Updated text including amendments made by Italian Law Decree no. 78 of 31 May 2010. The amendments are highlighted in bold.
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LEGISLATIVE DECREE No. 58 OF 24 FEBRUARY 1998 Consolidated Law on Finance pursuant to Articles 8 and 21 of Law no. 52 of 6 February 19961
INDEX
PART I - COMMON PROVISIONS
Article 1 - Definitions
Article 2 - Relationship to Community law
Article 3 - Administrative measures
Article 4 - Cooperation between authorities and professional secrecy
PART II - REGULATION OF INTERMEDIARIES
TITLE I - GENERAL PROVISIONS
Chapter I - Supervision
Article 5 - Purpose and scope
Article 6 - Regulatory powers
Article 7 - Supervisory powers
Article 8 - Reporting requirements
Article 9 - Statutory audit
Article 10 - Inspections
Article 11 - Composition of groups
Article 12 - Supervision of groups
Chapter II - Corporate officers and shareholders
Article 13 - Experience, integrity and independence requirements for corporate officers
Article 14 - Integrity requirements
Article 15 - Investments
Article 16 - Suspension of voting rights, obligation to dispose of shareholdings
Article 17 - Requests for information on shareholdings
TITLE II - INVESTMENT SERVICES
Chapter I - Persons and authorization
Article 18 - Persons
Article 18-bis - Financial advisors
Article 18-ter - Financial consulting companies
Article 19 - Authorization
Article 20 - Register
Chapter II - Performance of services
Article 21 - General criteria
Article 22 - Separation of assets
Article 23 - Contracts
Article 24 - Management of investment portfolios
Article 25 - Trading on regulated markets
Article 25-bis - Financial products issued by banks and insurance companies
Chapter III - Cross-border operations
Article 26 - Branches of Italian investment companies and freedom to provide services
Article 27 - EU Investment companies
Article 28 - Non-EU investment companies
Article 29 - Banks
Chapter IV - Door-to-door selling
Article 30 - Door-to-door selling
Article 31 - Financial salesmen
Article 32 - Distance marketing of investment services and activities and financial instruments
Chapter IV-bis - Protection of investors
Article 32-bis - Protection of investors’ collective undertakings
Article 32-ter - Out-of-court settlement of disputes
TITLE III - COLLECTIVE PORTFOLIO MANAGEMENT
Chapter I - Authorized intermediaries
Article 33 - Eligible activities
Chapter II - Investment funds
Article 34 - Authorization of Italian management companies
Article 35 - Register
Article 36 - Investment funds
Article 37 - Structure of investment funds
Article 38 - Depositary bank
Article 39 - Fund rules
Article 40 - Rules of conduct and voting rights
Chapter II-bis- Operations abroad
Article 41 - Italian asset management companies' operations abroad
Article 41-bis - Harmonized asset management companies
Article 42 - The marketing in Italy of the units of harmonized and non-harmonized investment funds
Chapter III - SICAVs
Article 43 - Establishment and eligible activities
Article 43-bis - SICAVs that appoint an Italian or a harmonized asset management company
Article 44 - Register
Article 45 - Capital and shares
Article 46 - Shareholders' meetings
Article 47 - Amendments to the Articles of Association
Article 48 - Dissolution and voluntary liquidation
Article 49 - Mergers and divisions
Article 50 - Other applicable provisions
TITLE IV - INJUNCTIVE REMEDIES AND CRISES
Chapter I - Injunctive remedies
Article 51 - Injunctive remedies vis-a-vis Italian and non-EU intermediaries
Article 52 - Special measures for EU intermediaries
Article 53 - Suspension of administrative bodies
Article 54 - Suspension of the marketing of units of foreign collective investment undertakings
Article 55 - Precautionary measures applicable to financial salesmen
Chapter II - Crisis procedures
Article 56 - Special administration
Article 57 - Compulsory administrative liquidation
Article 58 - Italian branches of foreign investment companies
Article 59 - Compensation systems
Article 60 - Foreign intermediaries' membership of compensation systems
Article 60-bis - Liability of Italian investment companies, asset management companies and SICAVs for administrative offences consequent on a crime
PART III - REGULATION OF MARKETS AND CENTRAL DEPOSITORIES OF FINANCIAL INSTRUMENTS
TITLE I - REGULATION OF MARKETS
Chapter I - Regulated markets
Article 60-ter - Regulation principles
Article 61 - Regulated markets for financial instruments
Article 62 - Market rules
Article 63 - Authorization of regulated markets
Article 64 - Organization and operation of markets and stock exchange companies
Article 65 - Recording of transactions in financial instruments at the stock exchange company and obligations of communication of transactions in financial instruments concluded
Article 66 - Wholesale markets in government securities
Article 66-bis - Energy and gas derivatives markets
Article 67 - Recognition of markets
Article 68 - Contract guarantee systems
Article 69 - Clearing and settlement of transactions involving financial instruments other than derivatives
Article 70 - Clearing and settlement of transactions involving financial instruments
Article 70-bis - Access to guarantee, clearing and settlement systems for transactions on financial instruments
Article 70-ter - Agreements between guarantee, clearing and settlement systems for regulated markets
Article 71 - Finality of settlement of transactions involving financial instruments (repealed)
Article 72 - Regulation of market insolvencies
Article 73 - Supervision of stock exchange companies
Article 74 - Supervision of markets
Article 75 - Extraordinary measures to protect the market and stock exchange company crises
Article 76 - Supervision of wholesale markets in government securities
Article 77 - Supervision of clearing, settlement and guarantee systems
Chapter II - Unregulated markets
Article 77-bis - Multilateral trading systems
Article 78 - Systematic internalisers
Article 79 - Multilateral systems for the exchange of money deposits in euro
Chapter II-bis - Common provisions
Article 79-bis - Transparency requirements
Article 79-ter - Consolidation of information
TITLE II – CENTRAL DEPOSITORY SYSTEM FOR FINANCIAL INSTRUMENTS
Chapter I – Regulations for central depositories
Article 80 - Central depository activities in relation to financial instruments
Article 81 - Enactment regulation and service regulations
Article 81-bis - Access to the central depository system
Article 82 - Supervision
Article 83 - Central depositories in crisis
Chapter II – Central depository system regulations
Section I – Central depository system for dematerialisation
Article 83-bis - Scope of application
Article 83-ter - The central depository system
Article 83-quater - Central depository and intermediary duties
Article 83-quinquies - Rights of the account holder
Article 83-sexies - Right to attend shareholders’ meetings and the exercise of voting rights
Article 83-septies - Opposable exceptions
Article 83-octies - Establishing restrictions
Article 83-novies - Duties of the intermediary
Article 83-decies - Intermediary liability
Article 83-undecies - Issuer obligations
Article 83-duodecies - Shareholder identification
Section II – Central depository system for financial instruments in the form of securities
Article 84 - Identification and disclosures regarding centralised financial instruments (repealed)
Article 85 - Central deposits
Article 86 - Transfer of rights attached to financial instruments on deposit
Article 87 - Restrictions on centrally deposited financial instruments
Article 88 - Withdrawal of centrally deposited financial instruments
Article 89 - Updating of the shareholders’ register
Chapter III – Central depository regulations for government securities
Article 90 - Central deposit of government securities
PART IV - REGULATION OF ISSUERS
TITLE I - GENERAL PROVISIONS
Article 91 - Consob's powers
Article 92 - Equal treatment
Article 93 - Definition of control
TITLE II - SOLICITATION OF PUBLIC SAVINGS
Chapter I - Public offerings
Article 93-bis - Definitions
Section I - Public offering of EU financial instruments and financial products other than open-end UCITS units or shares
Article 94 - Obligations of offerors
Article 94-bis - Approval of the prospectus
Article 95 - Implementing provisions
Article 95-bis - Cancellation of a purchase or subscription
Article 96 - Issuer financial statements
Article 97 - Information requirements
Article 98 - Recognition of prospectuses
Article 98-bis - Issuers from non-EU countries
Section II - Public offering of open-end UCITS units or shares
Article 98-ter - The offering prospectus
Article 98-quater - Implementation provisions
Article 98-quinquies - Reporting obligations
Section III - Common provision
Article 99 - Powers of interdiction
Article 100 - Cases of inapplicability
Article 100-bis - Circulation of financial products
Article 101 - Advertisements
Chapter II - Public offers to buy or exchange financial instruments
Section I - General provisions
Article 101-bis - Definitions and application environment
Article 101-ter - Supervisory authority and applicable law
Article 102 - Bidder obligations and prohibitive powers
Article 103 - Implementation of offers
Article 104 - Defensive measures
Article 104-bis - Breakthrough
Article 104-ter - Reciprocity clause
Section II - Mandatory public offers to buy
Article 105 - General provisions
Article 106 - Global takeover bid
Article 107 - Prior partial bids
Article 108 - Commitment to squeeze-out
Article 109 - Squeeze-out in concert
Article 110 - Failure to comply with obligations
Article 111 - Right to squeeze-out
Article 112 - Implementing provisions
TITLE III - ISSUERS
Chapter I - Company information
Article 113 - Listing particulars
Article 113-bis - Admission to trading of open-end UCITS units or shares
Article 114 - Information to be provided to the public
Article 114-bis - Information to be provided to the market concerning the allocation of financial instruments to corporate officers, employees and collaborators
Article 115 - Information to be disclosed to Consob
Article 115-bis - Lists of persons having access to inside information
Article 116 - Financial instruments widely distributed among the public
Article 117 - Accounting information
Article 117-bis - Mergers between listed and unlisted companies
Article 117-ter - Provisions concerning ethical finance
Article 118 - Provisions not applicable
Article 118-bis - Checking information provided to the public
Chapter II - Listed companies
Article 119 - Scope
Section I - Ownership structures
Article 120 - Notification requirements for major holdings
Article 121 - Rules governing cross-holdings
Article 122 - Shareholders' agreements
Article 123 - Duration of agreements and right of withdrawal
Article 123-bis - Report on corporate governance and ownership structures
Article 124 - Provisions not applicable
Section I-bis– Information on the adoption of codes of conduct
Article 124-bis - Reporting obligations regarding codes of conduct (repealed)
Article 124-ter - Disclosures regarding codes of conduct
Section II – Shareholder rights
Article 125 - Calling of shareholders' meetings at the request of minority shareholders (repealed)
Article 125-bis - Notice of call to shareholders’ meetings
Article 125-ter - Disclosure of items on the agenda
Article 125-quater - Web site
Article 126 - Notice of second and subsequent calls
Article 126-bis - Additions to the agenda of shareholders’ meetings
Article 127 - Postal or electronic voting
Article 127-bis - Voidability of resolutions and right to withdrawal
Article 127-ter - Right to ask questions prior to the shareholders' meeting
Article 127-quater - Dividend increases
Article 128 - Complaints to the board of auditors and the courts (repealed)
Article 129 - Company actions for liability (repealed)
Article 130 - Information for shareholders
Article 131 - Right of withdrawal from mergers and spin-offs (repealed)
Article 132 - Acquisition of own or parent company shares
Article 133 - Exclusion upon request from trading
Article 134 - Increases in capital
Section II-bis – Cooperatives
Article 135 - Capital percentages
Article 135-bis - Regulations for cooperatives
Article 135-ter - Market disclosures on the assignment of financial instruments and company officers, employees or collaborators
Article 135-quater - Extraordinary shareholders’ meeting
Article 135-quinquies - Additions to the agenda of the shareholders' meeting
Article 135-sexies - Financial statements
Article 135-septies - Audit reports
Article 135-octies - Share capital increase proposals
Section II-ter – Proxies
Article 135-novies - Representation at the shareholders’ meeting
Article 135-decies - Conflict of interest of the representative and substitutes
Article 135-undecies - Appointed representative of a listed company
Article 135-duodecies - Cooperatives
Section III – Solicitation of proxies
Article 136 - Definitions
Article 137 - General provisions
Article 138 - Solicitation
Article 139 - Requirements for promoters (repealed)
Article 140 - Persons authorized to engage in solicitation (repealed)
Article 141 - Shareholders' associations
Article 142 - Proxies
Article 143 - Liability
Article 144 - Performance of solicitations and collections of proxies
Section IV - Savings shares and other classes of shares
Article 145 - Issue of shares
Article 146 - Special shareholders' meetings
Article 147 - Common representatives
Article 147-bis - Meetings of classes of investors
Section IV-bis– Administration bodies
Article 147-ter - Election and composition of the board of directors
Article 147-quater - Composition of the management board
Article 147-quinquies - Integrity requirements
Section V - Internal control bodies
Article 148 - Composition
Article 148-bis - Limits on the cumulation of positions
Article 149 - Duties
Article 150 - Information requirements
Article 151 - Powers
Article 151-bis - Powers of the supervisory board
Article 151-ter - Powers of the management control committee
Article 152 - Reports to the courts
Article 153 - Obligation to report to the shareholders' meeting
Article 154 - Provisions not applicable
Section V-bis - Financial information
Article 154-bis - Manager charged with preparing a company’s financial reports
Article 154-ter - Financial reporting
Section VI – Statutory audit
Article 155 - Performance of audits
Article 156 - Auditors reports
Article 157 - Effects of audit opinions on the accounts
Article 158 - Share capital increase proposals
Article 159 - Conferment and revocation of the engagement
Article 160 - Incompatibility (repealed)
Article 161 - Special register of independent auditors (repealed)
Article 162 - Supervision of independent auditors (repealed)
Article 163 - Consob measures (repealed)
Article 164 - Liability (repealed)
Article 165 - Auditing of groups (repealed)
Article 165-bis - Companies with control of listed companies (repealed)
Section VI- bis – Relations with foreign companies having their registered office in a country that does not ensure corporate transparency
Article 165-ter - Scope
Article 165-quater - Obligations of Italian parent companies
Article 165-quinquies - Obligations of Italian affiliates
Article 165-sexies - Obligations of Italian subsidiaries
Article 165-septies - Consob’s powers and implementing provisions
PART V - SANCTIONS
TITLE I - PENAL SANCTIONS
Chapter I - Intermediaries and markets
Article 166 - Unauthorized activity
Article 167 - Breach of duty
Article 168 - Commingling of assets
Article 169 - Holdings of capital
Article 170 - Central depository services for financial instruments
Article 170-bis - Obstruction of Consob's supervisory functions
Article 171 - Protection of supervision (repealed)
Chapter II - Issuers
Article 172 - Irregular acquisition of shares
Article 173 - Failure to dispose of shareholdings
Article 173-bis - False statements in prospectuses
Article 174 - False notifications and obstruction of Consob' s functions (repealed)
Chapter III - Auditing of accounts
Chapter III - Auditing of accounts
Article 174-bis - False statements in auditing firms’ reports or communications (repealed)
Article 174-ter - Corruption of auditors (repealed)
Article 175 - False statements in auditing firms' reports or communications (repealed)
Article 176 - Use and divulgence of confidential information (repealed)
Article 177 - Illegal financial relationships with the audited company (repealed)
Article 178 - Illegal compensation (repealed)
Article 179 - Common provisions (repealed)
TITLE I-BIS- INSIDER TRADING AND MARKET MANIPULATION
Chapter I - General provisions
Article 180 - Definitions
Article 181 - Inside information
Article 182 - Scope
Article 183 - Exemptions
Chapter II - Penal sanctions
Article 184 - Insider trading
Article 185 - Market manipulation
Article 186 - Accessory penalties
Article 187 - Confiscation
Chapter III - Administrative sanctions
Article 187-bis - Insider trading
Article 187-ter - Market manipulation
Article 187-quater - Accessory administrative sanctions
Article 187-quinquies - Liability of the entity
Article 187-sexies - Confiscation
Article 187-septies - Sanction procedures
Chapter IV - Consob’s powers
Article 187-octies - Consob’s powers
Article 187-nonies - Suspicious transactions
Chapter V - Relationship between proceedings
Article 187-decies - Relations with the judicial authorities
Article 187-undecies - Consob’s powers in criminal proceedings
Article 187-duodecies - Relationship between criminal proceedings and administrative and appeal proceedings
Article 187-terdecies - Collection of fines and pecuniary sanctions in criminal proceedings
Article 187-quaterdecies - Consultation procedures
TITLE II - ADMINISTRATIVE SANCTIONS
Article 187- quinquiesdecies - Safeguarding of Consob's supervisory functions
Article 188 - Unauthorized use of names
Article 189 - Holdings of capital
Article 190 - Other financial penalties regarding intermediaries, markets and the central depository system for financial instruments
Article 191 - Public offerings
Article 192 - Takeover bids or exchange tender offerings
Article 192-bis - Corporate governance disclosures
Article 192-ter - Admission to trading
Article 193 - Corporate disclosures and the duties of auditors, statutory auditors and independent statutory auditors
Article 193-bis - Business dealings with foreign companies having their registered office in a country that does not ensure corporate transparency
Article 194 - Proxies
Article 195 - Sanction procedures
Article 196 - Sanctions applicable to financial salesmen
PART VI - TRANSITIONAL AND FINAL PROVISIONS
Article 197 - Consob staff
Article 198 - Endorsement of share certificates
Article 199 - Trust companies
Article 200 - Intermediaries already authorized
Article 201 - Stockbrokers
Article 202 - Rules regarding compulsory stock exchange settlement
Article 203 - Forward contracts
Article 204 - Central depository services
Article 205 - Price quotations
Article 206 - Rules applicable to companies listed on markets other than the stock exchange
Article 207 - Shareholders' agreements
Article 208 - Proxies, saving shares, boards of auditors and auditing firms
Article 209 - Auditing firms
Article 210 - Amendments to the Civil Code
Article 211 - Amendments to the Consolidated Law on Banking
Article 212 - Provisions concerning privatizations
Article 213 - Conversion of bankruptcy into compulsory administrative liquidation
Article 214 - Repeals
Article 215 - Implementing provisions
Article 216 - Entry into force
SECTION A - Services
SECTION B - Instruments
SECTION C - Non-core services
PART I
COMMON PROVISIONS
Article 1
Definitions
1. In this legislative decree:
a) "Bankruptcy Law" shall mean Royal Decree no. 267 of 16 March 1942 and subsequent amendments;
b) "Consolidated Law on Banking" shall mean Legislative Decree no. 385 of 1 September 1993 and subsequent amendments;
c) "Consob" shall mean Commissione nazionale per le società e la borsa;
d) "Isvap" shall mean Istituto per la vigilanza sulle assicurazioni private e di interesse collettivo;
e) "Italian investment company" (società di intermediazione mobiliare - SIM) shall mean an undertaking, other than a bank or a financial intermediary entered in the register referred to in Article 107 of the Consolidated Law on Banking, authorised to provide investment services or activities having its registered office and head office in Italy2 ;
f) "EU investment company" shall mean an undertaking, other than a bank, authorised to provide investment services or activities having its registered office and head office in the same member state of the European Union, other than Italy3 ;
g) "non-EU investment company" shall mean an undertaking, other than a bank, authorised to provide investment services or activities having its registered office in a state that is not a member of the European Union4 ;
h) "investment companies" shall mean Italian investment companies and EU and non-EU investment companies;
i) "Società di investimento a capitale variabile" (SICAV) shall mean an open-end investment company having its registered office and head office in Italy and the exclusive purpose of collective investment of the capital raised by offering its shares to the public;
j) “investment funds”: shall mean equity raised independently through the issue of one or more fund units from among a number of investors, with the aim of investing the equity raised in accordance with a pre-established investment policy; divided into units pertaining to a given number of investors; managed upstream in the interests of the investors and fully independent of those investors5;
k) "open-end fund" shall mean a mutual fund whose participants have the right to request, at any time, to redeem units in accordance with the procedures established by the rules of the fund;
l) "closed-end fund" shall mean a mutual fund in which the right to redeem units may be exercised by participants only at predetermined maturities;
m) "collective investment undertakings" shall mean mutual funds and SICAVs;
n) "collective portfolio management" shall mean the service that is performed through:
1) the promotion, establishment and organisation of mutual funds and the administration of participants' accounts;
2) the management of the assets of own or third-party collective investment undertakings by means of investment in financial instruments, claims and other movable or immovable assets;6
o) "asset management company" (società di gestione del risparmio - SGR) shall mean a società per azioni having its registered office and head office in Italy authorised to provide the service of collective portfolio management;7
o-bis) "harmonised asset management company" shall mean a company having its registered office and head office in an EU country other than Italy authorised under the UCITS Directive to provide the service of collective portfolio management;8
p) "promoter" shall mean an Italian asset management company that performs the activity indicated in paragraph n), point 1);9
q) "manager" shall mean an Italian asset management company that performs the activity indicated in paragraph n), point 2);10
r) "authorised intermediaries" shall mean investment companies (SIM), EU investment companies with branches in Italy, non-EU investment companies, asset management companies, harmonised asset management companies, SICAVs and financial intermediaries entered in the register referred to in Article 107 of the Consolidated Law on Banking and Italian banks, EU banks with branches in Italy and non-EU banks, authorised to engage in investment services or activities;11
s) "services subject to mutual recognition" shall mean the activities and services listed in sections A and B of the table annexed to this decree, authorised in the home EU member state12 ;
t) "public offering or investment incentive" shall mean every offer or incentive, invitation to offer or promotional message, in whatsoever form addressed to the public, whose objective is the sale or subscription of financial products including the allocation through authorised people;13
u) "financial products" shall mean financial instruments and every other form of investment of a financial nature; bank or postal deposits without the issue of financial instruments shall not constitute financial products;14
v) "public offer to buy or exchange" shall mean every offer, invitation to offer or promotional message, in whatsoever form effected, whose objective is the purchase or exchange of financial products, addressed to a number of persons and of a total amount greater than that indicated in the regulation pursuant to article 100, subsection 1, paragraphs b) and c); an offering of securities issued by the central banks of EU Member States shall not constitute a mandatory takeover bid or exchange tender offering15 ;
w) "listed issuers" shall mean Italian or foreign issuers of financial instruments listed on Italian regulated markets;
w-bis) “financial products issued by insurance companies”: the policies and operations referred to in the sectors on Life III and V according to Article 2, Subsection 1, of the Legislative Decree No. 209 of 7 th September 2005, with the exclusion of individual pension schemes according to Article 13, Subsection 1, paragraph b), of Legislative Decree No. 252 of 5 th September 2005.16
w-ter) “regulated market”: shall mean a multilateral system which permits or facilitates the meeting, internally and according to non-discretional regulations, of multiple third party purchase and sale interests with regard to financial instruments, admitted to trading in compliance with the rules of the market, in order to effect contracts, and which is operated by a management company, is authorised and operates regularly17 .
w-quater) “listed issuers with Italy as home member state”:
1) issuers with shares admitted to trading on Italian regulated markets or of another EU Member State, with registered office in Italy;
2) issuers of debt securities with a nominal unit value of less than one thousand Euro, or corresponding value in a different currency, admitted to trading on Italian regulated markets or those of another EU Member State, with registered office in Italy;
3) issuers of securities indicated under points 1) and 2), with registered office in a non-EU country, for which the first application for admission to trading on an EU regulated market was submitted in Italy or Italy was later chosen as the home member state when said first application for admission was not implemented by decision of the issuer;
4) issuers of securities other than those indicated under points 1) and 2), with registered office in Italy or whose securities are admitted to trading on an Italian regulated market and who have adopted Italy as the home Member State. The issuer may choose one Member State only as the home member state. The decision shall remain valid for at least three years, unless the issuer's securities are no longer admitted to trading on any EU regulated market18 .
