Commentary on Judgment No. 18454 of 2024: Implications of Credit Securitization

The recent order No. 18454 of July 5, 2024, issued by the Court of Cassation, has raised important issues concerning the regulation of credit securitization, a topic of growing relevance in the Italian and European legal landscape. In particular, the Court ruled on the possibility for the assigned debtor to file counterclaims against the securitization company, clarifying fundamental aspects of Law No. 130 of 1999.

The Regulatory Framework for Securitization

Law No. 130 of 1999 introduced the possibility of securitizing credits in Italy, establishing a specific legal regime for securitization operations. Under this regulation, the assigned credits become part of a separate asset pool, managed by a special purpose vehicle (SPV), which is tasked with financing the purchase of credits and satisfying the rights of investors. This asset separation is crucial for ensuring investor protection and financial system stability.

The Ruling's Principle

Credits subject to securitization operations pursuant to Law No. 130 of 1999 – Separate Asset Pool – Counterclaims by the Assigned Debtor – Against the Assignee – Exclusion – Case Law. Credits subject to securitization operations – carried out in accordance with Law No. 130 of 1999, interpreted in conformity with EU Regulation No. 2402 of 2017 – constitute a separate asset pool from that of the securitization company (so-called SPV), exclusively intended for the satisfaction of rights incorporated in the securities issued to finance the purchase of credits and for the payment of operation costs. Therefore, the assigned debtor is not permitted to file counterclaims against the assignee securitization company for claims held against the assignor arising from the relationship with the latter. (In application of this principle, the Supreme Court quashed the lower court's decision that had jointly ordered the so-called SPV to reimburse the clients of the assigning bank – the so-called originator – for unduly paid interest arising from the closure of a current account contract).

This principle clearly establishes that the SPV's separate asset pool has an exclusive function: to ensure the payment of rights of the holders of the issued securities. Consequently, the assigned debtor cannot use this asset pool to assert personal claims against the securitization company. This exclusion is fundamental to preserving the integrity of the securitization mechanism and providing security to investors.

Practical Implications of the Judgment

• Clarity on the protection of investor rights.
• Inability for the assigned debtor to raise prior claims.
• Strengthening of securitization regulations in line with European directives.

This judgment is part of a line of case law aimed at consolidating the regulation of securitization, aligning Italian law with European law, particularly EU Regulation No. 2402 of 2017. The Court of Cassation, with this ruling, not only reaffirms asset separation but also provides important clarification on the protection of investor rights, contributing to greater financial system stability.

Conclusions

In conclusion, order No. 18454 of 2024 represents a significant step in the regulation of credit securitization. It clarifies the impossibility for the assigned debtor to raise counterclaims against the securitization company, thereby protecting investor rights and ensuring greater investment security. The implications of this judgment are set to influence not only legal practices but also how market operators perceive and manage securitized credits.