The Ministerial Decree n. 166 of 2 September 2014 (the Decree) by the Ministry of Finance was published on the Official Gazette website on November 13. The Decree adopts the criteria and investment limits applicable to pension funds as well as rules on conflicts of interest, implementing the relevant provisions of the Italian legal framework on pension funds.

The Decree is aimed at regulating the investment criteria, based on a qualitative approach to investments, applicable to pension funds, allowing for more flexibility. Most importantly, the Decree intends to provide a regulatory framework for conflicts of interest based on the guidelines established in MiFID 2004/39/CE.

The Decree applies to all pension funds operating in Italy, with certain specific exclusions on eligible assets applicable to individual insurance contracts integrating pensions (PIP) and pre-reform pension funds linked to traditional life insurance contracts, as well as to linked-policies and capital redemption operations. The rules of the Decree on eligible assets also apply to pension funds established in EU Member States operating cross-border in Italy.

Italian pension funds have 18 months to adopt adequate procedures, an organisational structure and techniques that are based on their dimension and complexity of the portfolio, the investment policy that they intend to pursue and the risks inherent in the management of the assets.