1-bis. “Securities” shall mean categories of securities for trading on the capital market, such as:
a) company shares and other shares equivalent to shares of companies, partnerships or other persons and share deposit certificates;
b) bonds and other debt securities, including certificates of deposit relating to such securities;
c) any other security normally negotiated which permits the purchase or sale of securities indicated in the preceding paragraphs;
d) any other security usually involving cash settlement determined with reference to securities indicated in the preceding paragraphs, to currency, interest rates, returns, commodities, indices or measures.19
1-ter. “Money market instruments” shall mean categories of instruments normally negotiated on the money market, such as Treasury bonds, certificates of deposit and commercial bills20 .
2. "Financial instruments" shall mean:
a) securities;
b) money market instruments;
c) units in collective investment undertakings;
d) options, futures, swaps, futures contracts on interest rates and other derivative contracts linked to securities, currency, interest rates or returns, or other derivatives, financial indices or measures that may be settled by the physical delivery of the underlying asset or by cash payment of differentials;
e) options, futures, swaps, interest rate swaps, and any other derivative contracts on commodities, settlement of which is by payment of the differentials in cash, or at the discretion of one of the parties, except in cases where such option is the result of default or other event leading to cancellation of the contract;
f) options, futures, swaps and other derivative contracts on commodities, the settlement of which may be by physical delivery of the underlying asset and which are traded on a regulated market and/or multilateral trading systems;
g) options, futures, swaps, forward contracts and other derivative contracts on commodities, the settlement of which may be by physical delivery of the underlying asset, other than those indicated in paragraph f), that have no commercial purpose, and with the characteristics of other derivatives, taking into consideration, amongst other things, whether they are cleared and executed through recognised clearing houses or whether they are subject to regular margin calls;
h) derivatives for the transfer of credit risk;
i) differential financial contracts;
j) options, futures, swaps, futures contracts, swaps, futures contracts on interest rates and other derivative contracts related to climatic variables, transport rates, emission levels, inflation rates or other official economic statistics, settled by cash payment of differentials or at the discretion of one of the parties, except in cases where such option is the result of default or other event leading to cancellation of the contract and other derivative contracts on assets, options, bonds, indices and measures other than those indicated in previous paragraphs, with the characteristics of other derivative financial instruments, taking into consideration, amongst other things, whether are traded on a regulated market or multilateral trading systems, whether they are cleared and executed through a recognised clearing house or whether they are subject to regular margin calls21 .
2-bis. The Minister of the Economy and Finance, by the regulation pursuant to Article 18, subsection 5, shall identify:
a) the other derivative contracts pursuant to subsection 2, paragraph g), with the characteristics of other derivatives, cleared and executed through recognised clearing houses or subject to regular margin calls;
b) the other derivative contracts pursuant to subsection 2, paragraph j), with the characteristics of other derivatives, traded on a regular market or through multilateral trading systems, cleared and executed through recognised clearing houses or subject to regular margin calls22 ;
3. "Derivatives" shall mean the financial instruments specified in subsection 2, paragraphs d), e), f), g), h), i) and j), as well as the financial instruments specified in subsection 1-bis, paragraph d)23 .
4. Instruments of payment shall not be considered financial instruments.
5. "Investment services and activities" shall mean the following activities where they concern financial instruments:
a) dealing for own account;
b) execution of orders for clients;
c) subscription and/or placement with firm commitment underwriting or standby commitments to issuers;
c-bis) placement without firm or standby commitment to issuers;
d) portfolio management;
e) reception and transmission of orders;
f) investment consultancy,
g) management of multilateral trading systems24 .
5-bis. “ Trading on own account” shall mean buy and sell transactions of financial instruments, directly and in relation to customer orders, together with market maker activities25..
5-ter. “ Systematic internaliser” shall mean the person who, in an organised, frequent and systematic manner, trades on his own account executing customer orders outside a regulated market or multilateral trading systems26.
5-quarter. “ Market maker” shall mean a person offering his services to trade directly on regulated markets and multilateral trading systems on a continuous basis, buying and selling financial instruments at self-established prices27.
5-quinquies. “ Portfolio management” shall mean the management, on a discretional and individual basis, of portfolio investments which include one or more financial instruments and according to mandate conferred by customers28.
5-sexies. The service pursuant to subsection 5, paragraph e), including the receipt and transmission of orders as well as consistent activities to place two or more investors in contact, thereby making it possible to conclude transactions by mediation29.
5-septies. “Investment consultancy” shall mean the provision of customised recommendations to a customer upon request or as an initiative by the service provider, regarding one or more transaction on an identified financial instrument. The recommendation shall be customised when it is presented as suitable for the customer or is based on consideration of the customer’s characteristics. A recommendation shall not be customised if disclosed to the public through distribution channels30.
5-octies. “ Multilateral trading systems management” shall mean the management of multilateral trading systems which permit the meeting, within and on the basis of non-discretional rules, of multiple third party purchase and sale interests relating to financial instruments, in such a way as to give rise to contracts31.
6. "Non-core services" shall mean the following:
a) safekeeping and administration of financial instruments and related services32 ;;
b) safe custody services;
c) lending to investors to enable them to carry out transactions in financial instruments where the lender is involved in the transaction;
d) advice to undertakings on capital structure, industrial strategy and related matters and advice and services relating to mergers and the purchase of undertakings;
e) services related to the issue or placement of financial instruments, including the organisation and constitution of underwriting and placement syndicates;
f) Investment research and financial analysis or other forms of general recommendation regarding transactions on financial instruments33;
g) foreign exchange trading where this is connected with the provision of investment services.
g-bis) activities and services identified by regulation by the Minister of the Economy and Finance, after consulting the Bank of Italy and Consob, and relating to the provision of investment or accessory services on derivatives34.
6-bis. "Shareholdings or holdings" shall mean shares, capital parts and other financial instruments that confer administrative rights or in any case those provided for by the final subsection of Article 2351 of the Civil Code.35
6-ter. Except as specified, the provisions of this legislative decree that refer to the board of directors, the administrative body or the directors shall also apply to the management board and the members thereof.36
6-quater. Except as specified, the provisions of this legislative decree that refer to the board of auditors, the members thereof or the control body shall also apply to the supervisory board, the management control committee and the members thereof.37
Article 2
Relationship to Community law
1. The Ministry of the Economy and Finance,38 the Bank of Italy and Consob shall exercise the powers conferred on them in harmony with the provisions of Community law, apply the regulations and decisions of the European Union and act on recommendations concerning matters governed by this decree.
Article 3
Administrative measures
1. The ministerial regulations referred to in this decree shall be adopted under Article 17(3) of Law 400/1998.
2. The Bank of Italy and Consob shall establish the time limits and procedures for the adoption of the measures falling within the scope of their respective authority.
3. The regulations and measures of general application adopted by the Bank of Italy and Consob shall be published in the Gazzetta Ufficiale. Other important measures concerning persons subject to supervision shall be published by the Bank of Italy and Consob in their respective Bulletins.
4. By 31 January of each year the Ministry of the Economy and Finance,39 shall publish all the regulations and measures of general application issued under this decree as well as the rules governing the markets in a single compendium, which may be in electronic form, where even one such document has been amended during the preceding year.
Article 4
Cooperation between authorities and professional secrecy
1. The Bank of Italy, Consob, the Commissione di vigilanza sui fondi pensioni, Isvap and the Ufficio Italiano Cambi shall cooperate by exchanging information and otherwise for the purpose of facilitating their respective functions. Said authorities may not invoke professional secrecy in their mutual relations 40.
2. The Bank of Italy and Consob shall cooperate by exchanging information and otherwise with the competent authorities of the European Union and individual EU countries for the purpose of facilitating their respective functions.
2-bis. For the purposes of subsection 2, Consob and the Bank of Italy may conclude cooperation agreements with the competent authorities of EU member states that may involve mutual delegation of supervisory tasks41.
2-ter. Consob shall be the point of contact for the receipt of requests for information from competent authorities of EU member states regarding investment services and activities performed by authorised persons and regulated markets. Consob shall cooperate with the Bank of Italy on aspects for which the latter is responsible. The Bank of Italy shall submit information simultaneously to both the competent authority of the EU member state issuing the request and to Consob42.
3. For the same purpose, the Bank of Italy and Consob may cooperate by exchanging information and otherwise with the competent authorities of non-EU countries43 .
4. Information received by the Bank of Italy and Consob pursuant to subsections 1, 2 and 3 may not be transmitted to third parties or other Italian authorities, including the Minister of the Economy and Finance, without the consent of the authority that supplied it.44
5. The Bank of Italy and Consob may exchange information:
a) with administrative and judicial authorities in connection with winding-up or bankruptcy proceedings in Italy or abroad involving authorised intermediaries;
b) with bodies responsible for the administration of compensation systems;
c) with bodies responsible for the clearing and settlement of market transactions;
d) with stock exchange companies, for the purpose of ensuring the regular operation of the markets they manage.
5-bis. The exchange of information with authorities of non-EU countries shall be subject to the existence of provisions concerning professional secrecy.45
6. The information referred to in subsection 5, paragraphs b), c) and d), may be disclosed to third parties with the consent of the person who supplied it. Such consent shall not be necessary where the information has been provided in compliance with domestic and international cooperation obligations.
7. The Bank of Italy and Consob may also exercise the powers conferred on them by law for the purpose of cooperating with other authorities and at the request thereof. The competent authorities of EU and non-EU countries may ask the Bank of Italy and Consob to carry out investigations in Italy on their behalf pursuant to the provisions of this decree, and to issue notifications on their behalf in Italy in relation to provisions adopted under Italian law. Such authorities may ask for members of their staff to be allowed to accompany the personnel of the Bank of Italy and Consob during the performance of the investigations.46
8. For any other purpose the provisions governing professional secrecy in respect of information and data in the possession of the Bank of Italy shall be unaffected.
9. The Bank of Italy may reach agreements with the supervisory authorities of other EU countries on methods of collaboration, including the division of the tasks of each authority, for carrying out supervision on a consolidated basis of groups operating in more than one country.
10. All the information and data possessed by Consob by virtue of its supervisory activity shall be covered by professional secrecy, with respect to governmental authorities as well, except for the Minister of the Economy and Finance.47 The cases in which the law provides for investigations of violations subject to criminal sanction shall be unaffected.
11. In the performance of their supervisory functions employees of Consob shall be public officials and required to report any irregularities which they may discover exclusively to Consob, even where such irregularities appear to be criminal offences.
12. Employees of Consob and consultants and experts engaged by Consob shall be bound by professional secrecy.
13. Governmental authorities and public entities shall provide the information, documents and every further form of cooperation requested by Consob in accordance with the laws governing each authority or entity.
PART II
REGULATION OF INTERMEDIARIES
TITLE I
GENERAL PROVISIONS
Chapter I
Supervision
Article 5
Purpose and scope
1. The objectives of supervisory activities indicated in this section shall be:
a) the safeguarding of faith in the financial system;
b) the protection of investors;
c) the stability and correct operation of the financial system;
d) competitiveness of the financial system;
e) the observance of financial provisions48 .
2. For the pursuance of objectives indicated in subsection 1, the Bank of Italy shall be responsible for risk containment, asset stability and the sound and prudent management of intermediaries49 .
3. For the pursuance of objectives indicated in subsection 1, Consob shall be responsible for the transparency and correctness of conduct50 .
4. The Bank of Italy and Consob shall exercise supervisory powers over authorised persons. Each shall supervise the observance of regulatory and legislative provisions according to their respective responsibilities as defined in subsections 2 and 351 .
5. The Bank of Italy and Consob shall operate in a coordinated manner, inter alia with a view to minimizing the costs incurred by authorised intermediaries, and shall notify each other of the measures adopted and the irregularities discovered in carrying out their supervisory activity.
5-bis. The Bank of Italy and Consob, with the aim of coordinating their supervisory duties and reducing to a minimum the onus on authorised persons, shall stipulate a protocol of understanding in relation to:
a) the responsibility of each and task performance methods, according to the prevalence criteria of duties pursuant to subsections 2 and 3;
b) the exchange of information, also with reference to irregularities discovered and measures adopted in the exercise of supervisory activities52.
5-ter. The protocol of understanding pursuant to subsection 5-bis shall be made public by the Bank of Italy and Consob according to jointly agreed methods, and shall be attached to the regulation pursuant to Article 6, subsection 2-bis53.
Article 6
Regulatory powers
01. In the exercise of supervisory functions, the Bank of Italy and Consob shall observe the following principles:
a) valuation of the decision-making autonomy of authorised persons;
b) proportionality, intended as a criterion for the exercise of power suited to achieving the purpose, with the minimum sacrifice of addressees'interests;
c) recognition of the international character of the financial market and safeguarding of the competitive position of Italian industry;
d) facilitation of innovation and competition54 .
02. With regard to matters governed by Commission Directive 2006/73/EC of 10 May 2006, the Bank of Italy and Consob may maintain or impose by regulation additional obligations to those of the said directive only in exceptional cases in which such obligations are objectively justified and proportionate, taking into account the need to face specific risks to protect investors or market integrity which are not adequately considered in the European provisions, and if at least two of the following conditions are satisfied:
a) the specific risks which the added obligations aim to face are particularly significant, considering the structure of the Italian market;
b) the specific risks which the added obligations aim to face should emerge or become evident after the issue of related European provisions55 .
03. The Bank of Italy and Consob shall inform the Minister of the Economy and Finance of the regulatory provisions containing additional obligations pursuant to subsection 02 for the purposes of notifying the European Commission56 .
1. The Bank of Italy, after consulting Consob, shall issue a regulation on:
a) obligations of investment companies and asset management companies in terms of capital adequacy, the limitation of risk in its various forms, permissible shareholdings;57
b) obligations of authorised intermediaries in terms of the manner of depositing and subdepositing financial instruments and funds belonging to customers;58
c) the rules applicable to collective investment undertakings concerning:
1) the criteria and prohibitions relating to investment activity, having regard, inter alia, to group relationships
2) the prudential rules for limiting and spreading risk;
3) the standard formats and procedures to be used for drawing up the accounting statements that asset management companies and SICAVs must prepare periodically;
4) the methods of calculating the value of units or shares of collective investment undertakings;
5) the methods and procedures to be adopted to value goods and securities in which assets are invested and the frequency of valuation. For the valuation of goods not traded in regulated markets, the Bank of Italy may prescribe recourse to independent experts and may also require their intervention when managers buy and sell goods.
1-bis. The provisions pursuant to subsection 1, paragraph a) allow for the adoption of internal risk measurement systems to determine equity requirements, subject to authorisation by the Bank of Italy, and for the use of credit risk assessments issued by the company or external authorities59 .
2. Consob, after consulting the Bank of Italy and taking into account the different need for protection of investors in relation to their nature and professional experience, shall issue a regulation governing the obligations of authorised intermediaries on:
a) transparency, including:
1) reporting obligations on the provision of investment services and activities, and collective asset management services, with particular reference to the level of risk of each type of financial product and portfolio management offered, to the companies and to services provided, to the safeguarding of financial instruments or cash equivalents held by the company, and the costs, incentives and strategies for executing orders;
2) the methods and criteria to be adopted in advertising and promotion communications and investment research;
3) obligations to inform customers regarding the execution of orders, portfolio management, transactions with potential liabilities and statements of customers’ financial instruments or cash equivalents held by the company;
b) correctness of conduct, including:
1) obligations to obtain information from customers or potential customers with the aim of assessing the adequacy or appropriateness of the transactions or services provided;
2) measures for the execution of orders under the best conditions for customers;
3) obligations relating to order management;
4) the obligation to ensure that portfolio management is performed in a manner consistent with the specific needs of individual investors, and that on a collective basis is performed in observance of the aims of UCITS investments;
5) the conditions under which incentives may be paid or received60 .
2-bis. The Bank of Italy and Consob shall jointly govern the obligations of authorised persons, by regulation and in reference to the provision of investment services and activities, together with collective asset management services, on matters of;
a) general organisational requirements;
b) business continuity;
c) administrative and accounting organisation, including establishment of a department pursuant to paragraph e)
d) procedures, including internal audit, for the correct and transparent provision of investment services and activities together with collective asset management services;
e) monitoring of compliance with regulations;
f) company risk management;
g) internal audit;
h) top management responsibilities;
i) complaint handling;
j) personal transactions;
k) outsourcing of essential or important operations, services or activities;
l) management of conflict of interest potentially prejudicial to customers;
m) record keeping;
n) procedures including internal audit, for the receipt or payment of incentives61 .
2-ter. For supervision purposes, pursuant to subsection 2-bis, the responsible parties shall be:
a) The Bank of Italy for aspects pursuant to paragraphs a), b), c), f), g) and h);
b) Consob for aspects pursuant to paragraphs d), e), i), j), l), m) and n);
c) The Bank of Italy and Consob, according to their respective duties pursuant to Article 5, subsections 2 and 3, and for aspects pursuant to paragraph k)62 .
2-quater. By regulation and after consulting the Bank of Italy, Consob shall identify:
a) standards of conduct which shall not apply in relations between managers of multilateral trading systems and their participants;
b) the conditions in which authorised persons shall not be obliged to observe regulatory provisions pursuant to subsection 2, paragraph b), subparagraph 1), when they provide services pursuant to Article 1, subsection 5, paragraphs b) and e);
c) the specific discipline applicable to relations between authorised persons and professional customers;
d) standards of conduct which shall not apply between authorised persons providing services pursuant to Article 1, subsection 5, paragraphs a), b) and e), and qualified counterparties, intended as:
1) investment companies, banks, insurance companies, UCITS, asset management companies, harmonised asset management companies, pension funds, financial intermediaries registered in the lists pursuant to Articles 106, 107 and 113 of the Consolidated Law on Banking, companies pursuant to Article 18 of the Consolidated Law on Banking, e-money organisations, banking foundations, national governments and their offices, including public bodies established to manage public debt, central banks and international public organisations;
2) companies whose main activity consists in trading commodities on own account and derivatives on commodities:
3) companies whose exclusive activity consists in trading on own account on derivatives markets, and solely for hedging purposes on OTC markets, provided they are guaranteed by members adhering to the clearing house for such markets, when the responsibility for the performance of contracts stipulated by said companies lies with members adhering to the clearing house for such markets;
4) other categories of private persons identified by regulation by Consob, after consulting the Bank of Italy, with respect to criteria pursuant to directive 2004/39/EC and related execution measures;
5) categories corresponding to those of previous paragraphs for persons in non-EU countries63 .
2-quinquies. By regulation and after consulting the Bank of Italy, Consob shall identify private professional customers, together with the criteria to identify private persons who on request may be treated as professional customers, and related request procedures64.
2-sexies. By regulation and after consulting the Bank of Italy and Consob, the Minister of the Economy and Finance shall identify public professional customers, and criteria to identify public persons who on request may be treated as professional customers, and related request procedures65.
Article 7
Supervisory powers
1. The Bank of Italy and Consob, within the scope of their respective authority, may take the following actions with respect to authorised intermediaries:
a) convene the directors, members of the board of auditors and managers;
b) order the convening of the governing bodies and set the agenda for the meeting;
c) proceed directly to convene the governing bodies where the competent bodies have not complied with an order issued under paragraph b);
2. The Bank of Italy may, for the purposes of stability, issue provisions of a particular nature related to matters governed by article 6, subsection 1, paragraph 1), and may adopt, where required, restricted or limited provisions regarding services, activities, transactions and territorial structure, as well as prohibit the distribution of profits or other capital items66 .
