarding the collection of repayable funds from entities subject to prudential supervision operating in the banking, financial, securities, insurance, and pension sectors is only available to companies other than banks (i.e. companies whose main business does not correspond to savings’ collection and lending).

Another material element of the Reform relates to exemptions from the establishment requirement. The Decree provides that the establishment requirement does not apply where a retail client, qualified counterparty, or professional client approaches the third-country bank at their own exclusive initiative. However, this mechanism cannot realistically serve as a long-term business strategy — it is better understood as an option for one-off transactions. Crucially, even where the client’s initiative is genuine, any promotion or marketing activity would undermine the unsolicited nature of the request and disqualify reliance on this exemption.

Third country banks are also exempt from the establishment requirement for services provided to EU credit institutions and intra-group entities. That said, despite the absence of an authorisation process, the Bank of Italy must be notified in advance and retains the power to block the business initiative. It is understood that such power is not discretionary, and additional measures are expected from the Bank of Italy to specify the requirements for relying on this exemption).

A further exemption applies where a third-country bank provides MiFID services exclusively to professional clients (by operation of law, excluding those classified as professional upon request) and eligible counterparties. In such cases, the bank may operate on a cross-border basis for MiFID services and, by extension, for ancillary banking services such as custody and lending. We would expect some degree of coordination between the relevant authorities to give full effect to this exemption.

The establishment requirement will apply as of 11 January 2027. The transitional arrangements work as follows:

  • Third country banks that submit an authorisation application to the Bank of Italy for the establishment of a branch by 11 January 2027 may continue to provide services until the Bank of Italy reaches a final decision (which must be made within 6 months from the presentation of a complete application).
  • Third country banks that do not intend to make an authorisation application for a branch may continue to manage existing contracts entered into before 11 July 2026 — which effectively serves as the cut-off date for new business — provided there is no novation or material change to the agreed terms. In all cases, the business must be either transferred or ceased by 10 January 2028.

Finally, none of the above prevents a client from continuing the relationship at their own exclusive initiative. This is, in essence, the application of the reverse solicitation mechanism within the transitional regime.