Safeguarding in Italy: TUB art. 114-duodecies explained
Safeguarding in Italy rests on Article 114-duodecies of the Testo Unico Bancario for payment institutions and Article 114-quinquies.1 for e-money institutions, and both make client money a separate estate by law rather than by contract. Italy also narrows the choice the directives allow. The Banca d’Italia provisions for payment and e-money institutions list three places client funds can sit, and all three are forms of segregation: there is no insurance route. A firm that also runs a non-payment business must carve out a registered patrimonio destinato under Article 114-terdecies. This piece covers the statute, the supervisory rules, the hybrid case and three cases from practice.
1. The texts
Four layers carry the Italian rules:
- Article 114-duodecies TUB (Legislative Decree 385/1993), for payment institutions (istituti di pagamento, IP), transposing Article 10 of PSD2 (Directive (EU) 2015/2366).
- Article 114-quinquies.1 TUB, for e-money institutions (istituti di moneta elettronica, IMEL), transposing Article 7 of EMD2 (Directive 2009/110/EC).
- Article 114-terdecies TUB, on the patrimonio destinato of institutions with other businesses.
- The Banca d’Italia “Disposizioni di vigilanza per gli istituti di pagamento e gli istituti di moneta elettronica”: Chapter IV, Section II (safeguarding), Chapter VI (internal controls) and Chapter X (other activities).
The latest consolidated text runs to 2 November 2022. The measure of 3 February 2026 rewrote Chapter VI for DORA but left Chapter IV, Section II untouched.
2. Payment institutions: Article 114-duodecies
The article works in four steps.
- Recording (para. 1). A payment institution records each client’s money in payment accounts used only for providing payment services, under rules set by the Banca d’Italia.
- Scope (para. 1-bis). An institution providing services 1 to 6 of Article 1(2)(h-septies.1) TUB protects all funds received from payment service users. That includes funds held in payment accounts and funds received through another payment service provider to execute payment transactions.
- Separate estate (para. 2). The money is invested, as the Banca d’Italia provides, in assets that form an estate fully separate from the institution’s own. The institution’s creditors, and anyone acting in their interest, have no action against it. Nor do the creditors of any entity with which the funds are deposited. Creditors of an individual client can act only up to the amount recorded for that client. Where funds sit with a third party, legal and judicial set-off do not operate, and contractual set-off against the depositary’s claims on the institution cannot be agreed.
- Liquidation (para. 3). In compulsory administrative liquidation (liquidazione coatta amministrativa), payment account holders are treated like clients entitled to the return of financial instruments.
Two features go beyond the directive: protection runs against the depositary’s creditors too, and the set-off ban is statutory, whatever the bank’s standard terms say.
3. E-money institutions: Article 114-quinquies.1
The e-money article follows the same pattern. An IMEL records, for each client, the money received for e-money issued in its liabilities (poste del passivo). The funds are invested in assets forming a separate estate, beyond the reach of the institution’s creditors; holders’ own creditors act only up to the amount recorded; set-off is excluded; and in liquidation holders rank like clients entitled to the return of financial instruments.
Paragraph 4 sends payment services provided by an IMEL back to Article 114-duodecies. Paragraph 5 covers an IMEL that carries on other business activities: it sets up a single separate estate for e-money issuance, payment services and related activities, and Article 114-terdecies applies to it.
4. The Banca d’Italia rules: where the money can sit
Chapter IV, Section II of the provisions implements both articles. It does not apply to institutions that only provide account information or payment initiation services. Its core is paragraph 3: funds received for payment services 1 to 6, or for e-money issued, must be held in one of three ways:
- deposited at a bank authorised to operate in Italy, in accounts in the institution’s name that state they hold third-party assets (beni di terzi), kept separate from the institution’s own accounts;
- invested in qualified debt securities, held with authorised custodians;
- invested in units of harmonised investment funds whose rules allow investment only in qualified debt securities or in money market funds.
Chapter I defines “qualified debt securities” as debt securities in the Article 336(1) CRR table (Regulation (EU) No 575/2013) weighted at 1.6% or less, excluding Article 336(4) “other qualifying items” — the EMD2 test in the EU comparison, applied to payment institutions too.