3. In the public interest or in the interest of participants, the Bank of Italy and Consob, within the scope of their respective authority, may order the suspension or temporary limitation of the issue or redemption of units or shares of collective investment undertakings.
Article 8
Reporting requirements
1. The Bank of Italy and Consob, to the extent of their duties, may require authorised intermediaries to communicate data and information and to transmit documents and records in the manner and within the time limits they establish.67
2. The powers envisaged in subsection 1 may also be exercised against the independent statutory auditor68 .
3. The board of auditors shall inform the Bank of Italy and Consob without delay of any act or fact it comes to know of in the performance of its duties that may constitute a management irregularity or a violation of the provisions governing the activity of Italian investment companies, asset management companies and SICAVs. To this end the Articles of Association of Italian investment companies, asset management companies and SICAVs, independently of the system of management and control adopted, shall assign the related tasks and powers to the control body.69
4. The independent statutory auditors of Italian investment companies, asset management companies and SICAVs shall notify the Bank of Italy and Consob without delay of the acts or facts found in the performance of the engagement that may constitute a serious violation of the provisions governing the activity of the audited companies, jeopardize the continued existence of the undertaking or result in an adverse opinion or a qualified opinion on the annual accounts or interim statements of collective investment undertakings or a disclaimer70 .
5. Subsection 3, first sentence, and subsection 4 shall also apply to the control body and independent statutory auditors of the companies that control or are controlled by Italian investment companies, asset management companies and SICAVs pursuant to Article 23 of the Consolidated Law on Banking71 .
5-bis. Consob, to the extent of its duties, may exercise the powers pursuant to Article 187-octies upon authorised persons. The Bank of Italy, to the extent of its duties, may exercise the powers pursuant to Article 187-octies, subsection 3, paragraph c) upon authorised persons72 .
6. Subsections 3, 4, 5, and 5-bis shall apply to banks, limited to the provision of investment services and activities73 .
Article 9
(Statutory audit)
1. For Italian investment companies, asset management companies and SICAVs, article 159 subsection 1 shall apply.
2. For asset management companies, the statutory auditor or the independent statutory auditor shall issue a special report expressing an opinion on the financial statements of the mutual fund74 .
Article 10
Inspections
1. The Bank of Italy and Consob, to the extent of their duties, may carry out inspections of authorised intermediaries75 and require the exhibition of documents and the adoption of measures deemed necessary, in harmony with the provisions of Community law76 .
1-bis. Consob may request that the independent statutory auditor performs audits. Related expenses, the fairness of which is evaluated by Consob, are borne by the person inspected77.
2. Each authority shall notify the inspections it undertakes to the other, which may request it to carry out on the-spot verifications of matters within the scope of its authority.
3. The Bank of Italy and Consob may request the competent authorities of another EU country to carry out on-the spot verifications of branches of Italian investment companies, asset management companies and banks established within the territory of such state or agree on other methods of verification.78
4. The competent authorities of another EU country, after notifying the Bank of Italy and Consob, may, directly or by way of persons engaged by them, inspect the branches established in Italy of EU investment companies, banks and harmonised asset management companies which they have authorised. Where the competent authorities of another EU country so request, the Bank of Italy and Consob, within the scope of their respective authority, may carry out on-the-spot verifications directly or agree on other methods of verification.79
5. The Bank of Italy and Consob, to the extent of their duties, may conclude agreements with the competent authorities of non-EU countries on procedures for the inspection of branches of investment companies and banks established in their respective territories80 .
Article 11
Composition of groups
1. The Bank of Italy, after consulting Consob:
a) shall determine the notion of group relevant for the purpose of verifying the requirements provided for in Articles l9(1)(h) and 34(1)(f)81 ;
b) may issue rules for identifying the set of persons to be subjected to group supervision from among those providing investment services and collective portfolio management services as well as related and instrumental activities or other financial activities, as defined in Article 59(1)(b) of the Consolidated Law on Banking. Such persons shall be identified from among those not subject to consolidated supervision under the Consolidated Law on Banking that:
1) are directly or indirectly controlled by an Italian investment company or asset management company;
2) directly or indirectly control an Italian investment company or asset management company82 ;
1-bis. The group identified pursuant to subsection 1, paragraph b), is registered in a special register held by the Bank of Italy. The parent company shall immediately inform the Bank of Italy of the existence of the group and its updated composition. A copy of the aforementioned notification is forwarded by the Bank of Italy to Consob83 .
Article 12
Supervision of groups
1. The Bank of Italy may issue rules to the Italian investment company or asset management company or financial company heading the group identified in accordance with Article 11(1)(b) referring to all the persons identified under the same article and regarding the matters referred to in Article 6(1)(a), 1-bis and 2-bis, paragraphs a), b), c) and g). Where reasons of stability require, the Bank of Italy may issue specific rules regarding the same matters84 .
1-bis. In line with EU regulations, the Bank of Italy shall identify options for exemption from the application of provisions adopted pursuant to subsection 185 .
2. The Italian investment company or asset management company or financial company that is the group's parent undertaking, in performing its activity of direction and coordination, shall issue rules to the components of the group identified in accordance with Article 11(1)(b) for carrying out instructions issued by the Bank of Italy. The directors of the companies belonging to the group shall supply all the data and information needed for the issue of such rules and shall cooperate in complying with the provisions on consolidated supervision86 .
3. The Bank of Italy and Consob, within the scope of their respective authority, may require persons identified in accordance with Article 11(1)(b) to transmit reports, data and any other relevant information on a periodic or other basis. Information needed to carry out supervision may also be required of persons that, while not engaging in investment services, collective portfolio management services, related and instrumental activities or other financial activities, are linked to the Italian investment company or asset management company by the shareholding relationships specified in Article 11(1)(b)87 .
3-bis. In the exercise of supervisory activities on a consolidated basis, the Bank of Italy may issue provisions, pursuant to this Article, with regard to all persons included in the group identified pursuant to Article 11, subsection 1, paragraph b)88 .
4. ...omissis...89
5. The Bank of Italy and Consob, to the extent of their duties, may:
a) carry out inspections of persons identified under Article 11(1)
b) exclusively for the purpose of verifying the exactness of the data and information provided, carry out inspections of persons that, while not engaging in investment services, collective portfolio management services, related and instrumental activities or other financial activities, are linked to the Italian investment company or asset management company by the shareholding relationships specified in Article 11(1)(b)90 .
5-bis. In the exercise of supervisory activities on a consolidated basis, the Bank of Italy may issue provisions, pursuant to article 7, subsection 2 with regard to persons pursuant to Article 11, subsection 1, paragraph b)91 .
Chapter II
Corporate officers and shareholders
Article 13
Experience, integrity and independence requirements for corporate officers92
1. Persons performing administrative, management and supervisory functions in Italian investment companies, asset management companies or SICAVs shall fulfil the experience, integrity and independence requirements established by the Minister of the Economy and Finance in a regulation adopted after consulting the Bank of Italy and Consob93 .
2. Failure to fulfil the requirements shall result in disqualification from office. The disqualification shall be declared by the board of directors, the supervisory board or the management board within thirty days of the appointment or of its learning of subsequent failure.94
3. In the event of inaction by the board of directors the disqualification shall be declared by the Bank of Italy or Consob.
3-bis. In the event of failure to fulfil the independence requirements established by the Civil Code or the Articles of Association, subsections 2 and 3 shall apply.95
4. The regulation referred to in subsection 1 shall establish the grounds for temporary suspension from office and its duration. The suspension shall be declared in the manner established in subsections 2 and 3.
Article 1496
Integrity requirements
1. The Minister of the Economy and Finance shall establish the integrity requirements for holders of the investments indicated in article 15, subsection 1, Italian investment companies and asset management companies and for holders of SICAV capital in a regulation adopted after consulting the Bank of Italy and Consob97 .
2. For the purpose of application of this article and Article 15, for SICAVs reference is made only to registered shares, and the regulation indicated in subsection 1 establishes cases in which, for the purpose of voting rights assignment, such shares are considered bearer shares with regard to the purchase date98.
3. For the purposes of subsection 1 shareholdings held through subsidiaries, trusts or nominees shall also be considered, together with cases in which the attached voting rights are exercisable by or attributed to a person other than the investor or agreements exist concerning exercise of the voting rights99 .
4. Where the requirements are not met, voting and other rights that might influence the company cannot be exercised if the shareholdings exceedthe thresholds envisaged in Article 15, subsection 1100 .
5. In the event of non-compliance with the prohibition, any resolution or other act adopted where the votes or other contribution of the shareholdings referred to in subsection 1 were decisive may be challenged under the Civil Code. The shareholdings for which voting rights may not be exercised shall be counted for the purpose of establishing the due constitution of the meeting.
6. The challenge may also be initiated by Consob or the Bank of Italy within one hundred and eighty days of the date of the resolution or, where this has to be entered in the Company Register, within one hundred and eighty days of the date of such entry or, where it only has to be filed with the office of the Company Register, within one hundred and eighty days of the date of such filing.
7. Shareholdings exceeding the thresholds specified in Article 15, subsection 1, of persons failing to meet the integrity requirements must be disposed of within the time limits established by the Bank of Italy or Consob101 .
Article 15
(Investments)102
1. Any person who for any reason intends to directly or indirectly acquire or dispose of a controlling investment or an investment that could have a significant influence in an Italian investment company, asset management company or SICAV, or an investment that assigns a share of voting rights or capital of at least 10 per cent, taking into account the shares or units already owned, must notify the Bank of Italy in advance. Advance notice must also be given for changes in investments when the share of voting rights or capital reaches or exceeds, upwards or downwards, 20 per cent, 30 per cent or 50 per cent, and in any event when changes result in the acquisition or loss of control of the company103 .
2. Within the time limit established pursuant to subsection 5, paragraph c), the Bank of Italy may forbid acquisition of the investment where it considers that the conditions are not met for guaranteeing sound and prudent management by the intermediary, assessing the quality of the potential buyer and financial soundness of the acquisition plan according to the following criteria: the reputation of the potential buyer, including possession of the requirements envisaged in Article 14; possession of the requirements pursuant to Article 13 by persons who, following the acquisition, will have director, management or control duties; the financial soundness of the potential buyer; the post-acquisition capacity of the intermediary to comply with regulations governing intermediary activities; the suitability of the group structure of the potential buyer to allow effective supervision; the absence of grounds to suspect that the acquisition is associated with money laundering or terrorist financing. The Bank of Italy may establish a time limit for the acquisition and, even before that time limit expires, may issue approval for the transaction104 .
3. Acquisitions and disposals referred to in subsection 1 shall be notified upon completion to the Bank of Italy, Consob and the company 105 .
4. Holdings are considered to be acquired or disposed of indirectly where the acquisition or the disposal is effected through subsidiary companies, trust companies or nominees. Control shall exist in the cases defined in Article 23 of the Consolidated Law on Banking.
5. By a regulation, the Bank of Italy shall establish:
a) the calculation criteria for voting rights for application of the thresholds envisaged in subsection 1, including cases in which voting rights are not calculated for the purpose of that subsection, together with criteria to identify cases of significant influence;
b) the persons required to give notice where voting rights attached to holdings are exercisable by or attributed to a person other than the owner of the holdings and where agreements exist concerning the exercise of voting rights;
c) the notification procedures and time limits, and for completion of the assessment procedures envisaged in subsection 2106 .
Article 16
Suspension of voting rights, obligation to dispose of shareholdings107
1. The voting and other rights making it possible to influence the company attached to the shareholdings exceeding the thresholds established under Article 15(5) may not be exercised where the notices referred to in Articles 15(1) and 15(3) have not been given, where the Bank of Italy has prohibited the acquisition or the time limit within which the Bank of Italy may prohibit the acquisition has not expired or where the time limit established under Article 15(2), if any, has expired.108
2. The Bank of Italy, acting on its own initiative or on a proposal from Consob, may suspend the voting and other rights making it possible to influence the company attached to a qualifying shareholding in an Italian investment company or asset management company or a SICAV where the influence exercised by the holder of such voting rights is likely to be prejudicial to the company's sound and prudent management or effective supervision.109
3. In the event of non-compliance with the prohibitions referred to in the preceding subsections, Articles 14(5) and 14(6) shall apply.
4. The Bank of Italy may fix a time limit for the disposal of shareholdings exceeding the limits established under Article 15(5) when the prior notice referred to in Article 15(1) has not been given or when, pursuant to Article 15(2), the Bank of Italy has prohibited an acquisition or any time limit it established for the acquisition has expired.110
Article 17
Requests for information on shareholdings
1. The Bank of Italy and Consob, specifying the time limit for the response, may require:
a) Italian investment companies, asset management companies and SICAVs to provide the names of the owners of shareholdings on the basis of the register of shareholders, notifications received or other information available to them;
b) companies and entities of whatsoever nature which own shareholdings in the companies referred to in paragraph a) to provide the names of the owners of the shareholdings on the basis of the register of shareholders, notifications received or other information available to them;
c) the directors of companies and entities which own shareholdings in Italian investment companies or asset management companies or SICAVs to provide the names of their controllers;
d) trust companies which hold shareholdings in companies referred to in paragraph c) in their own names to provide the identification data of the beneficiaries.111
TITLE II
INVESTMENT SERVICES112
Chapter I
Persons and authorisation
Article 18
Persons
1. The provision of investment services and activities to the public on a professional basis shall be reserved to investment companies and banks113 .
2. Asset management companies may provide the services referred to in Article 1(5)(d) and (f) to the public on a professional basis. Harmonised asset management companies may provide the services referred to in Article 1(5)(d) and (f) to the public on a professional basis, provided they are authorised to do so in their EU home country.114
3. Financial intermediaries entered in the register referred to in Article 107 of the Consolidated Law on Banking may provide the services referred to in Article 1(5)(a) and (b) exclusively for derivative financial instruments, and in Article 1(5)(c) and (c-bis) to the public on a professional basis in the circumstances and subject to the conditions established by the Bank of Italy after consulting Consob.115
3-bis. The regulated stock exchange company may be authorised for the activity pursuant to Article 1, subsection 5, paragraph g)116 .
4. Italian investment companies may provide non-core services and other financial activities as well as related and instrumental activities to the public on a professional basis. Reservations of such activities established by law shall be unaffected.
5. The Minister of the Economy and Finance,117 in a regulation adopted after consulting the Bank of Italy and Consob:
a) for the purpose of tracking the development of financial markets and the standards of adaptation of EU authorities, new categories of financial instruments, new investment services and activities and new accessory services, indicating which persons subject to certain forms of prudential supervision may exercise the new services and operations118119 ;
b) shall adopt the rules implementing and integrating the reservations of activities provided for in this article, in compliance with the provisions of Community law120 .
Article 18-bis
(Financial advisors)
1. The reservation of activities pursuant to Article 18 shall not prejudice the opportunity for natural persons in possession of the requirements of professionalism, integrity, independence and equity established by regulation adopted by the Minister of the Economy and Finance, after consulting the Bank of Italy and Consob, and entered on the register pursuant to subsection 2, to provide advisory services on investment matters, without holding sums of money or financial instruments pertaining to customers. The professionalism requirements for entry in the register shall be ascertained on the basis of strict evaluation criteria that take into account duly documented past professional experience or on the basis of evaluation tests.
2. In compliance with the provisions of subsection 7, a register of financial advisors who are natural persons has been set up and envisages a body comprising a chairman and four members, two of which representing the persons registered and appointed according to methods established in the entity’s articles of association, and all nominated by decree of the Ministry of Economy and Finance. The members of said body shall be identified from among persons of proven professionalism and expertise in financial, legal and economic matters.
3. The body pursuant to subsection 2 above shall be of a legal nature and have organisational and financial independence.
4. The body shall prepare its articles of association containing rules on operations and the internal organisation, in accordance with the principles and criteria established by Consob in the Regulation adopted pursuant to subsection 7 and by the Ministry of Economy and Finance adopted pursuant to subsection 1. The articles of association must be submitted to the Ministry of Economy and Finance for approval, after consulting the Bank of Italy and Consob, and subsequent publication.
5. Within the scope of its financial independence, the body shall determine and collect fees and other sums payable by members from registration applications and persons submitting application as candidates for the evaluation test to ascertain possession of the professionalism requirements for entry in the register, by the amount necessary to guarantee continued performance of its duties. The order issued by the body to claim payment of such fees shall be deemed executive. On expiry of the payment deadline, the body shall levy sums due on the basis of regulations for the official collection of national taxes, and amounts due to local, public and welfare authorities. In the event of failure to pay such fees, the body shall arrange cancellation of the person in default from the register.
6. The body pursuant to subsection 2:
a) subject to verification of the necessary requirements, shall arrange entry in the register of natural persons submitting due application to provide the services indicated in subsection 1, and arrange cancellation should such requirements be no longer met;
b) shall supervise compliance with the provisions of paragraphs c), d), e) and g) of subsection 7;
c) in cases of infringement of the rules of conduct pursuant to subsection 7, paragraph d), after consulting the interested party, shall in relation to the seriousness of the infringement and in compliance with the provisions of subsection 7, paragraph b), decide to issue of a written reprimand, order payment of a fine of between five hundred euro and twenty-five thousand euro, order a 1-4 month suspension from the register or order disqualification from the register;
d) shall take all other action necessary for the proper keeping of the register;
e) may request registered persons to communicate data and information, and forward documents and papers according to terms and conditions decided by the body;
f) may perform inspections of registered persons, or request sight of documents and completion of any papers deemed necessary, also through personal hearings.
7. By regulation, Consob shall determine the principles and criteria relating to:
a) setup of the register and related forms of advertising;
b) entry in the register, reasons for suspension, disqualification and readmission, and measures applying to persons registered;
c) grounds for incompatibility;
d) the rules of conduct to be followed by persons registered in their relations with customers, with due regard to the provisions to which licensed parties are subject;
e) the storage methods for documents concerning activities performed by persons registered;
f) the activities of the body, with specific reference to the duties referred to in subsection 6;
g) the professional training of persons registered.
8. Should an adverse decision be issued pursuant to subsection 6, paragraph c), the interested party may submit appeal to Consob within thirty days of the date of the related notice. The submission of an appeal and the related decision shall follow procedures determined by Consob by regulation pursuant to subsection 7.
9. Should Consob adopt an adverse decision pursuant to subsection 8, the interested party may file appeal before the Court of Appeal. Subsections 4, 5, 6, 7 and 8 of Article 195 shall apply.
10. Consob may request that the body communicate data and information, and forward documents and papers according to terms and conditions decided by Consob; Consob may perform inspections of the body, or request sight of documents and completion of any papers deemed necessary.
11. In the event of inactivity or malfunction of the body, Consob shall submit a justified proposal to the Ministry of the Economy and Finance for the adoption of suitable measures or, for more serious cases, to wind up the body and appoint a commissioner121 .
Article 18-ter
Financial consulting companies
1. With effect from 1 October 2009, the reservation of activities pursuant to Article 18 shall not prejudice the opportunity for public limited companies or private limited companies in possession of the requirements of equity and independence established by regulation adopted by the Minister of the Economy and Finance, after consulting the Bank of Italy and Consob, to offer consultancy services on investment matters, without holding sums of money or financial instruments pertaining to customers.
2. After consulting the Bank of Italy and Consob, the Minister of the Economy and Finance may also require that the company officers be in possession of the requirements of professionalism, integrity and independence.
3. In the register pursuant to article 18-bis, subsection 2, a special section is dedicated to financial consulting companies for which subsections 3, 4, 5, 6, 7 and 8 of article 18-bis shall apply122 .
Article 19
Authorisation
1. Consob, after consulting the Bank of Italy, shall authorise investment companies to provide investment services and activities, within six months from the presentation of the complete application, where the following conditions are satisfied123 :
a) the legal form adopted is that of a società per azioni;
b) the name of the company contains the words "società di intermediazione mobiliare";
c) the registered office and the head office of the company are in Italy;
d) the paid-up capital is not less than that established on a general basis by the Bank of Italy124 ;
e) a programme relating to initial operations is submitted, together with the instrument of incorporation and articles of association, including an illustration of the types of operations envisaged, the procedures adopted and the type of accessory services intended for offer, together with a report on the organisational structure, including an illustration of any outsourcing to third parties of essential operating functions125;
f) the persons performing administrative, management and supervisory functions fulfil the experience, independence and integrity requirements referred to in Article 13;126
g) holders of investments indicated in Article 15, subsection 1 are in possession of the integrity requirements established in Article 14 and there are no grounds for prohibition pursuant to Article 15, subsection 2127;
h) the structure of the group of which the company is part is not prejudicial to the effective supervision of the company and at least the information required pursuant to Article 15(5) is provided.
2. Authorisation shall be refused where verification of the conditions indicated in subsection 1 shows that sound and prudent management is not ensured and the ability of the company to exercise investment services or activities correctly is ensured.128 .
3. The Bank of Italy, after consulting Consob, shall regulate the authorisation procedure and the cases in which authorisation shall lapse where the Italian management company fails to start or interrupts the provision of services authorised.129
3-bis. Investment companies shall inform Consob and the Bank of Italy of any significant change, after authorisation, to the conditions pursuant to subsection 1130.
4. The Bank of Italy, after consulting Consob on activities pursuant to Article 1, subsection 5, paragraph g), shall authorise the provision of investment services and activities by banks authorised in Italy, as well as services and activities indicated in Article 18, subsection 3, by financial intermediaries registered in the list pursuant to Article 107 of the Consolidated Law on Banking131.
