[Newsflash n. 37]

 

On 3 November 2017, Borsa Italiana published certain amendments to the Rules of AIM Italia market that will enter into force on 3 January 2018, in order to improve the efficiency of a market that is fast growing according to recent number of IPOs.

The amendments aim at increasing the overall level of market transparency both on the admission and post-admission phases, in light of the enlarged scope of application of financial regulations (including MiFID II and MAR) and the steep growth of the market volumes (the aggregate trading volume from January to September 2017 is €1,4bn, equal to a 375% increase vis-à-vis the same period of 2016) favoured by the introduction of the PIR tax benefit.

• Institutional offer

These changes aim at improving the price formation process in the placement stage. In particular, the new minimum free float requirement is considered to be satisfied when shares have been subscribed for by at least 5 institutional investors. As a result, subscription of shares by natural or legal persons (even where classified as professional clients under MiFID) will no longer be relevant for the purposes of forming the minimum free float.

• Research reports

For the purposes of better disclosures to investors, the specialists are required to produce twice a year in its own name an equity research report (in relation to issuers admitted to trading after 3 January 2018), in accordance with the best standards and released promptly in conjunction with approval of the half-year and year-end financial statements. The research shall be published on Borsa Italiana’s website. This provision shall not apply to special purpose acquisition companies, “SPACs”.

• Transparency of blockbuilding process

Issuers will be required to include in the pre-admission announcement the indicative price range within which the final price of the securities will fall or the final price, as soon as available.

• SPACs

Additional fit and proper requirements for promoters of SPACs have been introduced. In particular, promoters’ experience shall include managerial roles in the field of (i) transactions on the primary capital market; (ii) private equity transactions; (iii) management of mid-sized companies; (iv) investment banking sector.

Moreover, it is proposed to amend the minimum fund-raising requirement following the placement of the securities concerning SPACs, from the actual € 3 million to € 30 million. The minimum free float requirement has been removed.

• Regulatory fine-tuning

Following the adoption of CONSOB Guidelines on Management of inside information (see Newletter n. 9) some provisions of the AIM Italia Rules have been repealed in order to eliminate overlaps. In particular, the following provisions have been deleted:

1. the requirement to disclose to the market any information notified to the shareholders’ meeting that might trigger a significant price change,
2. the recommendation to consult Borsa Italiana in the event of the imminent conclusion of significant transactions or decisions concerning significant facts (to allow it to consider whether to intervene on the market),
3. the provision according to which any relevant change to the financial situation in respect to the profit forecasts, estimates or projections should be communicated without delay to the market,
4. the reference to the price-sensitive nature of the information on the appointment, dismissal or resignation of the holder of management powers.

On the other hand, other provisions have been maintained, such as the requirement to notify Borsa Italiana in advance by phone of any open market announcements (to enable Borsa Italiana to assess the impact of the announcement on trading) and the requirement for issuers to publish and maintain on their websites all the price sensitive communications, as well as all the information, published in the last five years.

Legália will monitor future developments and is available to provide you with any clarification or support in relation to the subject matter of this Newsflash.