[Newsletter n. 7]

 

On 6 April 2017 CONSOB published the required amendments to CONSOB Regulations on issuers (11971/1999), markets (16191/2007) and related party transactions (17221/2010) implementing the Market Abuse Regulation (EU Regulation No. 596/2014, “MAR”) and its related delegated acts.

The amendments have been issued following an intense work of the Regulator which elaborated the 21 responses to the public consultation terminated on 25 November 2016 (see our Newsflash n. 16), with a view to achieving a higher degree of harmonization and coordination between the Italian and European legislation.

Given MAR’s self-executing nature, the amendments essentially consist of (a) the repeal of national rules clashing with the new regime and (b) the continuation of existing provisions of national law where allowed by the EU legislator to the competent authorities of each Member State. Among the several changes, the following can be summarised as the main areas of interest:

  • Subsidiaries. The national provision (Art. 114(2) of the Italian Financial Act) requiring the issuer to put in place appropriate measures for its subsidiaries to notify the parent company of material information in order to comply with the latter’s obligation of notification under MAR, remains applicable. In CONSOB’s view, such requirement, even if not expressly contemplated by the EU legislator, is in line and instrumental to the correct compliance with MAR by the issuer. However, CONSOB confirmed that the subsidiary is not under the obligation to draw up an insider list.
  • Selective Disclosure. The prohibition of selective disclosure of estimates and provisional data as well as of any deviation from previous estimates has been repealed on the basis that MAR regime already contemplates this rule in general terms: such information will be covered by MAR if and to the extent that they are deemed as inside information.
  • Issuers of financial instruments held to a considerable extent by the public (Emittenti di strumenti finanziari diffusi). The existing national regime regarding disclosure obligation of this kind of issuers remains applicable, in the absence of an express amendment of the scope of application set forth in the Italian Financial Act.
  • Managers’ transactions.
    • The threshold (total amount of transactions in one calendar year) triggering the notification obligation of transactions carried out by managers, or as well as persons closely associated with them, on securities of the issuer has been raised to EUR 20,000 from the previous EUR 5,000. The determination to increase the threshold is aimed at mitigating the administrative costs, in particular for smaller listed issuers;
    • The above notification obligation applies also to shareholders holding 10% or more of the issuer’s share capital. The Italian Regulator has followed the provision set forth in Art. 19(2) of MAR, which set out the right of competent authorities of Member States to provide for notification obligations other than those referred to in such article.
    • The above notification requirement does not apply to transactions carried out by asset managers within the management of collective investment firms in consideration of the fact that the investors do not have any power to transfer the assets.
    • The closed period of 30 days before the announcement of an interim financial report or a year-end report (during which managers cannot trade on the issuer’s securities, including derivatives linked to such securities) is not applicable with reference to the publication of quarterly accounts, on the ground that they are published on a voluntary basis.
    • The above closed period is not applicable when the manager acts on behalf of the issuer. According to CONSOB in such circumstance the manager is not acting on its own account or for the account of a third party, as required by Art. 19 (11) in order for the restriction to apply.

In addition to the above amendments, in response to the several requests for clarification submitted during the Consultation and at the Open Hearing of 14 November 2016, CONSOB has now launched a new public consultation on two Handbooks (“Guide Operative”):

The draft Handbook on inside information concerns, inter alia:

  • Adequate management of inside information through the adoption of specific internal processes and organisational measures. CONSOB encourages the set up of a dedicated function to this purpose named Funzione Gestione delle Informazioni Privilegiate (“FGIP”).
  • Insider list. In particular, CONSOB clarifies that:
    1. the interpretation that the Insider List shall be drawn up only with reference to information that will be published with delay is not applicable.
    2. persons acting in the name of and on behalf of the issuer are not obliged to draft an Insider List. Clearly, the issuer shall include such persons in the Insider List, as natural persons who have access to inside information, also when they work for an entity acting in the name of and on behalf of the issuer (such as advisory firms).
    3. issuers of financial instruments traded on MTF may fulfil the obligation of communication of the information to the media also by sending certified emails (“PEC”) to an adequate number of media (for instance, 5), if they do not have access to a SDIR (system of dissemination of regulated information).
    4. issuers of bonds only (in particular mini-bonds), in light of the specific nature of inside information concerning them, shall use extra care when they liaise with banks or private-equity funds in the absence of confidentiality arrangements. CONSOB intends to continue the educational activity in respect of mini-bond’s issuers with specific training initiatives.

The second Handbook on investment recommendations deals with (i) the fair presentation of investment recommendations, (ii) the disclosure of material interests and conflicts of interest, (iii) the description of the circumstances under which CONSOB may request their publication.

Responses to the above Consultation can be submitted not later than 6 June 2017.

Should you wish to submit your response to the consultation we would be happy to offer you the required assistance.

Please do not hesitate to contact us for any further clarification on the above matters.

 

Contacts:

Vito Vittore
Senior Partner

Massimiliano Silvetti
Senior Partner

Elena Pagnoni
Of counsel

Luigi Bonifacio
Associate

Chiara Calzecchi Onesti
Associate