Article 20
Register
1. Consob shall enter Italian investment companies and non-EU investment companies in a special register. EU investment companies shall be entered in a special list annexed to the register132 .
2. Consob shall communicate entries in the register to the Bank of Italy.
3. The persons referred to in subsection 1 shall indicate the details of the entry in the register or list in their documents and correspondence.
Chapter II
Performance of services133
Article 21
General criteria
1. In providing investment and non-core services and activities, authorised intermediaries must:
a) act diligently, fairly and transparently in the interests of customers and the integrity of the market.
b) acquire the necessary information from customers and operate in such a way that they are always adequately informed;
c) use publicity and promotional communications which are correct, clear and not misleading,
d) have resources and procedures, including internal control mechanisms, suitable for ensuring the efficient provision of services and activities134 ;
1-bis. In the provision of investment services and activities and accessory services, Italian investment companies, non-EU investment companies, asset management companies, harmonised asset management companies, financial intermediaries registered in the list pursuant to Article 107 of the Consolidated Law on Banking, Italian banks and non-EU banks:
a) shall adopt all reasonable measures to identify and manage conflict of interest which may arise with the customer or between customers, also by the adoption of appropriate organisational measures, in order to avoid a negative impact on the interests of the customer;
b) shall clearly inform customers, prior to acting on their behalf, of the general nature and/or sources of conflict of interest where measures taken pursuant to paragraph a) are not sufficient to ensure, with reasonable certainty, that the risk of damaging the interests of the customer is avoided;
c) shall perform independent, sound and prudent management and take measures to safeguard the rights of customers with regard to their assets135 .
2. In performing services, investment companies, banks and asset management companies may, subject to their obtaining customers' consent in writing, act in their own names and on behalf of their customers.
Article 22
Separation of assets
1. In providing investment and non-core services, the financial instruments and funds of individual customers held in whatever capacity by an Italian investment company, asset management company, harmonised asset management company or financial intermediary entered in the register provided for in Article 107 of the Consolidated Law on Banking and the financial instruments of individual customers held in whatever capacity by a bank shall be separate assets for all intents and purposes from those of the intermediary and from those of other customers. Actions in respect of such assets may not be brought by creditors of the intermediary or on behalf of such creditors, nor by creditors of the depositary or the sub-depositary, if any, or on behalf of such creditors. Creditors of individual customers may bring actions up to the amount of the assets owned by such customers.136
2. Legal and court-ordered set-off shall not apply to accounts referring to financial instruments or funds deposited with third parties and agreements may not be made for their set-off against claims of the depositary or the sub-depositary on the intermediary or the depositary.
3. Unless customers have agreed in writing, an investment company, Italian asset management company, harmonised asset management company or financial intermediary entered in the register provided for in Article 107 of the Consolidated Law on Banking or a bank may not use, on its own behalf or on behalf of third parties, financial instruments belonging to customers which it holds in any capacity. Nor may an investment company, Italian asset management company, harmonised asset management company or financial intermediary entered in the register provided for in Article 107 of the Consolidated Law on Banking use, on its own behalf or on behalf of third parties, liquid balances belonging to customers which it holds in any capacity.137
Article 23138
Contracts
1. Contracts for the provision of investment and non-core services, except for the service set forth in Article 5 (f), and, if foreseen, the provision of accessory services, shall be reduced to writing and a copy given to customers. Consob, after consulting the Bank of Italy, may issue a regulation establishing that, for justified technical reasons or in relation to the professional nature of the contracting parties, certain types of contract may or must be concluded in a different form. Failure to comply with the prescribed form shall render the contract null and void139 .
2. Any clause which refers to usage for the determination of the fee payable by customers or any other amount charged to them shall be null. In such cases, nothing shall be payable.
3. In cases referred to in subsections 1 and 2, nullity may be enforced only by the customer.
4. Title IV, Chapter I, of the Consolidated Law on Banking, shall not apply to investment services and activities, to the allocation of financial products as well as to transactions and services which are components of financial products subject to the regulations of Article 25-bis or of part lV, title ll, chapter I. In any case, the pertinent provisions of title Vl of the Consolidated Law on Banking are applied to transactions regarding consumer credit.140
5. Within the scope of the provision of investment services and activities, Article 1933 of the Civil Code shall not apply to derivative financial instruments or to similar instruments specified pursuant to Article 18(5)(a)141 .
6. In actions for damages in respect of injury caused to the customer in the performance of investment services or non-core services, the burden of proof of having acted with the due diligence required shall be on the authorised intermediaries.
Article 24
Management of investment portfolios142
1. The following regulations shall be applied to portfolio management:
a) the customer may issue binding instructions with regard to transactions to be performed;
b) the customer may withdraw from the contract at any time, without prejudice to the right of withdrawal by the investment company, asset management company or bank pursuant to Article 1727 of the Civil Code;
c) the power to exercise voting rights in relation to financial instruments under management may be conferred upon an investment company, bank or asset management company by means of proxy granted in writing for each shareholder’s meeting in observance of the limits and procedures established by regulation by the Minister of the Economy and Finance, after consulting the Bank of Italy and Consob143 .
2. Agreements in conflict with the provisions of this article shall be null and void, nullity may be enforced only by the customer.
Article 25
Trading on regulated markets
1. Investment companies and Italian banks authorised to provide the services of dealing for own account and execution of orders for clients may operate in Italian regulated markets, in EU markets and in non-EU markets recognized by Consob pursuant to Article 67. EU and non-EU investment companies and EU and non-EU banks authorised to provide such services and activities may operate in Italian regulated markets.
2. Persons other than those as indicated in subsection 1 of this Article may access regulated markets, taking into account the regulations adopted by the management company pursuant to Article 62, subsection 2, under the following terms:
a) they satisfy the requirements of integrity and professionalism;
b) they have a sufficient level of trading experience and capacity;
c) they have adequate organisational strategies;
d) they have sufficient resources for the role to be performed.
3. Persons pursuant to subsection 2, permitted to trade on regulated markets, shall adopt conduct using due diligence, correctness and transparency in order to ensure market integrity144 .
Article 25-bis145
Financial products issued by banks and insurance companies
1. Articles 21 and 23 shall apply to the subscription and placement of financial products issued by banks and by insurance companies.146
2. In relation to products referred to in subsection 1 and for the purposes referred to in Article 5(3), Consob shall exercise the regulatory powers and the powers regarding reporting requirements and inspections referred to in Article 6 subsections 2 and 2-bis, paragraphs d), e), i), j), l), m) and n), as well as the powers referred to in Article 7(1)147 .
3. The board of auditors, the supervisory board or the management control committee of insurance companies shall promptly inform Consob of any act or fact it comes to know of in the performance of its duties that may constitute a violation of the rules referred to in this chapter or of general or specific rules laid down by Consob under subsection 2.
4. The independent statutory auditors of insurance companies shall promptly notify Consob of acts or facts they find in the performance of the engagement that may constitute a serious violation of the rules referred to in this chapter or of general or specific rules laid down by Consob under subsection 2148 .
5. Subsections 3 and 4 shall also apply to the internal control bodies of companies and the independent statutory auditors of companies that control insurance companies or are controlled by insurance companies as defined in Article 2359 of the Civil Code149 .
6. Isvap and Consob shall inform each other of the inspections they conduct at insurance companies. Each authority may ask the other to make checks on matters for which it is competent.
Chapter III
Cross-border operations
Article 26
Branches of Italian investment companies and freedom to provide services
1. Italian investment companies may operate:
a) in another EU country, also without establishing branches there, in compliance with the regulation referred to in subsection 2;
b) in a non-EU country, also without establishing branches there, subject to authorisation by the Bank of Italy.
2. The Bank of Italy, after consulting Consob, shall lay down in a regulation:
a) the rules implementing the Community provisions concerning the conditions and procedures to be complied with for Italian investment companies to provide services subject to mutual recognition in other EU countries by establishing branches or under the freedom to provide services;
b) the conditions and procedures for granting authorisation to Italian investment companies to provide services not subject to mutual recognition in other EU countries and services in non-EU countries150 .
3. The existence of cooperation agreements between the Bank of Italy and Consob and the competent authorities of the host country and the opinion of Consob shall in all cases be conditions for the granting of authorisation.
Article 27
EU investment companies
1. For the purpose of providing services subject to mutual recognition, EU investment companies may establish branches in Italy. The establishment of the first branch shall be subject to prior notification to Consob by the competent authority of the home country; the branch shall commence business two months after the notification151 .
2. EU investment companies may provide services subject to mutual recognition in Italy without establishing branches there provided Consob has been informed by the competent authority of the home country152 .
3. Consob, after consulting the Bank of Italy, shall lay down in a regulation the conditions and procedures to be complied with for EU investment companies to provide services subject to mutual recognition in Italy, including those procedures regarding possible requests for Consob to amend the provisions regarding the branches to be established in Italy.153
4. Consob, after consulting the Bank of Italy, shall by regulation establish rules for the authorisation of any activities performed by EU investment companies that are not subject to mutual recognition in Italy154 .
Article 28
Non-EU investment companies
1. The establishment in Italy of the first branch of a non-EU investment company shall be authorised by Consob after consulting the Bank of Italy. The authorisation shall be subject to:
a) satisfaction by the branch of requirements corresponding to those provided for by Articles l9(1)(d), l9(1)(e) and 19(1)(f);
b) authorisation and actual provision in the home country of the investment services and activities. and non-core services which the non-EU investment company intends to provide in Italy155 ;
c) the existence in the home country of provisions concerning authorisation, organisational arrangements and supervision equivalent to those applying to Italian investment companies in Italy;
d) the existence of cooperation agreements between the Bank of Italy and Consob and the competent authorities of the home country;
e) the fulfilment of conditions of reciprocity in the home country within the limits permitted by international agreements.
2. Consob, after consulting the Bank of Italy, shall authorise non-EU investment companies to provide investment and non-core services and activities without establishing branches, provided the conditions referred to in subsection 1, paragraphs b)-e), are fulfilled and a programme of the activities to be carried on in Italy is submitted156 .
3. Consob, after consulting the Bank of Italy, may adopt general rules specifying the services and activities non-EU investment companies may not provide in Italy without establishing branches.157
Article 29
Banks
1. Title II, Chapter II, of the Consolidated Law on Banking shall apply to the provision of investment and non-core services and activities in foreign countries by Italian banks and to the provision such services in Italy by foreign banks158 .
Chapter IV
Door-to-door selling
Article 30
Door-to-door selling
1. Door-to-door selling shall mean the promotion and placement with the public of:
a) financial instruments in a place other than the registered office or the establishments of the issuer, the offeror or the person appointed to carry out the promotion or placement;
b) investment services and activities in a place other than the registered office or the establishments of the provider, promoter or seller of the service159 .
2. Services provided to professional customers, identified pursuant to Article 6, subsections 2-quinquies and 2-sexies, shall not constitute door-to-door sales160 .
3. Door-to-door selling of financial instruments may be carried on by:
a) persons authorised to perform the service referred to in Article 1 subsection 5, paragraphs c) and c-bis)161 ;
b) asset management companies, harmonised asset management companies and SICAVs, exclusively for units and shares of collective investment undertakings.162
4. Investment companies, banks, financial intermediaries entered in the special register provided for in Article 107 of the Consolidated Law on Banking, asset management companies and harmonised asset management companies may engage in door-to-door selling of their own investment services and activities. Where such selling involves services and activities provided by other intermediaries, investment companies and banks must be authorised to perform the services referred to in Article l(5)(c) or (c-bis).163
5. Investment companies and banks may engage in door-to-door selling of products, other than financial instruments and investment services and activities, the characteristics of which shall be established in a regulation issued by Consob after consulting the Bank of Italy.164
6. The enforceability of contracts for the placement of financial instruments or the management of individual portfolios concluded outside the registered office or sold using distance marketing techniques pursuant to Article 32 shall be suspended for a period of seven days beginning on the date of subscription by the investor. Within that period the investor may notify his withdrawal from the contract at no expense and without any compensation for the approved person or the authorised person. This possibility shall be mentioned in the forms given to the investor. The same rules shall apply to contract proposals effected outside the registered office or using distance marketing techniques pursuant to Article 32165 .
7. Failure to indicate the right of withdrawal in forms shall result in the nullity of the related contracts, which may be enforced only by the customer.
8. Subsection 6 shall not apply to public offerings of shares with voting rights or other financial instruments permitting such shares to be acquired or subscribed for, provided the shares or financial instruments are traded in regulated markets in Italy or other EU countries.
9. This article shall also apply to financial products different from financial instruments and, restricted to authorised persons, to financial products issued by insurance companies.166
Article 31
Financial salesmen
1. For door-to-door selling, investment companies, asset management companies, harmonised asset management companies, SICAVs, financial intermediaries registered in the list pursuant to Article 107 of the Consolidated Law on Banking and banks shall make use of financial salesmen. Financial salesmen used by EU and non-EU investment companies, harmonised asset management companies, EU and non-EU banks, shall be equivalent, for the purposes of the application of rules of conduct, to a branch established in Italy167 .
2. A financial salesman shall mean a natural person who, as associate agent pursuant to Directive 2004/39/EC, professionally exercises door-to-door selling as an employee, agent or representative. Financial salesman activities shall be performed exclusively in the interests of one person168 .
3. The authorised person conferring the appointment shall be jointly and severally liable for losses caused to third parties by a financial salesman, including cases where such losses are the consequence of a criminal offence resulting in conviction.
4. The single register of financial salesmen, divided into territorial sections, has been set up. A body composed of members of professional associations representing the financial salesmen and licensed persons has been established to keep said register. The body is legally established in the form of an association, with organisational and statutory independence, in compliance with the principle of territorial division of departments and activities. Within the scope of its financial independence, the body shall determine and collect fees and other sums payable by members, by registration applicants and by persons wishing to sit the evaluation test pursuant to subsection 5, by the amount necessary to guarantee continued performance of its duties. The order issued by the body to claim payment of such fees shall be deemed executive. On expiry of the payment deadline, the body shall levy sums due on the basis of regulations for the official collection of national taxes, and amounts due to local, public and welfare authorities. The body shall arrange entry in the register, subject to verification of possession of the necessary requirements, or cancellation from the register in any case contemplated by Consob in the Regulation indicated in subsection 6, paragraph a), and shall take all other action necessary for the proper keeping of the register. The body shall operate in compliance with the provisions and criteria of Consob regulations and under Consob’s supervision169 .
5. The Minister of the Economy and Finance170 shall establish the integrity and experience requirements for entry in the register referred to in subsection 4 in a regulation adopted after consulting Consob. The experience requirements for entry in the register shall be verified on the basis of rigorous evaluation criteria that take account of validly documented previous professional experience or on the basis of examinations.171
6. Consob shall lay down in a regulation the principles and rules concerning:
a) the setting up of the register provided for in subsection 4 and the related forms of publicity;
b) the representative requirements for the professional associations of approved persons and authorised intermediaries;
c) entry in the register provided for in subsection 4 and the grounds for suspension, striking off and readmission;
d) the grounds for incompatibility;
e) the precautionary measures and sanctions governed respectively by Articles 55 and 196 and the violations to which the sanctions provided for in Article 196(1) shall apply;
f) the examination by Consob itself of complaints against the decisions of the body referred to in subsection 4 regarding matters referred to in paragraph c);
g) the rules of presentation and conduct which approved persons must comply with in their dealings with customers;
h) the arrangements for retaining the documentation regarding the activity performed by approved persons;
i) the activity of the body referred to in subsection 4 and the manner of performing supervision by Consob itself;
l) arrangements for the professional updating of approved persons.172
7. Consob may require approved persons and the persons who use approved persons to communicate data and information and to transmit documents and records and establish the related time limits. It may also carry out inspections and require the exhibition of documents and the adoption of measures it deems necessary.
Article 32
Distance marketing of investment services and activities and financial instrument173
1. Distance marketing techniques shall mean techniques of contacting customers, other than advertising, which do not involve the simultaneous physical presence of the customer and the offeror or a person appointed by the offeror.
2. Consob, after consulting the Bank of Italy, may issue a regulation, in conformity with the principles established in Article 30 and in Legislative Decree no. 190 of 19 th August 2005, on the distance marketing of investment services and activities and financial products.174
Chapter IV-bis175
Protection of investors
Article 32-bis
Protection of investors’ collective undertakings
1. Consumer associations entered on the list pursuant to Article 137 of Legislative Decree no. 206 of 6 September 2005 shall be entitled to protect investors’ collective undertakings, relating to the provision of investment services and activities, accessory services and collective asset management services, in the forms pursuant to Article 139 and 140 of the aforementioned Legislative Decree.
Article 32-ter
Out-of-court settlement of disputes
1. For the purposes of out-of-court settlements of disputes between investors and authorised persons and relating to the provision of investment services and activities, accessory services and collective asset management services, the procedures for conciliation and arbitration defined pursuant to Article 27, Law no. 262 of 28 th December 2005 shall apply. Until such procedures are established, Article 41 of Legislative Decree no. 206 of 6th September 2005 shall apply.
TITLE III
COLLECTIVE PORTFOLIO MANAGEMENT
Chapter I
Authorised intermediaries
Article 33
Eligible activities
1. The provision of the service of collective portfolio management shall be reserved to:
a) asset management companies and SICAVs;
b) harmonised asset management companies, exclusively for the activity referred to in Article 1(1)(n), point 2.
2. Asset management companies may:
a) provide portfolio management services176;
b) set up and manage pension funds;
c) perform the related and instrumental activities established by the Bank of Italy after consulting Consob177 ;
d) provide the non-core services referred to in Article 1(6)(a), exclusively for the units of collective investment undertakings they themselves have set up;
e) provide investment consultancy services178 ;
e-bis) market own or third party UCITS units or shares in observance of the rules of conduct established by Consob, after consulting the Bank of Italy179.
3. Asset management companies may entrust specific investment choices to intermediaries authorised to provide asset management services within the framework of asset allocation criteria laid down from time to time by the managers.
4. Asset management companies may delegate specific functions inherent in the provision of the services referred to in subsections 1 and 2 to third parties in ways that avoid turning the company into an empty shell, without prejudice to its responsibility vis-à-vis participants in the fund for the actions of agents.180 .
Chapter II
Investment funds
Article 34
Authorisation of Italian asset management companies
1. The Bank of Italy, after consulting Consob, shall authorise the provision of the service of collective asset management, the service of portfolio management, and investment consultancy services by asset management companies where the following conditions are satisfied181 :
a) the legal form adopted is that of a società per azioni;
b) the registered office and the head office of the company are in Italy;
c) the paid-up capital is not less than that established on a general basis by the Bank of Italy182 ;
d) the persons performing administrative, management and supervisory functions fulfil the experience, independence and integrity requirements referred to in Article 13;183
e) holders of investments indicated in Article 15, subsection 1 are in possession of the integrity requirements established in Article 14 and there are no grounds for prohibition pursuant to Article 15, subsection 2 184 ;
f) the structure of the group of which the company is part is not prejudicial to the effective supervision of the company and at least the information required pursuant to Article 15(5) is provided;
g) a programme of initial operations and a description of the organisational structure have been submitted together with the instrument of incorporation and the Articles of Association;
h) the name of the company contains the words "società di gestione del risparmio".
2. Authorisation shall be denied where verification of the conditions indicated in subsection 1 shows that sound and prudent management is not ensured.
3. The Bank of Italy, after consulting Consob, shall regulate the authorisation procedure and the cases in which authorisation shall lapse where the Italian management company fails to start or interrupts the provision of services authorised185 .
4. The Bank of Italy, after consulting Consob, shall authorise the merger or division of Italian asset management companies186 .
Article 35
Register
1. Asset management companies shall be entered in a special register kept by the Bank of Italy. Harmonised asset management companies that have sent the communications referred to in Article 41-bis shall be entered in a list annexed to the register.187
2. The Bank of Italy shall communicate entries in the register referred to in subsection 1 to Consob.188
3. The persons referred to in subsection 1 shall indicate the details of the entry in the register in their documents and correspondence.
Article 36
Investment funds
1. Investment funds shall be managed by the originating asset management companies or by other asset management companies. The latter may manage both their own established funds and funds established by other companies.
2. Custody of the financial instruments and cash of investment funds shall be entrusted to a depositary bank.
3. Minimum investments in an investment fund shall be regulated by the fund regulation. The Bank of Italy, after consulting Consob, shall establish the general criteria for the drafting of fund regulations and their minimum content, in addition to the provisions of Article 39189.
4. In performing their respective functions, the promoter, the manager and the depositary bank shall act independently and in the interests of the unit-holders.
5. The promoter and the manager shall jointly and severally assume the obligations and responsibilities of agent vis-à-vis the unit-holders.
6. Each investment fund and each sub-fund shall constitute an independent pool of assets, separate to all intents and purposes from the assets of the Italian management company and from those of each unit-holder, as well as from any other assets managed by the same company; commitments relating to bonds subscribed on its own account shall be met solely from the investment fund’s own equity. Such assets may not be admitted in legal actions brought by creditors of the Italian management company or in its interest or in actions brought by creditors of the depositary or the sub-depositary or in their interest. Actions brought by the creditors of individual investors shall be admitted only with respect to the latter's units. In no case may the Italian management company use the assets belonging to the funds it manages in its own interest or in the interest of third parties189-bis.
7. The Bank of Italy, after consulting Consob, shall issue a regulation on the procedures for investment fund mergers190 .