Whichever option is used, the deposits and assets form a separate estate. The provisions add that if the institution or the depositary bank is put into resolution, Article 49(1)(c) of Legislative Decree 180/2015 applies. That provision excludes from bail-in client funds that are protected in insolvency proceedings.
5. Timing, records and reconciliation
The timing rules follow the directives:
- Payment institutions. Paragraph 3 applies to funds, including those in payment accounts and those received through another provider, that have not been delivered to the payee or transferred to another provider by the first business day after the day of receipt.
- E-money institutions. Funds received through a payment instrument in exchange for e-money are covered from the day the institution has them available, and in any case within five days of issuing the e-money. The Banca d’Italia text says “five days” where Article 7(1) EMD2 says five business days; working to the shorter reading costs little.
Paragraph 2 requires separate records of each client’s funds and of the assets they are invested in, naming the depositaries and the people who can operate the accounts. The records are updated continuously, so each client’s position can be rebuilt at any moment, and regularly reconciled with the depositaries’ statements. An IMEL keeps e-money and payment-service records apart.
Chapter VI adds that institutions manage investment risk so the money is readily available, and set procedures to meet the deposit deadlines and correct any gap between assets and funds received. Unlike Luxembourg, Italy sets no fixed reconciliation frequency; the firm has to justify its own.
6. Mixed-purpose funds: the representative percentage
Under paragraph 4 of Section II, where funds serve both payment transactions and other services, only the share for future payment transactions is safeguarded. If that share varies or is unknown, the institution estimates a representative percentage from historical data and checks it periodically against actual use.
Italy turns the directive’s “to the satisfaction of the competent authorities” into three reports to the Banca d’Italia: that the institution is applying the rules only to a percentage, and why; how the percentage was set; and, at least once a year, the results of the checks on whether it still fits. The same paragraph applies to IMELs whose e-money funds can also be used for unrelated payment transactions or other services.
7. The hybrid institution: Article 114-terdecies
An institution that also carries on a business other than payments or e-money must set up a patrimonio destinato: a dedicated estate inside the company, separate from both its own assets and any other dedicated estate.
Setting it up. The board passes a resolution describing the assets and legal relationships allocated and how they may be used, added to or replaced. The resolution is filed and registered with the companies register under Article 2436 of the Civil Code, and the creditor-opposition rule of Article 2447-quater applies. Once the opposition period expires, or the court orders registration despite an objection, the assets are reserved for payment service users and holders of rights from related activities. Until those beneficiaries are paid in full, no other creditor can act against the estate. Paragraph 2 of Article 114-duodecies applies as well.
Authorisation. Under Chapter X, the unfiled resolution goes with the application; after authorisation the firm sends the certificate of registration, and the Banca d’Italia enters it in the register once the opposition period has expired. An existing institution adding another business may file its resolutions only if the Banca d’Italia raises no objection within sixty days.
Running it. Initial capital and own funds are measured on the dedicated estate, and the statutory auditor certifies its net assets cover the minimum initial capital. One or more responsible persons must meet the fitness requirements for directors; changes are notified within ten days. The estate has separate books and a separate statement attached to the annual accounts. If it falls short, the institution answers with its own assets. The Banca d’Italia can also require a separate company.
Insolvency. The estate is liquidated separately. Orders in progress continue but no new ones are accepted, and the Banca d’Italia may appoint its own liquidator.
