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In its judgment No. 5911 of 12 March 2018, the Court of Cassation analysed a contract for the purchase and sale of works of art, qualifying its nature as a financial investment, with its consequent subjection to the regulation of the Consolidated Law on Financial Intermediation (TUIF).

The case analysed by the Court involved the purchase by the collector of works of art at a 5% to 7% discount compared to the price indicated in the price list, with the option to exercise the right of withdrawal within an agreed term.

At the expiration of the term, if the right of withdrawal had been exercised, the collector would have had to return the work of art to the seller, receiving, instead of the amount paid, the full list price.

In essence, the collector would obtain the enjoyment of the purchased work for a certain period of time, after which he could choose between the following options:

  • consolidate permanently the purchase already made at a price below the list price;

  • return the work of art to the seller, receiving a profit equal to the discount made at the time of purchase (not counting the utility received as a consequence of the free enjoyment of the work for the intervening period of time).

The Supreme Court, referring to previous case law on the subject, qualifies as an investment of a financial nature any contribution of sums of money with an expectation of profit or remuneration, within a certain period of time, against a risk.

In the case at issue, the sale and purchase transaction with right of withdrawal, viewed as a whole, was held to be of a financial nature, the guarantee for the purchaser of a final return of 5% or 7% being pre-eminent, and the purpose of enjoyment of the work of art purchased and the absence of an obligation to return it at the agreed maturity being secondary and accessory.

Moreover, it was considered sufficient to configure the element of risk, inherent in any financial transaction, the circumstance that there was no certainty as to the seller's ability to return, at maturity, the agreed amount, including the remuneration.

In conclusion, similar operations could be of interest to operators in the art market who would like to increase the company's liquidity with a short or medium-term operation, without resorting to the credit market, but simply investing on existing resources; however, we must warn against adopting similar contractual mechanisms without careful professional assistance, as they could easily incur in violation of the TUIF regulations, with possible criminal implications and the application of administrative sanctions of a certain importance.

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