8. Investment fund units shall be represented by registered or bearer certificates, at the choice of the investor. The Bank of Italy, after consulting Consob, may establish on a general basis the characteristics of certificates and the initial face value of units.191
Article 37
Structure of investment funds
1. The Minister of the Economy and Finance192 shall establish, in a regulation adopted after consulting the Bank of Italy and Consob, the general criteria investment funds must observe as regards:
a) the object of the investment;
b) the categories of investor targeted,
c) the manner of participating in open- and closed-end funds, with special reference to the frequency of the issue and redemption of units, the minimum subscription, if any, and the procedures to be followed;
d) the minimum or maximum duration, if any;
d-bis) the terms and conditions for the purchase or transfer of assets, both when funds are first set up and thereafter, for funds investing exclusively or prevalently in real estate, property rights and investments in real estate companies193194 ;
2. The regulation referred to in subsection 1 shall also establish:
a) the circumstances in which funds must be of the closed-end type;
b) the precautions to be taken, with special reference to the intervention of independent experts in the assessment of assets, in the case of the sale or contribution of assets to a closed-end fund by shareholders of the management company or by companies belonging to the same group as the management company, with the establishment of a percentage limit with respect to funds' total assets, and in the case of the sale of fund assets to such persons;195
b-bis) the cases in which it is possible to waive the prudential rules for limiting and spreading risk established by the Bank of Italy, having regard, inter alia, to the nature and professional experience of investors, the final sentence of article 36 subsection 3, subsection 7, and article 39 subsection 3, shall not apply to such funds; in the case of funds referred to in subsection 1, paragraph d-bis), provision must be made for such funds to be able to take out loans up to at least 60 per cent of the value of real estate, property rights with respect to real estate and shares of property companies and up to 20 per cent for other assets and to take steps to enhance the value of such assets196;
c) the accounting records, the report on operations and the periodic statements that asset management companies are required to prepare, in addition to what is prescribed for commercial undertakings, and the obligations concerning the diffusion of the report on operations and the periodic statements;
d) the circumstances in which an Italian management company must apply for the admission to trading in a regulated market of the certificates representing fund units; e) the requirements and fees for the independent experts referred to in point 5 of Article 6(1)(c).
e) the requirements and fees of independent experts indicated in Article 6, subsection 1, paragraph c), subparagraph 5).
2-bis. The regulation referred to in subsection 1 shall also identify the matters for which meetings of participants in closed-end funds shall be called to adopt resolutions that are binding on the Italian management company. Such meetings shall in any case be called to vote on the replacement of the Italian management company, admission to listing where this is not provided for and changes to the investment policy. Meetings shall be called by the board of directors of the Italian management company, inter alia at the request of participants representing at least 10 per cent of the value of the units in circulation, and resolutions shall be adopted with the favourable vote of at least 50 per cent plus one of the units represented in the meeting. In no case may the quorum be less than 30 per cent of the value of all the units in circulation. The resolutions adopted by meetings shall be submitted to the Bank of Italy for its approval. They shall be deemed to be approved where four months elapse from their submission without the adoption of a measure rejecting them. Articles 46(2) and 46(3) shall apply to meetings of participants for matters not governed by this provision or the regulation referred to in subsection 1.197
Article 38
Depositary bank
1. In performing its functions, a depositary bank shall:
a) verify the legitimacy of the operations of issuing and redeeming units and the application of fund income;198
a-bis) verify the correctness of the calculation of the value of the fund's units or, if appointed to do so by the Italian management company, make the calculation itself;199
b) verify that in transactions involving a fund's assets any consideration is remitted to it within the customary time limits;
c) carry out the instructions of the Italian management company unless they conflict with the law, the fund rules or the prescriptions of the supervisory authorities.
2. The depositary bank shall be liable to the Italian management company and unit-holders for any loss suffered by them as a result of its failure to perform its obligations.
3. The Bank of Italy, after consulting Consob, shall establish the conditions for accepting appointment as depositary bank and the procedures for subdepositing fund assets200 .
4. The directors and members of the board of auditors of the depositary bank shall promptly inform the Bank of Italy and Consob, within the scope of their respective authority, of irregularities they discover in the management of the Italian management company and in the management of investment funds.
Article 39
Fund rules
1. The rules of each investment fund shall specify the characteristics of the fund, regulate its operation, indicate the promoter, the manager, if different from the promoter, and the depositary bank, specify the division of tasks between such persons, and regulate the relationships between such persons and unit-holders.
2. In particular, the fund rules shall establish:
a) the name and duration of the fund;
b) the manner of participating in the fund, the time limits and procedures for the issue and cancellation of certificates and for the subscription and redemption of units, as well as the procedures for winding up the fund;
c) the bodies responsible for the selection of investments and the criteria for the apportionment of investments;
d) the types of goods, financial instruments and other assets in which the fund's assets may be invested;
e) the methods for determining the fund's operating income and profits and, where appropriate, the manner in which the latter are allocated and distributed;
f) details of the expenses to be borne by the fund and those to be borne by the Italian management company;
g) the amount of, or the methods for determining, the commissions due to the Italian management company and the charges to be borne by unit-holders;
h) the manner of making public the value of units.
3. The Bank of Italy shall approve the fund rules and amendments thereto, assessing in particular their completeness and compatibility with the general criteria established pursuant to Articles 36 and 37.201
3-bis. The Bank of Italy shall specify the cases in which, on the basis of the subject of the investment, the category of investor or the fund's operating rules, the fund rules and amendments thereto shall be deemed to be approved on a general basis. In the other cases the rules shall be deemed to be approved where three months elapse from their submission without the Bank of Italy adopting a measure rejecting them.202
Article 40
Rules of conduct and voting rights
1. Asset management companies must:
a) operate diligently, correctly and transparently in the interests of the unit-holders and the integrity of the market;
b) organise themselves in such a way as to minimize the risk of conflicts of interest, including conflicts between the pools of assets under management and, where a conflict of interest exists, act in such a way as to ensure the fair treatment of the collective investment undertakings;
c) adopt measures to protect the rights of the unit-holders and have sufficient resources and suitable procedures for the efficient provision of services.203
2. Asset management companies shall exercise, in the interests of the unit-holders, the voting rights attached to the financial instruments belonging to the funds under management, except as provided for otherwise by law.
3. Where the manager is different from the promoter, the exercise of voting rights provided for in the previous subsection shall pertain to the manager, unless agreed otherwise.
Chapter II-bis
Operations abroad204
Article 41205
Italian asset management companies' operations abroad
1. Italian asset management companies may operate, also without establishing branches:
a) in another EU country, in compliance with the regulation referred to in subsection 2;
b) in a non-EU country, subject to authorisation by the Bank of Italy.
2. The Bank of Italy, after consulting Consob, shall lay down in a regulation:
a) the rules implementing the Community provisions concerning the conditions and procedures to be complied with for asset management companies to provide in other EU countries the services they are authorised to provide under Community law;
b) the conditions and procedures for granting authorisation to asset management companies for the provision of authorised services in non-EU countries206 .
3. The granting of the authorisation referred to in subsection 2, paragraph b) shall be subject to the existence of cooperation agreements between the Bank of Italy and Consob and the competent authorities of the host country.
Article 41-bis207
Harmonised asset management companies
1. In order to carry on the activities they are authorised to engage in under Community law, harmonised asset management companies may establish branches in Italy. The establishment of the first branch shall be preceded by a communication to the Bank of Italy and Consob from the competent home country authority. The branch shall start operating when two months have elapsed from such communication.
2. Except as provided for in Article 42, harmonised asset management companies may engage in Italy in the activities they are authorised to perform under Community law without establishing branches, provided the Bank of Italy and Consob are informed by the competent home country authority.
3. The Bank of Italy, after consulting Consob, shall issue a regulation on the conditions and procedures harmonised asset management companies must comply with in order to carry on in Italy the activities referred to in subsections 1 and 2 by establishing branches or under the freedom to provide services.
4. Harmonised asset management companies that engage in Italy in the activities referred to in subsection 3 are required to comply with the rules of conduct provided for in Article 40.
Article 42
The marketing in Italy of the units of harmonised and non-harmonised investment funds
1. The marketing in Italy of the units of EU investment funds falling within the scope of the directives on collective investment undertakings must be notified in advance to the Bank of Italy and Consob; marketing may begin after two months have elapsed from the notification.
2. The Bank of Italy, after consulting Consob, shall lay down in a regulation:
a) rules implementing the provisions of Community law on the procedures to be observed in the application of subsection 1;
b) rules on the organisational model to be adopted with a view to ensuring the exercise of investors’ ownership rights in Italy208 .
3. Consob, after consulting the Bank of Italy, shall lay down in a regulation:
a) the information to be provided to the public on the marketing of units in Italy;
b) the manner in which the issue, sale, repurchase or redemption price of units must be made public.209
4. The Bank of Italy and Consob may, to the extent of their respective duties, require issuers and the persons marketing the units referred to in subsection 1 to provide data and information, also on a periodic basis, and to transmit records and documents210 .
5. The marketing in Italy of the units of investment funds not falling within the scope of the directives on collective investment undertakings shall be authorised by the Bank of Italy, after consulting Consob, provided the operating arrangements are compatible with those prescribed for Italian undertakings.
6. The Bank of Italy, after consulting Consob, shall lay down in a regulation the conditions and procedures for granting the authorisation referred to in subsection 5.
7. The Bank of Italy and Consob shall exercise the powers referred to in Articles 8 and 10 with regard to activities performed in Italy by the foreign undertakings referred to in subsection 5211 .
8. The Bank of Italy and Consob may, to the extent of their respective authority, require persons marketing units of the undertakings referred to in subsection 5 to provide data and information, also on a periodic basis, and to transmit records and documents212 .
Chapter III
SICAVs
Article 43
Establishment and eligible activities
1. The Bank of Italy, after consulting Consob, shall authorise the establishment of SICAVs where the following conditions are satisfied213 :
a) the legal form adopted is that of a società per azioni in accordance with the provisions of this chapter;
b) the registered office and the head office of the company are in Italy;
c) the paid-up capital is not less than that established on a general basis by the Bank of Italy;
d) the persons performing administrative, management or supervisory functions fulfil the experience, independence and integrity requirements referred to in Article 13;214
e) holders of investments indicated in Article 15, subsection 1 are in possession of the integrity requirements established in Article 14 and there are no grounds for prohibition pursuant to Article 15, subsection 2215;
f) the Articles of Association provide for the object of the company to be exclusively the investment on a collective basis of funds raised through the offer of the company's shares to the public;
f-bis) the structure of the group of which the company is part is not prejudicial to the effective supervision of the company and at least the information required pursuant to Article 15(5) is provided;216
f-ter) a programme of operations is submitted, together with the instrument of incorporation and the Articles of Association and a report on the company's organisational structure.217
2. The Bank of Italy, after consulting Consob, shall regulate:
a) the authorisation procedure and the cases in which authorisation shall lapse;
b) the documentation to be submitted by the founder members together with the application for authorisation and the content of the proposed instrument of incorporation and Articles of Association218 .
3. The Bank of Italy shall verify compliance of the proposed instrument of incorporation and Articles of Association with law, regulatory provisions and its established general criteria219 .
4. The founding members of a SICAV must establish the company and pay in the capital subscribed within thirty days of the date of issue of the authorisation. The capital must be fully paid.
5. The name of the company shall contain the words "società di investimento per azioni a capitale variabile SICAV". The name must appear on all the company's documents. SICAVs shall not be subject to Articles 2333, 2334, 2335 or 2336 of the Civil Code; capital may not be contributed in kind.
6. SICAVs may perform related and instrumental activities as established by the Bank of Italy after consulting Consob220 .
7. SICAVs may delegate powers to manage their assets exclusively to Italian asset management companies.
8. In the case of multi-sector SICAVs, each sector shall constitute an independent pool of assets, separate for all intents and purposes from the assets of the other sectors.
Article 43-bis221
SICAVs that appoint an Italian or a harmonised asset management company
1. The Bank of Italy, after consulting Consob, shall authorise the establishment of SICAVs that appoint an Italian management company or a harmonised management company to manage their assets where the following conditions are satisfied:
a) the legal form adopted is that of a società per azioni in accordance with the provisions of this chapter;
b) the registered office and the head office of the company are in Italy;
c) the paid-up capital is not less than that established on a general basis by the Bank of Italy;
d) the persons performing administrative, management or supervisory functions fulfil the experience and integrity requirements established pursuant to Article 13;
e) holders of investments indicated in Article 15, subsection 1 are in possession of the integrity requirements established pursuant to Article 14 and there are no grounds for the prohibition envisaged in Article 15, subsection 2222;
f) the Articles of Association provide for:
1) the object of the company to be exclusively the investment on a collective basis of funds raised through the offer of the company's shares to the public;
2) the management of all the assets to be entrusted to an Italian or a harmonised management company with an indication of the company appointed. Entrusting the management to a harmonised management company shall be subject to the existence of cooperation agreements with the competent home country authorities, so as to ensure the effective supervision of the management of the SICAV's assets223 .
2. For the purposes of subsection 1, subsections 3, 4, 5 and 8 of Article 43 shall apply.
Article 44
Register
1. SICAVs authorised in Italy shall be entered in a special register kept by the Bank of Italy224 .
2. The Bank of Italy shall communicate entries in the register of SICAVs to Consob.
3. The persons referred to in subsection 1 shall indicate the details of the entry in the register in their documents and correspondence.
Article 45
Capital and shares
1. The capital of a SICAV shall always be equal to its net assets, determined as provided for in point 5 of Article 6(1)(c).
2. Articles 2438 and 2447 of the Civil Code shall not apply to SICAVs225 .
3. The shares representing the capital of a SICAV must be fully paid at the moment they are issued.
4. The shares of a SICAV may be in registered or bearer form, at the choice of the subscriber. Bearer shares carry only one vote per shareholder, irrespective of the number of such shares held.
5. The Articles of Association of a SICAV shall specify the manner of determining the value of its shares, their issue and redemption prices and the intervals at which the shares may be issued and redeemed.
6. The Articles of Association of a SICAV may provide for:
a) limits on the issue of registered shares;
b) restrictions on the transfer of registered shares;
c) the existence of more than one investment sector, for each of which a special class of shares may be issued; in such case criteria shall be laid down for allocating overheads among the various sectors
c-bis) the possibility of issuing fractions of shares, except that the attribution and exercise of the shareholders' rights shall be subject to the possession of at least one share in accordance with the provisions of this chapter.226
7. Articles 2348, second and third subsections, 2349, 2350, second and third subsections, 2351, 2352, third subsection, 2353, 2354, third subsection, paragraphs 3 and 4, 2355-bis and 2356 of the Civil Code shall not apply to SICAVs.227
8. SICAVs may not issue bonds or savings shares or purchase or hold their own shares.
Article 46
Shareholders' meetings
1. SICAVs' ordinary shareholders' meetings and extraordinary meetings at the second call shall be duly constituted and may adopt resolutions however much capital is represented.
2. Votes may be cast by post where this is provided for in the Articles of Association. In such case the notice calling the meeting must contain the full text of the proposed resolutions. Postal votes shall not be counted where the resolution to be put to the vote in the shareholders' meeting does not conform with that contained in the notice calling the meeting, but the shares in question shall be counted for the purpose of establishing due constitution of the ordinary shareholders' meeting. The Minister of the Economy and Finance shall establish the procedures for casting postal votes in a regulation adopted after consulting the Bank of Italy and Consob228229 .
3. The notice provided for in the second subsection of Article 2366 of the Civil Code shall also be published in the daily newspapers, specified in the Articles of Association, in which the value of the company's net assets and the net asset value per share are published; the time limit referred to in Article 2366, second subsection, shall be thirty days.
Article 47
Amendments to the Articles of Association
1. The Bank of Italy shall approve amendments to SICAVs' Articles of Association. They shall be deemed to be approved where four months elapse from their submission without adoption of a rejection measure by the Bank of Italy230 .
2. Resolutions involving amendments to a SICAV's Articles of Association may not be filed pursuant to and for the purposes of Article 2436 of the Civil Code if they have not been approved within the time limit and in the manner provided for in Article 1. The resolutions shall be sent to the Bank of Italy within fifteen days of the date of the shareholders' meeting; the filing referred to in Article 2346 of the Civil Code must be effected within fifteen days from the date of the reception of the Bank of Italy's approval. Article 2376 of the Civil Code shall not apply.
Article 48
Dissolution and voluntary liquidation
1. Article 2448, subsection 1, paragraphs 4 and 5, of the Civil Code shall not apply to SICAVs. Where the capital of a SICAV falls below the level determined in accordance with Article 43(1)(c) and remains below that level for sixty days, the company shall be dissolved. The time limit shall be suspended where the procedure for a merger with another SICAV has been initiated.231
2. The acts for which publication is provided for in Article 2484, subsections 3 and 4, of the Civil Code must also be published in the daily newspapers specified in the Articles of Association and transmitted to the Bank of Italy within ten days of their entry in the Company Register. The issue and redemption of shares shall be suspended in the case referred to in Article 2484, subsection 1, paragraph 6, of the Civil Code from the date the resolution is adopted, in the cases referred to in Article 2448, subsection 1, paragraphs 1, 2, 3 and 7, of the Civil Code and in subsection 1 of this article from the date the resolution is adopted by the board of directors or from the date the decree of the president of the court is entered in the Company Register. The resolution adopted by the board of directors shall also be transmitted to Consob within the same time limit.232
3. The liquidators shall be appointed, removed and replaced by the extraordinary meeting of shareholders. Article 2487 of the Civil Code, except for subsection 1c), and Article 97 of the Consolidated Law on Banking shall apply.233
4. The Bank of Italy shall be notified in advance of the plan for the disposal of assets and the allotment of the proceeds. The liquidators shall realize the company's assets in accordance with the rules established by the Bank of Italy.
5. The statement of liquidation assets and liabilities shall be submitted to the independent statutory auditors for their opinion and shall be published in the daily newspapers specified in the Articles of Association234 .
6. The depositary bank shall reimburse, in accordance with the instructions of the liquidators, the shares on the basis of the final statement of the assets and liabilities of the liquidation.
7. For matters not governed by this article, SICAVs shall be subject to Book V, Title V, Chapter VIII, of the Civil Code insofar as they are compatible.235
Article 49
Mergers and divisions
1. SICAVs may not transform themselves into undertakings which are not subject to this chapter or Chapter II of this title236 .
2. Mergers and divisions of SICAVs shall be subject to Articles 2501 et seq. of the Civil Code insofar as they are compatible.
3. Plans for mergers and divisions, drawn up in accordance with Article 43, and resolutions of shareholders' meetings amending such plans shall be submitted to the Bank of Italy in advance for clearance, which it shall grant after consulting Consob.237
4. In the absence of the clearance referred to in subsection 3, the entries in the Company Register required by the Civil Code may not be made.238
Article 50
Other applicable provisions
1. For matters not governed by this chapter, SICAVs shall be subject to Articles 36(2), 37,38, 40 and 41. SICAVs authorised under Article 43 shall also be subject to Articles 33(3) and 33(4).239
2. The marketing in Italy of the shares of foreign SICAVs shall be subject to Article 42.
TITLE IV
INJUNCTIVE REMEDIES AND CRISES
Chapter I
Injunctive remedies
Article 51
Injunctive remedies vis-à-vis Italian and non-EU intermediaries
1. In the event of violations by Italian investment companies, non-EU investment companies and banks, asset management companies, SICAVs or banks authorised to provide investment services and activities having their registered office in Italy of the provisions applicable to them under this decree, the Bank of Italy or Consob, to the extent of their duties, may order them to put an end to such irregularities240 .
2. The supervisory authority which takes action may also, after consulting the other authority, prohibit the persons referred to in subsection 1 from engaging in new transactions as well as place any other limitation with regard to each type of transaction involving single services or activities, at single branches or establishments of the intermediary or otherwise where241 :
a) the violations are likely to prejudice interests of a general nature;
b) it is a matter of urgency to protect the interests of investors.
Article 52
Special measures for EU intermediaries
1. In the event of violations by EU investment companies with branches in Italy, harmonised asset management companies, EU banks with branches in Italy or financial companies referred to in Article 18(2) of the Consolidated Law on Banking of the rules applicable to them under this decree, the Bank of Italy or Consob, to the extent of their duties, may order them to put an end to such irregularities and shall inform the competent supervisory authorities of the member state in which the intermediary has its registered office so that any necessary measures may be taken.242
2. The supervisory authority which takes action may, after consulting the other authority, adopt the necessary measures, including the prohibition of new transactions, as well as any other limitation with regard to each type of transaction, single services or activities, also limited to single branches or establishments of the intermediary, and may also order the closure of branches where243 :
a) the competent authorities of the member state in which the intermediary has its registered office take no measures or measures that prove inadequate;
b) violations of the rules of conduct are found;
c) the irregularities are likely to prejudice interests of a general nature;
d) it is a matter of urgency to protect the interests of investors.
3. The measures provided for in subsection 2 shall be notified by the authority that has adopted them to the competent authorities of the member state in which the intermediary has its registered office.
3-bis. Where there are grounds to suspect that an EU investment company of bank freely operating in Italy do not comply with obligations deriving from EU regulations, the Bank of Italy or Consob shall inform the competent authority of the member state in which the intermediary's registered office is based to arrange necessary measures. If despite measures adopted by the competent authority the intermediary continues to act in a manner that compromises the interests of investors or regular market operations, the Bank of Italy or Consob, after notifying the competent authority of the member state in which the intermediary's registered office is based, shall adopt all measures necessary, including the prohibition of execution of further operations in Italy. After consulting the other authority, the Bank of Italy or Consob shall proceed and inform the European Commission of the measures adopted244 .
