Golden Power 2026: Navigating the Latest Italian FDI Screening Developments

In this piece for Ropes & Gray, authors Niccolo Vernillo, Jacopo Figus Diaz & Lorenzo Russo discuss Italy’s recent reform of its foreign investment screening framework through Law No. 4/2026, which significantly reshapes the country’s “Golden Power” regime for transactions involving banks, insurers, and other financial institutions. The reform was introduced in response to concerns raised by the European Commission following the failed UniCredit–Banco BPM merger and seeks to align Italian procedures more closely with EU regulatory requirements.

A key change is the introduction of a sequencing rule that requires Italian authorities to wait for decisions from the European Commission and the European Central Bank before imposing conditions or blocking transactions in regulated financial sectors. While intended to reduce conflicts between national and EU-level reviews, the reform may lengthen transaction timelines and create new considerations for deal structuring, conditionality, and regulatory planning.

The legislation also expands the scope of government intervention by formally recognizing “national economic and financial security” as an essential national interest. Although Italian authorities characterize this as a clarification of existing practice, the authors note that the broader concept may face scrutiny under EU law, which traditionally limits restrictions on investment and establishment to genuine public security concerns.

Beyond the legislative reforms, the article highlights important developments affecting market participants, including a court ruling that narrows notification requirements for share pledges and the emergence of structural remedies in Golden Power cases. The authors conclude that while Law No. 4/2026 addresses immediate EU concerns, it leaves significant governmental discretion intact and signals that foreign investment reviews in Italy will remain a complex and evolving area for cross-border investors, lenders, and transaction advisers.