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Third Party Bank Mandate: What an Authorized Representative Can Do and the Associated Risks
In Italy, most banks allow the holder of a current account or a securities portfolio to appoint an authorized representative (also referred to as a delegate or agent) who may carry out transactions on the account holder’s behalf and in their best interest. It is important to note that the delegate never becomes the legal owner of the funds. So how—and why—might it be useful to have someone authorized on your account?
What an Authorized Representative Can Do
It is appropriate to make some distinctions:
The delegate may perform a range of operations on the account’s available funds, including:
1. Making deposits
2. Giving instructions and making partial or full withdrawals, including use of any credit facilities granted by the bank
3. Requesting and collecting checkbooks and deposit slips
4. Authorizing third parties to submit deposit slips or collect cashier’s checks
5. Requesting a debit/ATM card
They may also manage securities held in the account, such as:
1. Depositing or withdrawing securities and providing the required receipts
2. Giving instructions for the administration of deposited securities, including the exercise of subscription rights
3. Buying or selling securities on behalf of the account holder, including shares and related rights
4. Transferring securities
5. Pledging securities as collateral
6. Signing related documentation
7. Granting further sub-delegation where permitted
What Are the Limitations on the Delegate?
A delegate cannot perform extraordinary actions such as closing the account or entering into specific contracts with the bank, and certainly cannot replace the account holder as the legal owner.
The Third Party Bank Mandate can also include explicit limits—such as a maximum daily cash withdrawal, restrictions on issuing checks, or caps on wire transfers.
How to Set Up a Third Party Bank Mandate
Each bank provides its own form, but the process is broadly similar: the account holder and the delegate appear at the branch with valid identification and tax code. For joint accounts, all co-holders must sign the request to authorize a delegate.
How to Revoke the Authorization
The authorization can be revoked or amended at any time by notifying the bank; for joint accounts, a single account holder’s request is sufficient. The authorization automatically ends upon the death of the account holder or any of the joint holders.
Because this arrangement gives significant access to your finances, trust is the essential prerequisite. The benefits are clear: if you are unable to visit the bank in person, a trusted representative can still handle routine transactions. However, a delegate usually cannot make investment or disinvestment decisions for products such as mutual funds, managed portfolios, or insurance policies. For those needs, as explained in our article on online banking, remote management options are available.
Need more detailed guidance or have specific questions about choosing the right form of power of attorney? Contact me for further information.
Third Party Bank Mandate: What an Authorized Representative Can Do and the Associated Risks
In Italy, most banks allow the holder of a current account or a securities portfolio to appoint an authorized representative (also referred to as a delegate or agent) who may carry out transactions on the account holder’s behalf and in their best interest. It is important to note that the delegate never becomes the legal owner of the funds. So how—and why—might it be useful to have someone authorized on your account?
What an Authorized Representative Can Do
It is appropriate to make some distinctions:
The delegate may perform a range of operations on the account’s available funds, including:
1. Making deposits
2. Giving instructions and making partial or full withdrawals, including use of any credit facilities granted by the bank
3. Requesting and collecting checkbooks and deposit slips
4. Authorizing third parties to submit deposit slips or collect cashier’s checks
5. Requesting a debit/ATM card
They may also manage securities held in the account, such as:
1. Depositing or withdrawing securities and providing the required receipts
2. Giving instructions for the administration of deposited securities, including the exercise of subscription rights
3. Buying or selling securities on behalf of the account holder, including shares and related rights
4. Transferring securities
5. Pledging securities as collateral
6. Signing related documentation
7. Granting further sub-delegation where permitted
What Are the Limitations on the Delegate?
A delegate cannot perform extraordinary actions such as closing the account or entering into specific contracts with the bank, and certainly cannot replace the account holder as the legal owner.
The Third Party Bank Mandate can also include explicit limits—such as a maximum daily cash withdrawal, restrictions on issuing checks, or caps on wire transfers.
How to Set Up a Third Party Bank Mandate
Each bank provides its own form, but the process is broadly similar: the account holder and the delegate appear at the branch with valid identification and tax code. For joint accounts, all co-holders must sign the request to authorize a delegate.
How to Revoke the Authorization
The authorization can be revoked or amended at any time by notifying the bank; for joint accounts, a single account holder’s request is sufficient. The authorization automatically ends upon the death of the account holder or any of the joint holders.
Because this arrangement gives significant access to your finances, trust is the essential prerequisite. The benefits are clear: if you are unable to visit the bank in person, a trusted representative can still handle routine transactions. However, a delegate usually cannot make investment or disinvestment decisions for products such as mutual funds, managed portfolios, or insurance policies. For those needs, as explained in our article on online banking, remote management options are available.