3-ter. Subsection 3-bis shall also apply in the case of violations by EU investment companies or banks with branches in Italy of obligations deriving from EU regulations for which the competent authority is that of the EU member state in which the intermediary’s registered office is based245 .
Article 53
Suspension of administrative bodies
1. In situations of danger for customers or markets, the Chairman of Consob may suspend the administrative bodies of an Italian investment company as a matter of urgency and appoint a provisional administrator to take over its management where serious administrative irregularities or serious violations of laws, regulations or Articles of Association are found.
2. The appointment of the provisional administrator shall be for a maximum of sixty days. In the performance of his or her duties, the provisional administrator shall be a public official. The Chairman of Consob may establish special safeguards and limitations on the management of the Italian investment company.246
3. The emolument due to the provisional administrator shall be determined by Consob on the basis of criteria it shall establish and charged to the Italian investment company. The last sentence of Article 91, subsection 1 of the Consolidated Law on Banking shall apply247 .
4. Civil actions against the provisional administrator for acts performed in carrying out his official duties shall be brought subject to authorisation by Consob.
5. This article shall also apply to the Italian branches of non-EU investment companies. The provisional administrator shall assume the powers of the administrative bodies of the investment company with regard to such branches.
6. This article shall also apply to asset management companies and SICAVs. The Chairman of Consob shall adopt the suspension measure after consulting the Governor of the Bank of Italy.
Article 54
Suspension of the marketing of units of foreign collective investment undertakings
1. Where there are grounds to believe that a foreign collective investment undertaking has violated the provisions applicable to it under this decree, the Bank of Italy or Consob, within the scope of their respective authority, may suspend the marketing of its units or shares as a precautionary measure and for a period not longer than sixty days. If the violation is verified, the supervisory authorities, within the scope of their respective authority, may suspend temporarily or prohibit the marketing of the collective investment undertaking 's units or shares.
Article 55
Precautionary measures applicable to financial salesmen
1. In cases of necessity and as a matter of urgency Consob may, as a precautionary measure, suspend financial salesmen from the exercise of their activity for a maximum of sixty days, where there are grounds to believe that there have been serious violations of the law or of general or specific rules laid down by Consob.
2. Consob may, as a precautionary measure and for a maximum of one year, suspend financial salesmen from the exercise of their activity where they have been subjected to one of the precautionary measures referred to in Book IV, Title I, Chapter II of the Criminal Procedure Code or where they are defendants pursuant to Article 60 of that Code for:
a) crimes referred to in Book V, Title XI, of the Civil Code and in the bankruptcy law;
b) crimes against the public administration, against the good faith of the public, against property, against public order or against the public economy, and tax crimes;
c) the crimes referred to in Title VIII of the Consolidated Law on Banking;
d) the crimes referred to in this decree;
Chapter II
Crisis procedures
Article 56
Special administration
1. The Minister of the Economy and Finance,248 acting on a proposal from the Bank of Italy or Consob, to the extent of their duties, may issue a decree dissolving the administrative and control bodies of an Italian investment company or management company or a SICAV where:
a) serious administrative irregularities or serious violations of laws, regulations or Articles of Association governing its activity are found;
b) serious capital losses are expected;
c) the dissolution has been the object of a reasoned request by the administrative bodies, an extraordinary meeting of shareholders or the provisional administrator appointed pursuant to Article 53249 .
2. The measure provided for in subsection 1 may also be adopted with respect to the Italian branches of non-EU investment companies. In this case the administrator and the oversight committee assume the powers of the investment company's administrative and control bodies with respect to such branches.
3. The Bank of Italy shall be responsible for the direction of the procedure and all the related formalities. Insofar as they are compatible, Articles 70(2-6), 71, 72, 73, 74 and 75 of the Consolidated Law on Banking shall apply; where such provisions shall be understood to refer to investors instead of depositors and to Italian investment companies, non-EU investment companies, asset management companies and SICAVs instead of banks; and the term "financial instruments" shall refer to financial instruments and cash.
4. Title IV of the Bankruptcy Law shall not apply to Italian investment companies or asset management companies or SICAVs.
Article 57
Compulsory administrative liquidation
1. The Minister of the Economy and Finance,250 acting on a proposal from the Bank of Italy or Consob to the extent of their duties, may issue a decree withdrawing authorisation to carry on business and ordering the compulsory administrative liquidation of Italian investment companies, asset management companies and SICAVs, even when special administration or liquidation under ordinary rules is already in effect, where the administrative irregularities or the violations of laws, regulations or Articles of Association or the losses referred to in Article 56 are exceptionally serious251 .
2. Compulsory liquidation may be ordered in the manner provided for in subsection 1 upon a reasoned request by the administrative bodies, the extraordinary shareholders' meeting, the provisional administrator appointed pursuant to Article 53, the special administrators or the liquidators.
3. The Bank of Italy shall be responsible for the direction of the procedure and all the related formalities. Insofar as they are compatible, Articles 80(3-6), 81, 82, 83, 84, 85, 86 except for subsections 6 and 7, 87(2-4), 88, 89, 90, 91, 92, 93, 94 and 97 of the Consolidated Law on Banking shall apply; where such provisions shall be understood to refer to Italian investment companies, asset management companies and SICAVs instead of banks and the term "financial instruments" shall refer to financial instruments and cash.
4. The liquidators, within thirty days of the expiry of the limitation period referred to in Article 86(5) of the Consolidated Law on Banking and after consulting the superseded directors, shall file the lists of admitted creditors, indicating the existence and order of rights of preference, of holders of rights referred to in subsection 2 of such article and of persons belonging to the same categories whose request for allowance of their claims has been denied with the Bank of Italy and, for inspection by those having entitlement, with the clerk of the court of the place where the Italian investment company or management company or the SICAV has its registered office. Customers entitled to the restitution of financial instruments and funds in connection with services and activities referred to in this decree shall be entered in a special section of the statement of liabilities. This subsection shall apply in the place of Articles 86(6) and 86(7) of the Consolidated Law on Banking252 .
5. Persons whose claims have not been allowed in whole or in part may present objections to the statement of liabilities regarding their own position and to the recognition of rights in favour of persons included in the lists referred to in subsection 4, within fifteen days of receipt of the registered letter referred to in Article 86(8) of the Consolidated Law on Banking, and persons whose claims have been admitted may present objections within the same time limit starting from the publication of the notice referred to in subsection 8 of such article. This subsection shall apply in the place of Article 87(1) of the Consolidated Law on Banking.
6. If the compulsory administrative settlement regards a SICAV, the commissioners shall inform shareholders within thirty days of appointment of the number and type of shares pertaining to each in accordance with company records and documents.
Article 58
Italian branches of foreign investment companies
1. Where the authorisation to do business of an EU investment company or a harmonised management company has been revoked by the competent authority, its Italian branches may be subjected to the compulsory administrative liquidation procedure under the provisions of Article 57, insofar as they are compatible.253
2. The branches of non-EU investment undertakings shall be subject to the provisions of Article 57, insofar as they are compatible.
Article 59
Compensation systems
1. The issue of authorisation for the provision of investment services and activities shall be subject to membership of a compensation system for the protection of investors recognized by the Minister of the Economy and Finance254 after consulting the Bank of Italy and Consob255256 .
2. The Minister of the Economy and Finance,257 after consulting the Bank of Italy and Consob, shall adopt a regulation on the organisation and operation of compensation systems.258
3. The Bank of Italy, after consulting Consob, shall issue a regulation on the coordination of the operation of compensation systems with the compulsory administrative liquidation procedure and supervisory activity in general.
4. Compensation systems shall succeed to the rights of investors up to the amount of payments made to them.
5. The bodies of the insolvency procedure shall verify and certify whether claims admitted to the statement of liabilities arise from the provision of investment services and activities covered by compensation systems259 .
6. The competent court for legal actions involving requests for compensation shall be the court of the place in which the registered office of the compensation system is located.
Article 60
Foreign intermediaries' membership of compensation systems
1. Branches of EU investment companies, harmonised asset management companies and banks established in Italy may join a recognized compensation system, with reference exclusively to the activity carried on in Italy, in order to supplement the protection provided by the compensation system in force in their home country.260
2. Unless they are members of an equivalent foreign compensation system, branches of non-EU investment companies and banks established in Italy must join a recognized compensation system, with reference exclusively to the activity carried on in Italy. The Bank of Italy shall verify whether the protection provided by foreign compensation systems to which branches of non-EU investment companies and banks operating in Italy belong can be considered equivalent to that provided by recognized compensation systems.
Article 60-bis
Liability of Italian investment companies, asset management companies and SICAVsfor administrative offences consequent on a crime
1. Public prosecutors who enter an administrative offence involving an Italian investment company or management company or a SICAV in the register of suspected crimes pursuant to Article 55 of Legislative Decree 231/2001 shall notify the Bank of Italy and Consob. The Bank of Italy and Consob may be heard during the proceedings at the request of the public prosecutor; they may submit written briefs.
2. In every court concerned with the merits of the case, the judge, proceeding on his own authority or otherwise, shall provide for the acquisition from the Bank of Italy and Consob of updated information on the situation of the intermediary, with special reference to its organisational structure and internal control system.
3. An unappealable sentence that imposes interdictive sanctions referred to in Articles 9(2)(a) and 9(2)(b) of Legislative Decree 231/2001 on an Italian investment company or management company or a SICAV shall be transmitted, upon expiration of the time limit for the conversion of the sanctions, by the judicial authority to the Bank of Italy and Consob for enforcement. To this end Consob or the Bank of Italy, within the scope of their respective authority, may propose or adopt the measures referred to in Part II, Title IV, taking account of the nature of the sanction imposed and the primary aim of safeguarding stability and protecting the rights of investors.
4. The interdictive sanctions referred to in Articles 9(2)(a) and 9(2)(b) of Legislative Decree 231/2001 may not be applied on a precautionary basis to Italian investment companies or asset management companies or SICAVs. Neither shall Article 15 of Legislative Decree 231/2001 apply to such intermediaries.
5. This article shall apply to the Italian branches of EU and non-EU investment companies insofar as it is compatible.261
PART III
REGULATION OF MARKETS AND
CENTRAL DEPOSITORIES FOR FINANCIAL INSTRUMENTS
TITLE I
REGULATION OF MARKETS
Chapter I
Regulated markets
Article 60-ter
Regulation principles
1. The Bank of Italy and Consob shall exercise the regulatory powers envisaged in this Title in observance of the principles pursuant to article 6, subsection 1262 .
Article 61
Regulated markets for financial instruments
1. The organisation and management of regulated markets for financial instruments is an entrepreneurial activity and shall be performed by società per azioni, which may also operate on a non-profit basis (stock exchange companies).
2. Consob shall lay down in a regulation:
a) the financial resources of the management company263 ;
b) the activities related and instrumental to the organisation and management of markets which may be performed by stock exchange companies264 .
3. The Minister of the Economy and Finance,265 after consulting Consob, shall adopt a regulation establishing the integrity, professionalism and independence requirements for persons performing administrative, management or supervisory functions within stock exchange companies. Article 13(2) shall apply. In the event of inaction, Consob shall declare disqualification.266
4. The regulation referred to in subsection 3 shall establish the grounds for temporary suspension from office and its duration. The suspension shall be declared in the manner established in subsection 3.
5. The Minister of the Economy and Finance,267 after consulting Consob, shall issue a regulation establishing the integrity requirements for shareholders.268
6. Acquisitions and disposals of shareholdings in stock exchange companies, whether effected directly or indirectly through subsidiary companies, trust companies or nominees, must be notified by the acquirer to Consob and the stock exchange company within 24 hours, together with documentation certifying that the acquirer satisfies the requirements referred to in subsection 5269 .
6-bis. Consob shall regulate:
a) the content, terms and methods for reports to Consob by stock exchange companies on information relating to shareholders, identifying the significant shareholding threshold for this purpose and with regard to the possession of integrity requirements pursuant to subsection 5 and reports pursuant to subsection 6;
b) the content, terms and methods for reports to Consob by stock exchange companies on information relating to persons performing administrative, management and audit duties for the management company and to persons effectively managing regulated market activities and operations, and any subsequent changes;
c) the content, terms and methods of publication by stock exchange companies of information relating to shareholders and any subsequent change in the identity of persons with a significant shareholding270.
6-ter. The provisions of subsection 6-bis shall be adopted by the Ministry of Economy and Finance, after consulting the Bank of Italy and Consob, in cases of regulated stock exchange companies for the wholesale trading of government securities, and by Consob, after consulting the Bank of Italy, in cases of management of regulated markets for the wholesale trading of private and public bonds, other than government securities, together with the regulated stock exchange companies for instruments pursuant to article 1, subsection 2, paragraph b) and derivatives on public securities, interest rates and currency271 .
7. Failure to satisfy such requirements or to provide notification shall preclude the exercise of the voting rights attached to the shares in excess of the limit referred to in subsection 6-bis272 .
8. In the event of non-compliance with the prohibition referred to in paragraph 7, Article 14(5) shall apply. The challenge may also be initiated by Consob within the time limit established in Article 14(6).
8-bis. Within 90 days of notification by the management company, Consob may oppose changes to the ownership structure when such changes could compromise the sound and prudent management of the market. For wholesale markets of government securities the provision shall be adopted by the Bank of Italy. In cases of opposition from the competent authority, voting rights on shares subject to disposal may not be exercised273.
8-ter. The provisions of subsection 8-bis shall be adopted after consulting the Bank of Italy in cases of regulated stock exchange companies for the wholesale trading of private and public bonds, other than government securities, together with regulated stock exchange companies for instruments pursuant to article 1, subsection 2, paragraph b) and derivatives on public securities, interest rates and currency274.
9. Part IV, Title III, Chapter II, Section VI, except for Articles 157 and 158275.
10. The Minister of the Economy and Finance,276 after consulting the Bank of Italy and Consob, shall specify the characteristics of wholesale trading of financial instruments with a view to application of the provisions of this decree277 .
Article 62
Market rules
1. The organisation and management of a market shall be governed by rules approved by the ordinary shareholders' meeting or supervisory board of the stock exchange company. The rules may assign powers to establish implementing provisions to the board of directors or management council278.
1-bis. If the shares of the stock exchange company are listed on a regulated market, the rules referred to in subsection 1 shall be approved by the company’s board of directors or management council.279
1-ter. In compliance with the provisions of Directive 2004/39/EC and related enactment measures, Consob shall identify and regulate the general criteria to which market regulation must adapt on matters of:
a) admission to trading of financial instruments;
b) Suspension and exclusion from trading of financial instruments on regulated markets;
c) methods to guarantee advertising of market regulation280.
1-quarter The provisions of subsection 1-ter shall be adopted after consulting the Bank of Italy in cases of markets for the wholesale trading of private and public bonds, other than government securities, together with markets for the trading of instruments pursuant to article 1, subsection 2, paragraph b) and derivatives on public securities, interest rates and currency281.
2. Stock exchange companies shall adopt transparent, non-discretional rules and procedures to guarantee correct and orderly trading, and objective criteria to allow the efficient execution of orders. In any event, market regulation shall determine282 :
a) the conditions and procedures for the admission, exclusion and suspension of intermediaries and financial instruments to and from trading;
b) the conditions and procedures for the conduct of trading and any obligations of intermediaries and issuers;
c) the procedures for ascertaining, publishing and distributing prices;
d) the types of contract admissible and the methods for determining the minimum amounts which may be traded.
d-bis) the terms and conditions for the clearance, settlement and guarantee of transactions concluded on the markets283.
2-bis. The rules may lay down that the shares of parent companies whose assets consist primarily of direct or indirect shareholdings in one or more companies with shares listed on regulated markets are to be traded in a separate segment of the market.284
3. Regulations pursuant to subsection 1 shall govern the access of operators to the regulated market, in accordance with transparent, non-discriminatory rules and based on objective criteria, together with criteria for the direct or remote participation in a regulated market and obligations imposed upon operators deriving from:
a) the establishment and management of the regulated market;
b) provisions regarding the transactions executed on the market;
c) the professional standards imposed upon persons pursuant to article 25, subsection 1 operating on the market;
d) the conditions established for participants other than persons referred to in paragraph c) pursuant to article 25, subsection 2;
e) the rules and procedures for clearance and settlement of transactions concluded on the regulated market285 .
3-bis. Consob shall lay down in a regulation:
a) the rules concerning accounting transparency and adequate organisational structure and internal control mechanisms that subsidiaries set up under and governed by the laws of non-EU countries must comply with for the shares of the parent company to be listable on an Italian regulated market. The notion of control defined in Article 93 shall apply;
b) the conditions whose existence precludes the listing of shares of subsidiaries subject to the activity of direction and coordination of another company;
c) the transparency rules and the restrictions on the admission to listing on the Italian securities market of financial companies whose assets consist exclusively of shareholdings.286
Article 63
Authorisation of regulated markets
1. Consob shall authorise the operation of regulated markets where:
a) the requirements referred to in Article 61(2-5) are satisfied;
b) the market rules are in conformity with Community law and sufficient to ensure the transparency of the market, the orderly conduct of trading and the protection of investors.
1-bis. Authorisation pursuant to subsection 1 shall be subordinate to the submission of a plan of activities illustrating the type of activities planned and the organisational structure of the management company287 .
2. Consob shall enter regulated markets in a register, complying with Community provisions in this field, and shall approve amendments to market rules.
3. The measures referred to in subsections 1 and 2 shall be adopted, after consulting the Bank of Italy, for markets for the wholesale trading of private and public debt securities other than government securities, as well as for markets for the trading of instruments referred to in Article 1(2) paragraph b) and financial derivatives based on public securities, interest rates and currencies288 .
4. The Bank of Italy shall be admitted to trading in markets for standardized forward contracts on government securities.
Article 64
Organisation and operation of markets and stock exchange companies289
01. By its own regulation, Consob shall identify the reporting obligations of stock exchange companies to Consob and, with regard to transparency, the orderly conduct of trading and investor protection and, in compliance with the provisions of Directive 2004/39/EC, the general organisational requirements of the regulated stock exchange companies290.
1. A stock exchange company shall:
a) provide the structures and services of the market and establish its charge schedule;
b) adopt all the measures required for the efficient operation of the market, and arrange and maintain effective devices and procedures for the control and observance of the regulation291 ;
b-bis) adopt all the provisions and measures required to prevent and identify insider trading and market manipulation;292
c) admit, exclude and suspend financial instruments and market participants to and from trading and immediately inform Consob about the decisions taken; implementation of decisions taken for trading ordinary shares, bonds and other financial instruments issued by people or bodies other than those of Member States of the European Union, of Community banks and of companies having shares listed on a regulated market, including exclusion decisions of shares from trading is suspended until the time specified in subsection 1-bis, paragraph a); this suspension is not applied in the case of admission to trading of financial instruments admitted under the exemption rule from the obligation to publish the prospectus as well as admission of supplementary lots of shares already admitted to trading;293
d) notify Consob of violations of the market rules and the measures adopted.
e) …omissis…294 ;
f) perform any other tasks that may be entrusted to it by Consob.
1-bis. Consob:
a) can forbid the implementation of admission decisions and the exclusion as per subsection 1, paragraph c), second period or order to revoke a suspension decision for financial instruments and trading operators, within five days from receiving the communication as per subsection 1, paragraph c), if, on the basis of the information different to the ones assessed, according to market regulations, by the management company during its investigation, considers the decision being against the aims as per Article 74, subsection 1.295
b) may request the stock exchange company to provide all the inform it considers necessary for the purposes of paragraph a);
c) may request the stock exchange company to suspend financial instruments or intermediaries from trading.296
1-ter. The admission, exclusion and suspension to and from trading of financial instruments issued by a stock exchange company on a market that it manages shall be decided by Consob. In such cases Consob shall determine the amendments to be made to the market rules to ensure transparency, orderly trading and the protection of investors and to regulate possible conflicts of interest. The admission of such financial instruments shall be subject to the amendment of the rules of the relevant market.297
1-quater. Where a financial instrument is traded on regulated markets pursuant to article 67, subsection 1, Consob shall:
a) make public any decisions made pursuant to subsection 1-bis, paragraph c) and inform the competent authorities of EU member states of the regulated markets on which the financial instrument relating to the decision is admitted for trading;
b) inform the competent authorities of other EU member states of the decision to suspend or exclude a financial instrument from trading, based on the report received from the management company pursuant to subsection 1, paragraph c)298 .
1-quinquies. The provisions of subsection 01 shall be adopted after consulting the Bank of Italy in cases of regulated stock exchange companies for the wholesale trading of private and public bonds, other than government securities, together with regulated stock exchange companies for instruments pursuant to article 1, subsection 2, paragraph b) and derivatives on public securities, interest rates and currency.299
1-sexies. Unless damage may be caused to the interests of investors or to regular market operations, Consob shall request the suspension or exclusion of a financial instrument from trading on a regulated market incases where said financial instrument was subject to a suspension or exclusion measure by the competent authorities of other EU member states300 .
Article 65
Recording of transactions in financial instruments at the stock exchange company and obligations of communication of transactions in financial instruments concluded
1. Consob shall lay down in a regulation:
a) the manner of recording at the stock exchange company of all transactions concluded on financial instruments admitted to trading in a regulated market;
b) the content, terms and manner in which persons authorised to carry out the transactions concluded regarding financial instruments admitted to trading in a regulated market shall report such transactions.
