The implementing decree on the Pir has finally arrived. After five months of waiting in which the market was literally paralyzed due to the lack of official regulations that made it clear who can invest in what, the Government put an end to the impasse and published the new rules on Individual Savings Plans in the Official Gazette.
PIR: THE ROAD TO THE DECREE
The text should have arrived in February, but it soon became clear that the deadline would never be met. Then there was talk of March, but still nothing. Nothing even in April, despite numerous reassurances and a ready decree parked at the Ministry of Economic Development.
May is the month of the turning point thanks to which – but there is a lot of skepticism among insiders – the Pir market could finally restart after months in which no one was able to offer customers subscription to new individual savings plans due to the innovations introduced with the Budget law which modified the functioning mechanism of these instruments, imposing new and stringent rules. A real pity, considering that in just two years, according to Assogestioni data, the 72 PIR Compliant funds on the market raised almost 15 billion euros (10,9 in 2017, 3,95 in 2018).
PIR: A BRIEF REVIEW
The PIRs, we recall, were created in 2016 by the Renzi government with the aim of conveying investors' money to Italian SMEs, allowing the latter to find resources through an alternative channel to the banking one. The entry into force took place in 2017. How do they work? They are long-term savings plans that provide for tax breaks – no capital gains taxes – for retail investors who decide to invest their money in Italian companies for at least 5 years. The legislation provides that at least 70% of the total value of the Pir it must be invested in financial instruments issued or entered into by companies resident in Italy or having stable business in our country.
PIR, THE NEW RULES: HERE'S WHAT'S CHANGING
The rules introduced by the Lega-M5S Government with the 2019 Budget Law oblige investors who decide to bet on the PIRs to allocate part of their money to Aim and Venture Capital. The legislation applies only to new funds, for those subscribed before 2019.
In detail, 70% of the overall value of the PIRs mentioned above must be invested, 5% in financial instruments issued by eligible SMEs and traded on multilateral trading systems and at least 5% in venture capital. SMEs must not be listed on a regulated market and must not have received financial resources for an amount exceeding 15 million. From the point of view of the structure, these are companies with up to 250 employees, with a maximum turnover of 50 million or, alternatively, a balance sheet below 43 million.
The new rules also allow investments in “equity” and “quasi-equity”, i.e. a type of financing halfway between equity and debt, with a higher risk than first-ranking debt (senior) and a lower risk than primary capital (common equity).