8. Italy, Spain and Luxembourg side by side
| Point | Italy | Spain | Luxembourg |
|---|---|---|---|
| Statute | Arts. 114-duodecies (IP) and 114-quinquies.1 (IMEL) TUB | Art. 21 RDL 19/2018 (EP); art. 9 Ley 21/2011 (EDE) | Arts. 14 and 24-10 LPS |
| Insurance or guarantee | Not among the methods in the Banca d’Italia provisions | EP chooses; EDE needs Banco de España authorisation | Available to both, with legal review of every clause |
| Deposits | Bank authorised in Italy, account marked as third-party assets | EU credit institution, account titled as customer balances | Credit institution or, at its discretion, a central bank |
| Investments | CRR art. 336 debt at 1.6% or less; harmonised funds holding only such debt or money market funds | Zero-risk-weight assets under CRR art. 114 | Public-sector and supranational debt; UCITS holding only such debt |
| Insolvency | Separate estate; no action by creditors of the institution or of the depositary; set-off excluded by statute | Absolute right of separation for users | Outside the estate; pledges void |
| E-money timing | Once available, and within five days of issuance | Once credited, and within five business days | Once credited, and within five business days |
| Other business | Patrimonio destinato, registered with the companies register, plus representative percentage for mixed funds | Representative fraction for mixed funds | Representative fraction for mixed funds |
9. Worked case: a group insurance policy
Facts: a payment group insures its home-state book with a non-group insurer and wants the same cover for a new Italian institution.
What the rule says: Chapter IV, Section II lists three ways to hold funds, all of them segregation. Insurance is not on the list.
What the practitioner does: designs the Italian entity around segregation from the start, opens accounts marked as third-party assets and budgets for the liquidity they tie up.
Outcome: the authorisation file shows a method the Banca d’Italia’s provisions actually allow, rather than one the directive allows.
10. Worked case: a bank that wants set-off
Facts: the bank holding an IMEL’s safeguarding account sends standard terms with a general set-off clause covering all accounts in the institution’s name.
What the rule says: Article 114-quinquies.1(2) excludes legal and judicial set-off where funds sit with a third party and bars agreeing contractual set-off. The account must also state that it holds third-party assets.
What the practitioner does: gets the clause carved out in writing, has the account title amended to show the third-party nature, and files both documents.
Outcome: the contract matches the statute, and nobody nets the balance by mistake.
11. Worked case: a retailer adds a payment licence
Facts: a retail company applies for a payment institution licence to run payment accounts for its customers, while keeping its retail business in the same company.
What the rule says: Article 114-terdecies requires a patrimonio destinato, set up by board resolution and registered with the companies register. Chapter X measures capital and own funds on the dedicated estate and requires one or more responsible persons who meet the fitness requirements for directors.
What the practitioner does: drafts the resolution, attaches it to the application unfiled, appoints the responsible person, sets up separate books, and plans around the creditor-opposition period. Client funds inside the estate still follow Chapter IV, Section II.
Outcome: two layers of protection — client funds segregated, and the payment business ring-fenced from the retail creditors.
FAQ
Which article governs safeguarding for Italian payment institutions?
Article 114-duodecies of the Testo Unico Bancario, implemented by Chapter IV, Section II of the Banca d’Italia provisions for payment and e-money institutions.
And for e-money institutions?
Article 114-quinquies.1 TUB, with the same Banca d’Italia section. Payment services an IMEL provides fall under Article 114-duodecies.
Can an Italian institution safeguard with insurance?
The Banca d’Italia provisions list three options, and all three are segregation.
Are safeguarded funds exposed if the depositary bank fails?
No. The statute bars actions by the depositary’s creditors, and in resolution Article 49(1)(c) of Legislative Decree 180/2015 keeps protected client funds out of bail-in.
What is a patrimonio destinato?
A dedicated estate that an institution carrying on other business must set up under Article 114-terdecies TUB, registered with the companies register and reserved for payment service users.
What must we tell the Banca d’Italia about a representative percentage?
That you use one and why, how it was set, and at least once a year the results of your checks on whether it still fits.
12. What to do, today
- Treasury: check every safeguarding account is at a bank authorised in Italy and titled as holding third-party assets.
- Legal: review each depositary contract for set-off, lien or pledge clauses and get them carved out in writing.
- Finance: confirm the client-level records can rebuild each client’s position at any moment, and write down why your reconciliation frequency is enough.
- Investments: test every security and fund against the CRR Article 336 1.6% threshold and the “only qualified debt or money market funds” rule.
- Hybrid firms: keep the patrimonio destinato resolution, responsible person and separate statement current, and send the annual percentage report.
Related: Safeguarding compared across the EU · Safeguarding in Spain · Safeguarding in Luxembourg