2. Where necessary in order to guarantee investor protection, Consob may also extend reporting obligations pursuant to subsection 1, paragraph b) to financial instruments not admitted to trading on regulated markets301 .
Article 66
Wholesale markets in government securities
1. Also by way of derogation from the provisions of this chapter, the Minister of the Economy and Finance,302 after consulting the Bank of Italy and Consob, shall regulate and authorise wholesale markets for government securities and shall approve their rules303 .
2. The Bank of Italy shall be admitted to trading in wholesale markets in government securities. The Ministry of the Economy and Finance304 shall be admitted to trading in wholesale markets in government securities; it shall notify the Bank of Italy in advance of the timing and manner of its interventions. Within twenty-four hours of the notification, the Bank of Italy may make a reasoned request for interventions to be postponed or carried out in a different manner in order to safeguard monetary stability. The measures issued pursuant to subsection 1 may also provide for the admission to trading of persons other than intermediaries authorised to engage in trading305 .
Article 66-bis
Energy and gas derivatives markets
1. The provisions of this Chapter, except where indicated in the subsections below, shall apply to regulated markets for the trading of energy and gas derivatives and to companies operating such markets.
2. The provisions of articles 61, subsections 8 and 8-bis, 63, subsections 1 and 2, 67, subsections 2, 3, 5-bis and 5-ter, 70-bis, subsection 2, paragraph b), 70-ter, subsection 2, 73, subsection 4, and 75, subsections 2 and 4, shall be adopted by Consob, in agreement with the electricity and gas boards.
3. The provisions of article 62, subsection 1-ter shall be adopted by Consob after consulting the electricity and gas boards.
4. The provisions of article 64, subsection 1-bis paragraph c) shall be adopted by Consob after consulting the electricity and gas boards.
5. The provisions of article 67, subsection 2-bis shall be attributed to Consob after consulting the electricity and gas boards.
6. The electricity and gas boards shall exercise powers granted under this article with regard to general needs of stability, economics and competitiveness of electricity and gas markets, and the safe, efficient operation of national electricity and gas transportation networks.
7. In the exercise of duties envisaged under this article, Consob and the electricity and gas boards shall interactively provide mutual support and cooperation also by means of exchange of information, without objection on the grounds of official secrecy. Consob and the electricity and gas boards shall act in a coordinated manner, for this purpose stipulating special memoranda of understanding.
8. The electricity and gas boards shall inform the Ministry of Economic Development of supervisory activities performed and on irregularities discovered that could have an impact on the operations of physical markets for the underlying products and on the safe and efficient operation of national electricity and gas transportation networks306 .
Article 67
Recognition of markets
1. Consob shall enter markets recognized pursuant to Community law in a special section of the register referred to in Article 63(2).
2. Consob, after concluding agreements with the corresponding authorities, may recognize foreign markets for financial instruments other than those entered in the section referred to in subsection 1, for the purpose of extending the scope of their operations to Italy.
2-bis. In order to guarantee transparency, the orderly conduct of trading and the protection of investors, Consob shall stipulate agreements with the supervisory authorities of the home state of EU regulated markets that, in the opinion of Consob, have gained considerable importance in the operation of the Italian financial market and on the protection of investors in Italy. For wholesale markets of government securities such tasks shall be performed by the Bank of Italy307 .
3. Stock exchange companies that intend to apply to the authorities of non-EU countries for recognition of the markets they manage shall notify Consob, which shall grant its authorisation after concluding agreements with the corresponding foreign authorities. For wholesale markets of government securities the Bank of Italy shall be notified, which will then release its authorisation subject to the stipulation of agreements with the foreign authorities and inform Consob accordingly308 .
4. In cases pursuant to subsections 2 and 3, Consob or the Bank of Italy, according to their respective duties, shall verify that the information regarding securities and issuers, the methods of forming prices and settling transactions, and the laws and regulations governing the supervision of markets and intermediaries are equivalent to those in force in Italy and in any case able to ensure adequate protection of investors309 .
5. Stock exchange companies that intend to extend operations of the regulated markets managed to other EU member states shall issue prior notification to Consob. With respect to European regulations, Consob shall inform the competent authority of the EU member state in which the regulated market intends to operate. For wholesale markets of government securities the prior notification is issued to the Bank of Italy, which shall inform the competent authority of the EU member state concerned and Consob 310 .
5-bis. Consob shall authorise the markets pursuant to subsection 1 to arrange appropriate devices to facilitate access to trading on such markets by their remote members and participants established in Italy311 .
5-ter. Consob may request the identity of members or participants of the regulated market established in Italy from the competent authority of the home member state pursuant to subsection 5-bis312 .
5-quater. For remote participants in Italian regulated markets, articles 8 subsection 1 and 10 subsection 1 shall apply. In this case, Consob shall inform the competent authority of the home member state of the remote participant. For wholesale markets of government securities, the Bank of Italy shall inform the competent authority of the EU member state of the remote participant and Consob313 .
Article 68
Contract guarantee systems
1. The Bank of Italy, in agreement with Consob, may regulate the establishment and operation of systems designed to ensure the success of transactions in financial instruments other than derivatives carried out on regulated markets, including the issue of rules on the establishment of guarantee funds financed with contributions from their investors314 .
2. The capital of each fund shall be kept separate from that of the body that administers it and from that of other funds. Funds may not be the object of actions, seizures or attachments by the creditors of the body administering them or creditors of the individual participants or in the interests of such creditors. Funds may not be included in bankruptcy proceedings involving the body administering them or the individual participants. Legal and judicial set-off shall not apply and voluntary set-off shall not be allowed between credit balances in the deposit accounts of the funds and any debts that the administrator of the funds may have with the depositary.
Article 69
Clearing and settlement of transactions involving financial instruments other than derivatives
1. The Bank of Italy, in agreement with Consob, shall regulate the operation of the clearing and settlement service and the gross settlement service for transactions involving financial instruments other than derivatives, including the establishment of time limits and preliminary and supplementary duties. Such regulations may provide for the clearing and settlement service and the gross settlement service, excluding final settlement of the cash portion of transactions, to be managed by a company authorised by the Bank of Italy in agreement with Consob315 . For the transfer of registered securities, including those other than shares, final endorsement may be effected in accordance with Articles 15(1) and 15(3) of Royal Decree no. 239 of 29 March 1942. Article 80, subsections 4, 5, 6, 7, 8 and 10 shall apply316 .
1-bis. The Bank of Italy, in agreement with Consob, shall determine:
a) the financial resources of the management company;
b) the activities related and instrumental to clearing and settlement;
c) the company’s organisation requirements;
d) general criteria for the admission, exclusion and suspension of participants;
e) the general criteria based on which the management company may directly participate in foreign clearing and settlement systems317 .
1-ter. Access to the clearing and settlement service, and to the gross settlement service, of transactions on non-derivative financial instruments shall be subordinate to non-discriminatory, transparent and objective criteria318 .
2. The Bank of Italy, in agreement with Consob, may regulate the establishment and operation of systems to ensure the clearing and settlement of transactions referred to in subsection 1 and may issue instructions concerning the establishment and administration of guarantee funds financed with contributions from investors319 .
3. Article 68(2) shall apply to the guarantee funds referred to in subsection 2.
Article 70
Clearing and settlement of transactions involving financial instruments320
1. The Bank of Italy, in agreement with Consob, may regulate the operation of clearing and settlement systems for transactions involving financial instruments and may require that investors make margin payments or other collateral arrangements as a guarantee of performance of the obligations deriving from investment in such systems321 . Such guarantees may not be used for other purposes or be subject to enforcement proceedings or precautionary measures advanced by the creditors of individual participants or the operator of the system, including in cases where bankruptcy proceedings have been initiated. The guarantees obtained may be used in only accordance with rules subject to the provisions of this subsection. Article 80, subsections 4, 5, 6, 7, 8 and 10 shall apply322 .
1-bis. The Bank of Italy, in agreement with Consob, shall determine:
a) the financial resources of managers of clearing and guarantee systems;
b) the system manager’s organisation requirements;
c) general criteria for the admission, exclusion and suspension of participants;
d) the general criteria based on which the system manager may directly participate in foreign clearing and settlement systems323 .
2. The bodies that administer the systems referred to in subsection 1 shall assume the contractual positions to be settled.
2-bis. Access to clearing and guarantee systems for transactions on financial instruments is subordinate to non-discriminatory, transparent and objective criteria324 .
Article 70-bis
Access to guarantee, clearing and settlement systems for transactions on financial instruments
1. EU investment companies and banks authorised to provide investment services and activities may access the guarantee, clearing and settlement systems pursuant to articles 68, 69 and 70 in order to finalise or arrange the finalisation of transactions on financial instruments.
2. The management company shall guarantee the right of participants in the markets regulated to designate a clearing and settlement system for transactions on financial instruments executed on said markets, other than that designated by the market, provided the following conditions are observed:
a) links and devices exist between the designated clearing and settlement system and the regulated market structure to guarantee effective and economic transactions;
b) recognition by Consob that the technical conditions for the settlement of transactions concluded on a regulated market through a system other than that designated by the market allow regular and orderly market operations. In cases of regulated stock exchange companies for the wholesale trading of government securities, said recognition is confirmed by the Bank of Italy.
3. Stock exchange companies shall inform Consob of the designations of market participants pursuant to subsection 2. Such notifications shall be issued to the Bank of Italy in the case of wholesale government security markets.
4. Recognition pursuant to subsection 2, paragraph b) shall be confirmed after consulting the Bank of Italy in cases of regulated stock exchange companies for the wholesale trading of private and public bonds, other than government securities, together with regulated stock exchange companies for instruments pursuant to article 1, subsection 2, paragraph d) and derivatives on public securities, interest rates and currency325 .
Article 70-ter
Agreements between guarantee, clearing and settlement systems for regulated markets
1. Regulated stock exchange companies may conclude agreements with central counterparty system management companies, clearing and settlement systems of other EU member states for the guarantee, clearance and settlement of certain or all transactions concluded on regulated markets by investors.
2. In agreement with the Bank of Italy, Consob may oppose the agreements pursuant to subsection 1 if, when also taking into account the conditions envisaged in article 70-bis, subsection 2, this is necessary to preserve the orderly operation of the regulated market. For this purpose, in agreement with the Bank of Italy, Consob shall regulate the reporting obligations of stock exchange companies at the time of conclusion of the agreements pursuant to subsection 1326 .
3. The measures pursuant to subsection 2 shall be adopted by the Bank of Italy, in agreement with Consob, for wholesale markets of government securities327 .
Article 71
Finality of settlement of transactions involving financial instruments
[...omissis...]328
Article 72
Regulation of market insolvencies
1. The market insolvency of persons admitted to trading in regulated markets and the participants in the services referred to in Article 69 and the systems referred to in Article 70 shall be declared by Consob. The declaration of market insolvency shall determine the immediate liquidation of the contracts of the insolvent person.
2. Consob, in agreement with the Bank of Italy, shall by regulation establish cases of non-performance and other circumstances constituting market insolvency, together with the method for ascertaining and liquidating the insolvency329 .
3. The liquidation of market insolvencies shall be carried out by one or more liquidators appointed by Consob in agreement with the Bank of Italy. The emoluments due to liquidators shall be determined by Consob and charged to the stock exchange companies of markets in which the insolvent undertaking invested on the basis of criteria established by Consob in agreement with the Bank of Italy330 .
4. The liquidators shall have the power to carry out all the acts required to liquidate the insolvency and may obtain information from market participants and the managers of market services.
5. Upon the closure of the liquidation procedure, the liquidators shall issue a credit certificate to claimants for residual claims, including expenses incurred by the creditor, which shall give title to enforce the claim on the insolvent for the purposes of Article 474 of the Code of Civil Procedure.
6. The liquidation of market insolvencies shall be subject, where the conditions are satisfied, to the provisions of the legislative decree implementing Directive 98/26/EC of the European Parliament and of the Council of 19 May 1998 on settlement finality in payment and securities settlement systems.331
Article 73
Supervision of stock exchange companies
1. Stock exchange companies shall be subject to supervision by Consob, which for this purpose shall exercise the powers conferred by articles 74, subsection 2, and 187-octies332 .
2. Consob shall enter stock exchange companies in a register.
3. Consob shall verify that amendments to the Articles of Association of stock exchange companies do not conflict with the requirements referred to in Article 61. Procedures for entry in the Company Register may not be initiated in the absence of such verification.
4. Consob shall check that market rules are suitable to ensure that market transparency, orderly trading, and investor protection are effectively achieved and may require stock exchange companies to amend market rules to eliminate any problems it finds 333 .
Article 74
Supervision of markets
1. Consob shall supervise regulated markets with the aim of ensuring the transparency of the market, the orderly conduct of trading and the protection of investors, and may adopt any measure to guarantee observance of the obligations envisaged in this Chapter. For this purpose, for operators permitted to trade on regulated markets, other than authorised persons, articles 8 subsection 1 and 10 subsection 1 shall apply334 .
1-bis. Consob shall check stock exchange companies’ compliance with the market rules for financial instruments referred to in Article 64(1-ter).335
2. Consob may require stock exchange companies to communicate data and information and to transmit documents and records on a periodic or other basis in the manner and within its established time limits; it may also carry out inspections of such companies and require the exhibition of documents and the adoption of measures deemed necessary336 .
3. In cases of necessity and as a matter of urgency Consob shall adopt the measures required for the purposes referred to in subsection 1, including its acting in the place of the stock exchange company.
4. The measures referred to in subsection 3 may be adopted by the Chairman of Consob or his substitute in the event of his absence or disability to act. They shall be immediately enforceable and submitted to the Commission for it to approve within five days, the effect of such measures shall cease if they are not approved within this time limit.
4-bis. Consob may exercise additional powers pursuant to article 187-octies337 .
Article 75
Extraordinary measures to protect the market and stock exchange company crises
1. In the event of serious irregularities in the management of markets or in the administration of stock exchange companies and wherever it is necessary for the protection of investors, the Ministry of the Economy and Finance,338 acting on a proposal from Consob, shall dissolve the administrative and control bodies of the stock exchange company. The powers of the dissolved administrative bodies shall be conferred on a special administrator appointed in the same decree, who shall exercise them, in accordance with directives issued by Consob and under its control, until the administrative bodies are reconstituted. The emoluments due to the special administrator shall be determined with a decree of the Ministry and shall be charged to the stock exchange company. Where not otherwise provided for in this subsection, Article 70(2-6), Article 72, except for subsections 2 and 8, and Article 75 of the Consolidated Law on Banking shall apply, with Consob being assigned the powers attributed therein to the Bank of Italy.
2. Consob may cancel the authorisation pursuant to article 63 when:
a) the management company fails to make use of the authorisation within twelve months or expressly waives the use thereof;
b) the management company or regulated market ceased to operate more than six months previously;
c) the management company obtained authorisation through false declaration or any other irregular means;
d) the management company or regulated market no longer satisfies the conditions required for the authorisation;
e) the management company has seriously and systematically violated the provisions of this Chapter339.
2-bis. The procedures pursuant to subsection 1 may determine cancellation of the authorisation referred to in subsection 2340 .
3. Within thirty days of the notification of the order revoking authorisation, the directors or the special administrator shall call the shareholders' meeting to modify the corporate purpose or adopt a resolution for the voluntary liquidation of the company. Where the meeting is not called within such time limit or the meeting does not adopt the resolution within three months of the notification of the revocation order, the Ministry of the Economy and Finance,341 acting on a proposal from Consob, may dissolve the stock exchange company and appoint liquidators. The provisions concerning the liquidation of società per azioni shall apply, except for those concerning the revocation of liquidators.
4. In the cases referred to in subsections 1 and 2, Consob shall promote the agreements needed to ensure the continuity of trading. For this purpose it may arrange for the temporary transfer of the management of the market to another company, subject to that company's consent. The definitive transfer of the management of the market may be effected by way of derogation from Title II, Chapter VI, of the Bankruptcy Law.
5. The proposals referred to in the previous subsections shall be formulated by Consob, after consulting the Bank of Italy, for stock exchange companies of markets for wholesale trading of private and public sector bonds other than government securities and markets for the trading of instruments referred to in Article l(2) paragraph b), and financial derivatives based on government securities, interest rates and foreign currencies342 .
6. Actions for the purpose of initiating bankruptcy proceedings, compositions with creditors or controlled administration and the related measures adopted by the court shall be notified to Consob within three days by the clerk of the court.
Article 76
Supervision of wholesale markets in government securities
1. Without prejudice to the responsibilities of Consob set out in this decree, the Bank of Italy shall supervise the wholesale markets in government securities, having regard to the overall efficiency of the market and the orderly conduct of trading. For operators permitted to trade on markets for the wholesale trading of government securities, other than authorised persons, articles 8 subsection 1 and 10 subsection 1 shall apply343 .
2-bis. The Bank of Italy, under the terms and conditions it has established, may request data, information, records and documents from the stock exchange companies, may perform inspections on the companies, may request sight of documents and complete records as deemed necessary. Said powers may also be exercised with regard to other persons involved in the management company activities. For this purpose, the Bank of Italy may also call personal hearings. The Bank of Italy may authorise auditors or technical experts to perform inspections of the management company. Any related costs shall be borne by the company inspected344 .
2-ter. In cases of need and emergency, for the purposes of subsection 1, the Bank of Italy shall adopt any necessary measures, including replacement of the management company345 .
2-quater. For wholesale markets for government securities, Consob may exercise the powers pursuant to article 187-octies346 .
2. The Bank of Italy shall supervise the stock exchange companies of the wholesale markets in government securities; for this purpose it shall exercise the powers conferred in Article 74(2).
3. Article 75 shall apply. The Bank of Italy shall have the powers and duties attributed therein to Consob.
Article 77
Supervision of clearing, settlement and guarantee systems
1. The supervision of the systems referred to in Articles 68, 69 and 70, of the persons that administer such systems shall be carried out by the Bank of Italy, as regards stability and systemic risk containment, and Consob, as regards transparency and investor protection. To this end, the Bank of Italy and Consob may require system managers and intermediaries to provide information and records, periodically or otherwise, concerning the clearing, settlement and guarantee of transactions and may carry out inspections.
2. In cases of necessity and as a matter of urgency, for the purposes referred to in subsection 1, the Bank of Italy shall adopt appropriate measures, including its acting in the place of the managers of the systems and services referred to in Articles 69 and 70.
3. For managers of the systems and services pursuant to articles 68, 69 and 70, article 83 shall apply347 .
Chapter II
Unregulated markets348
Article 77-bis
Multilateral trading systems
1. By its own regulation, Consob shall identify the minimum operating requirements for multilateral trading systems, including obligations of their managers with regard to:
a) the trading and finalisation processes of transactions;
b) the admission of financial instruments;
c) information provided to the public and to users;
d) access to the system;
e) monitoring of the observance of system rules by users349 .
2. Consob:
a) may request managers of multilateral trading systems to exclude or suspend financial instruments from trading on said systems;
b) may request managers of multilateral trading systems for all information deemed useful for the purposes of paragraph a);
c) at the time of authorisation and continuously thereafter, shall supervise the rules and procedures adopted by multilateral trading systems to confirm their compliance with European provisions.
3. Unless damage may be caused to the interests of investors or to regular market operations, Consob shall request the suspension or exclusion of a financial instrument from trading on multilateral trading systems in cases where said financial instrument was admitted to trading on a regulated market and was subject to a suspension or exclusion measure by the competent authorities of other EU member states.
4. For the guarantee, clearing and settlement systems of multilateral trading systems, article 70-ter, subsections 1 and 2 shall apply.
5. For operators permitted to trade on markets for the wholesale trading of government securities, other than authorised persons, articles 8 subsection 1 and 10 subsection 1 shall apply.
6. The measures pursuant to subsection 1 shall be adopted by Consob, after consulting the Bank of Italy, with regard to systems for the wholesale trading of private and public bonds, other than government securities, securities normally traded on the money market, derivatives on public securities, interest rates and currency, and shall be adopted by the Ministry of Economy and Finance, after consulting the Bank of Italy and Consob, with regard to systems for the wholesale trading of government securities. For the latter, activities pursuant to subsections 2 and 3 shall be performed by the Bank of Italy, after consulting Consob350 .
Article 78
Systematic internalisers
1. Consob may request that systematic internalisers exclude or suspend from trading financial instruments admitted to trading on regulated markets for which they prove to be the systematic internalisers.
2. Consob shall regulate the criteria for identification of the systematic internalisers and their obligations with regard to the publication of listings, execution of orders and access to listings351 .
Article 79
Multilateral systems for the exchange of money deposits in euro
1. The Bank of Italy shall supervise the efficiency and regular operations of multilateral systems for the exchange of money deposits in euro, and their managers.
2. The Bank of Italy, under the terms and conditions it has established, may also request periodic reports to include data, information, records and documents from managers and operators. The Bank of Italy may also perform inspections of said managers, request sight of documents and complete records as deemed necessary. Said powers may also be exercised with regard to other persons involved in the activities of the authorised person. For this purpose, the Bank of Italy may also call personal hearings. The Bank of Italy may authorise auditors or technical experts to perform inspections of said managers. Any related costs shall be borne by the person inspected.
3. Managers of multilateral systems for the exchange of money deposits in euro may also manage multilateral trading systems for derivatives on interest rates and currency.
4. For exchanges pursuant to subsection 1, article 77-bis shall not apply352 .
Chapter II-bis353
Common provisions
Article 79-bis
Transparency requirements
1. In order to guarantee the effective integration of markets and stronger effectiveness of the price formation process, Consob shall regulate:
a) pre-trading transparency for transactions on shares admitted to trading on regulated markets and executed on said markets within multilateral trading systems and systematic internalisers;
b) post-trading transparency for transactions on shares admitted to trading on regulated markets and executed on said markets within multilateral trading systems and by authorised persons354 .
2. Where necessary to guarantee orderly trading and investor protection, Consob may extend, wholly or in part, the pre- and post-trading transparency applicable to transactions on financial instruments other than shares admitted to trading on regulated markets.
3. The provisions pursuant to subsection 2 shall be adopted by Consob, after consulting the Bank of Italy, with regard to the wholesale trading of private and public bonds, other than government securities, securities normally traded on the money market, derivatives on public securities, interest rates and currency, and shall be adopted by the Ministry of Economy and Finance, after consulting the Bank of Italy and Consob, with regard to the wholesale trading of government securities355 .
4. Consob shall regulate the management of customer limit orders on shares admitted to trading on a regulated market356 .
Article 79-ter
Consolidation of information
1. In order to guarantee that market operators and investors may compare prices made public by regulated markets, multilateral trading systems and authorised persons in accordance with obligations, Consob, after consulting the Bank of Italy, may under its own regulation identify measures to eliminate impediments to the consolidation of information and related publication357 .
TITLE II358
CENTRAL DEPOSITORY SYSTEM FOR FINANCIAL INSTRUMENTS
Article 79-quater
Definitions
1. For the purpose of this Title, “intermediaries” shall mean persons identified by the regulation referred to in Article 81 subsection 1, authorised to keep records of the registration of financial instruments and related transfers.
Chapter I
Regulations for central depositories
Article 80
Central depository activities in relation to financial instruments
1. Central depositories of financial instruments take the legal and operating format of a joint stock company, also as a non-profit organisation.
2. The sole corporate purpose of a central depository is to act as a central depository for financial instruments pursuant to Chapter II of this Title. Related and instrumental activities may also be performed.
3. By regulation and in agreement with the Bank of Italy, Consob shall establish the financial resources and organisational requirements of the companies and related and instrumental activities, which in any event shall not include representation at shareholders' meetings of listed joint-stock companies.
4. After consulting the Bank of Italy and Consob, the Minister of the Economy and Finance shall issue a regulation establishing the integrity, professionality and independence requirements of persons performing director, management and control duties in such companies. Article 13, subsections 2 and 3 shall apply.
5. The regulation envisaged in subsection 4 shall establish the causes for temporary suspension from office and its duration. Article 13, subsections 2 and 3 shall apply.
6. By regulation adopted after consulting Consob and the Bank of Italy, the Minister of the Economy and Finance shall establish the integrity requirements of shareholders, identifying the investment threshold considered significant for this purpose.
7. The direct or indirect purchase and disposal of significant investments pursuant to subsection 6, also through subsidiaries, trusts or third parties, must be disclosed by the buyer to Consob, the Bank of Italy and the central depository within twenty-four hours, together with documents confirming the buyer’s possession of the requirements established pursuant to subsection 6.
8. Where such requirements are not possessed or in the event of non-disclosure, voting rights associated with shares exceeding the threshold established pursuant to subsection 6 may not be exercised. In the event of failure to comply with the prohibition, Article 14, subsections 5 and 6 shall apply.
9. In agreement with the Bank of Italy, Consob shall authorise the company to perform central depository activities for financial instruments when the requirements envisaged in subsections 1, 2, 3, 4, 5 and 6 are met, and the services regulation pursuant to Article 81, subsection 2 complies with the provisions of this Title and related enactment regulations.
10. Article 155 subsection 2, Article 156 subsection 4 and Article 159 subsection 1 shall apply to central depositories.
Article 81
Enactment regulation and service regulations
1. By regulation and in agreement with the Bank of Italy, Consob shall identify:
a) the requirements that must be met by intermediaries and the activities envisaged under this Title that intermediaries are authorised to perform;
b) the financial instruments admitted to the central depository system;
c) the public distribution characteristics of financial instruments pursuant to Article 83-bis, subsection 2 for the purpose of their being subject to the provisions of this Title;
d) the procedures and methods by which financial instruments are subject to or detracted from the provisions of this Title, depending on related requirements being met or ceasing to be met;
e) the minimum content necessary for the contract to be stipulated between the central depository and the issuer or intermediary;
f) the technical characteristics and content of the records and accounts opened with the central depository and the intermediary;
g) the formats and methods that central depositories must adopt for account and record keeping, in compliance with the principle of segregation of their own accounts from those in the name of individual intermediaries;
h) the formats and methods that intermediaries must adopt for account and record keeping, in compliance with the principle of segregation of their own accounts from those in the name of individual account holders;
i) the methods by which the central depository must guarantee constant correspondence between the balances of issuer accounts and intermediary accounts, and related disclosures;
l) the methods by which intermediaries must guarantee constant correspondence between the balances of their accounts held with the central depository and their own and customer accounts;
m) without prejudice to the provisions of Article 83-sexies, subsection 4, the forms, models, terms, the intermediary responsible for issue and cancellation of certificates, and the issue and correction of disclosures envisaged, respectively, in Article 83-quinquies subsection 3 and Article 83-sexies;
n) the criteria and methods for performing the activities specified in Article 83-octies;
o) the deadlines by which intermediaries and central depositories must comply with disclosure obligations to issuers of the names of entitled shareholders and registrations under the terms of Article 83-octies, pursuant to Article 83-novies, subsection 1, paragraphs d), e), f) and g), and Article 89, respectively;
p) additional provisions necessary for implementation of the provisions of this Title and others in any event required to ensure central depository system transparency and the regular provision of services.
2. The central depository shall adopt a services regulation indicating the services provided, the provision methods, criteria for admission to the central depository of persons and financial instruments, based on non-discriminatory, transparent and objective criteria. The services regulation shall be approved by Consob in agreement with the Bank of Italy. Consob, in agreement with the Bank of Italy, may establish that the fees for services provided by central depositories and fees requested by intermediaries for the certification, disclosure and reporting services envisaged in Chapter II of this Title shall be subject to Consob approval.
2-bis. The regulation envisaged in subsection 1 may refer the provisions for certain matters which, pursuant to subsection 1 or other provisions of this Title, are subject to Consob supervision in agreement with the Bank of Italy, to the services regulation.
Article 81-bis
Access to the central depository system
1. EU investment companies and banks authorised for investment services or activities may access the central depository system.
Article 82
Supervision
1. Supervision of central depositories shall be performed by Consob, in order to ensure transparency and investor protection, and by the Bank of Italy with regard to system stability and risk containment. Consob and the Bank of Italy may call upon such companies to submit data, information, papers and documents, also on a periodic basis, may perform inspections, request the exhibition of documents and that other action be taken as deemed necessary, indicating the related terms and conditions.
2. Consob and the Bank of Italy shall perform monitoring until the services regulation of the central depository is suitable to ensure actual achievement of the objectives indicated in subsection 1, and may request that the company amends the services regulation in a manner appropriate to eliminating any malfunction encountered.
Article 83
Central depositories in crisis
1. Should serious irregularities be ascertained, on recommendation from Consob or the Bank of Italy and by decree published in the Official Gazette, the Ministry of the Economy and Finance may order that the boards of directors of central depositories be disbanded. By such a decree one or more special commissioners are appointed for administration of the company and the fees payable to such commissioners, borne by the company, are established. Article 70 subsections 2 to 6, Article 72 except subsections 2 and 8, and Article 75 of the Consolidated Law on Banking shall apply, the Bank of Italy’s powers being deemed attributed to the authority proposing the order.
1-bis. Should exceptionally serious irregularities be ascertained, in agreement with the Bank of Italy Consob may order cancellation of the authorisation referred to in Article 80, subsection 9.
2. If a central depository is declared insolvent pursuant to Article 195 of the Bankruptcy Act, or authorisation is cancelled pursuant to subsection 1-bis, the Minister of the Economy and Finance shall issue a decree ordering that the company be placed under compulsory administrative liquidation excluding bankruptcy, in accordance with the provisions of Article 80 subsections 3, 4, 5 and 6, Articles 81 to 83, Article 84 except subsection 2, and Articles 85 to 94 of the Consolidated Law on Banking, to the extent they may be compatible.
Chapter II
Central depository system regulations
Section I
Central depository system for dematerialisation
Article 83-bis
Scope of application
1. Financial instruments traded or due to be traded on Italian regulated markets may not be represented by securities pursuant to the provisions of Title V, Book IV of the Civil Code.
2. Based on their distribution among the public, the regulation referred to in Article 81, subsection 1 may also envisage that financial instruments without the characteristics indicated in subsection 1 be subject to the provisions of this section.
3. The issuer of financial instruments may subject them to the provisions of this section.
Article 83-ter
The central depository system
1. For each issue of financial instruments subject to the provisions of this section, a single central depository must be selected. This issue shall inform the central depository of the total value of the financial instruments issue, its composition and any other characteristics required under the regulation indicated in Article 81, subsection 1. For each issue the central depository system shall open an account in the name of the issuer.
Article 83-quater
Central depository and intermediary duties
1. Transfer of financial instruments subject to the provisions of this section, and the exercise of related ownership rights, may only be performed through intermediaries.
2. On request, the central depository shall open an account for each intermediary to record movements of the financial instruments deposited on that account.
3. For each financial instruments account holder, the intermediary, if appointed to perform this service, shall on each account – strictly separated by account holder and separate from any account in the intermediary's own name – record the financial instruments held, their transfer, the rights exercised and restrictions pursuant to Article 83-octies, as instructed by the owner or on their behalf. In all other circumstances the intermediary shall, for subsequent duties, inform the intermediary with whom the owner has opened an account of the transfer action taken. Registration of the transfers shall be performed by the intermediaries on settlement of the related transactions.
4. The registrations and disclosures prescribed by current regulations envisaging numeric identification of certificates shall indicate the type and quantity of instruments concerned.
Article 83-quinquies
Rights of the account holder
1. After registration, the account holder indicated in Article 83-quater, subsection 3 shall legitimately have full and exclusive exercise of rights pertaining to the financial instruments registered on that account, in accordance with their individual regulations and the provisions of this Title. The account holder may dispose of financial instruments registered to the account in compliance with current regulations on such matters.
2. Any person for whom registration is performed on his or her behalf, based on entitlement and in good faith, shall not liable for claims or action taken by previous owners.
3. Unless otherwise envisaged in Article 83-sexies, the legitimate exercise of rights indicated in subsection 1 shall be confirmed by showing the certificates issued by intermediaries in compliance with their account records, bearing an indication of the voting rights exercisable. Certificates shall not confer rights other than those legitimised as above. Disposition instructions given in relation to the aforementioned certificates shall be null and void.
4. More than one certificate may not be issued for the same financial instruments for the purpose of legitimising exercise of the same rights.
Article 83-sexies
Right to attend shareholders' meetings and the exercise of voting rights
1. The legitimate attendance of shareholders' meetings and the exercise of voting rights is confirmed by a statement to the issuer from the intermediary, in compliance with intermediary accounting records, on behalf of the person with the right to vote.
2. In Italian companies with shares admitted to trading on regulated markets or multilateral trading systems in Italy or other EU countries with the consent of the issuer, the statement envisaged in subsection 1 shall be issued by the intermediary on the basis of balances recorded at the end of the seventh trading day prior to the date of the shareholders’ meeting on first or single call. Credit and debit records entered on accounts after this deadline shall not be considered for the purpose of legitimising the exercise of voting rights at the shareholders’ meeting.
3. The Articles of Association of companies other than those indicated in subsection 2 may specify that shares included in the statement must be registered on the account of the person with voting rights by a given deadline, and may envisage that such shares cannot be transferred until closure of the shareholders' meeting. For companies with widely-distributed shares the aforementioned deadline may not exceed two business days. Where the Articles of Association do not inhibit disposal of the shares, for any such disposal the intermediary shall be obliged to correct the previous statement issued.
4. The statements indicated in subsection 1 must reach the issuer by the end of the third trading day prior to the date of the shareholders’ meeting on first call, or other deadline established by Consob regulation issued in agreement with the Bank of Italy, or by the later deadline established in the Articles of Association of companies referred to in subsection 3. It remains implicit that the right to attend and vote shall be legitimate if the statements are received by the issuer after the deadlines indicated in this subsection, provided they are received before the opening of a shareholders’ meeting on single call.
5. Subsections 1, 3 and 4 shall apply to cooperatives. For cooperatives with shares admitted to trading on regulated markets or multilateral trading systems in Italy or other EU countries with the consent of the issuer, the time limit referred to in subsection 3 cannot exceed two business days359.
Article 83-septies
Opposable exceptions
1. On exercise of the rights attached to financial instruments by the person on whose behalf the registration was completed, he issuer may only oppose exceptions personal to the individual in question and those common to all other holders of the same rights.
Article 83-octies
Establishing restrictions
1. Restrictions of any kind on financial instruments governed by this section, including restrictions envisaged under special regulations on public debt securities, may be established only by registration in a special account held by the intermediary.
2. Specific accounts may be opened to allow restrictions to be established on all financial instruments registered to that account. In such cases the intermediary shall be responsible for complying with instructions received at the time the restriction is established in relation to preserving intact the value of the restriction and the exercise of rights attached to the financial instruments affected.
Article 83-novies
Duties of the intermediary
1. The intermediary:
a) in the name of and on behalf of the account holder, shall exercise rights attached to the financial instruments, provided the account holder has conferred mandate to do so;
b) at the request of the interested party, shall issue the certificates referred to in Article 83-quinquies, subsection 3, when necessary for the exercise of rights attached to the financial instruments;
c) at the request of the interested party, shall issue the statements envisaged in Article 83-sexies. The request may be made with reference to all shareholders’ meetings of one or more issuers, until otherwise instructed. In such cases, the intermediary shall make all due arrangements without the need for further statement issue requests;
d) shall inform the issuer of the names of persons requesting certificates envisaged in Article 83-quinquies, subsection 5, together with the names of persons that have received dividends and those who, exercising option rights or other rights, have acquired ownership of registered financial instruments, specifying the related quantity so that issuer obligations may be met;
e) at the request of the interested party or where envisaged under current regulations, shall also inform the issuer of the names of persons with rights on the financial instruments so that issuer obligations may be met;
f) if the persons with rights on the financial instruments are not the persons requesting certificates or are persons on whose behalf statements have been issued for attendance at shareholders' meetings, shall inform the issuer of the names of such persons so that issuer obligations may be met;
g) in cases in which statements pursuant to paragraph c) and reports pursuant to paragraphs d), e) and f) have been issued, shall inform the issuer of registrations performed in accordance with Article 83-octies.
2. The deposit of certificates issued by the intermediary shall, to all effect and purpose of the law, replace deposit of the security as envisaged under current regulations.
3. The obligation to issue certificates shall also apply in reference to financial instruments not admitted to the central depository system pursuant to Chapter I and which are registered on intermediary accounts.
Article 83-decies
Intermediary liability
1. The intermediary shall be liable:
a) to the account holder for damages deriving from the transfer of financial instruments performed on the account holder’s behalf, for correct record-keeping and prompt compliance with obligations under the terms of this decree and the regulation referred to in Article 81, subsection 1;
b) to the issuer for compliance with disclosure and reporting obligations imposed by this decree and by the regulation referred to in Article 81, subsection 1.
Article 83-undecies
Issuer obligations
1. The issuers of shares shall update the shareholders’ register in compliance with statements and reports submitted by intermediaries pursuant to Article 83-novies, subsection 1, paragraphs b), c), d), e) and f) and Article 83-duodecies, within thirty days of their receipt.
2. Without prejudice to Article 2421 of the Civil Code, even if the shareholders’ register is not set up or maintained by electronic means, the results of that shareholders’ register shall be made available to shareholders, on request, also on electronic support media.
3. The provisions regarding cooperatives’ annotation of the shareholders’ register remain valid.
4. All of the above without prejudice to the provisions of Article 7, Law no. 1745 of 29 December 1962.
Article 83-duodecies
Shareholder identification
1. Where envisaged in the Articles of Association, Italian companies with shares admitted to trading on regulated markets or multilateral trading systems in Italy or other EU countries with the consent of the issuer, may at any time and at their own expense call upon intermediaries – through a central depository – to provide data identifying shareholders that have not specifically denied consent to such disclosures, together with the number of shares registered on accounts in their names.
2. The disclosures referred to in subsection 1 must reach the issuer within ten trading days of the date of the request, or other deadline established by Consob by regulation issued in agreement with the Bank of Italy.
3. Where the Articles of Association envisage the option indicated in subsection 1, the company shall make the same request if asked to do so by a number of shareholders representing half the minimum investment established by Consob pursuant to Article 147-ter, subsection 1. The related costs shall be divided between the company and the shareholders concerned according to criteria established by Consob regulation, with due regard to the requirement not to encourage the use of this tool by shareholders for purposes not consistent with the aim of facilitating coordination between such shareholders for the exercise of rights calling for a professional investment360.
4. In accordance with the terms and conditions of Article 114, subsection 1, companies shall publish a disclosure confirming that a request for identification has been made, providing reasons if the request is made pursuant to subsection 1, or the identity and total investment of requesting shareholders for requests made pursuant to subsection 3. The data received shall be made available to shareholders free of charge, without prejudice to the obligation to update the shareholders’ register.
5. This article shall not apply to cooperatives.
Section II
Central depository system for financial instruments in the form of securities
Article 85
Central deposits
1. Where financial instruments consigned to the central system are represented physically by securities, the performance and the effects of central depository activity shall be governed by this section. Unless otherwise envisaged in this section, Articles 83-ter to 83-undecies shall apply.
2. The clause of the deposit contract concluded with intermediaries identified in the regulation pursuant to Article 81, subsection 1, referring to financial instruments identified in the that regulation, which authorises the depositary to subdeposit the financial instruments with a central depository must be approved in writing. In exercising such authority, depositaries shall have all the necessary powers, including that of endorsement to the central depository where the financial instruments in question are registered. Deposit may be performed directly by the issuer.
3. Financial instruments shall be consigned to the central systems as a non-fungible deposit. The central depository shall be authorised to carry out all transactions inherent to central depository activity in compliance with the regulation referred to in Article 81(2), and to take action as necessary following the destruction, loss or theft of the financial instruments.
Article 86
Transfer of rights attached to financial instruments on deposit
1. The person depositing financial instruments admitted to the system may, through the depositary and in accordance with the methods indicated in the services regulation envisaged in Article 81, subsection 2, request delivery of a corresponding quantity of financial instruments of the same type on deposit with the central depository.
2. The owner of financial instruments admitted to the system shall assume all rights and obligations deriving from the deposit should it be proved that the person depositing the instruments was not entitled to do so.
Article 87
Restrictions on centrally deposited financial instruments
1. Restrictions on financial instruments admitted to the system shall be transferred as-is to the rights of the depositing party, with endorsement to the central depository. Annotations of restrictions on the certificates shall have no effect, and this shall be stated on the instrument.
2. In the event of withdrawal of financial instruments from the system, the depositary shall annotate the restrictions on the related certificates with an indication of the date on which they were established.
3. In the event of seizure of financial instruments admitted to the system, formalities regarding co-owner obligations as envisaged in Articles 599 and 600 of the Italian Code of Civil Procedure shall be completed on behalf of the depositaries.
Article 88
Withdrawal of centrally deposited financial instruments
1. The central depositary shall make any financial instruments subject to a withdrawal request available to the depositary. Registered financial instruments shall be endorsed in the name of the depositary, who shall complete the endorsement with the name of the endorsee. Completion of the endorsement shall be validated with the stamp, date and signature of the depositary.
2. The central depository may authenticate the endorsing signature also when endorsed in its own favour. The central depository signature affixed to the instrument as endorsing party does not require authentication. The endorsement and registration in the name of the central depository of financial instruments to be admitted to the system shall specifically mention this decree.
Article 89
Updating of the shareholders’ register
1. For the purpose of updating the shareholders’ register, the central depository shall inform issuers of registered shares endorsed in its favour.
Chapter III
Central depository regulations for government securities
Article 90
Central deposit of government securities
1. The Minister of the Economy and Finance shall issue a regulation on the central deposit of government securities, indicating related operating criteria and the methods for identifying central depositories of government securities. Unless otherwise envisaged in the regulations issued pursuant to this article, Chapter I and Chapter II, Articles 83-bis to 83-decies shall apply.
PART IV
REGULATION OF ISSUERS
TITLE I
GENERAL PROVISIONS
Article 91
Consob's powers
1. Consob shall exercise the powers provided for in this Part having regard to the protection of investors and the efficiency and transparency of the market in corporate control and the capital market.
Article 92
(Equal treatment)
1. Listed issuers and listed issuers with Italy as their home Member State shall guarantee the same treatment and with identical terms and conditions to all holders of the listed financial instruments.
2. Listed issuers and listed issuers with Italy as their home Member State shall guarantee the instruments and information necessary for the exercise of rights to all holders of the listed financial instruments.
3. By regulation and in compliance with EU law, Consob shall dictate the enactment provisions pursuant to subsection 2, also envisaging the option to use electronic information transmission media361 .
Article 93
Definition of control
1. In this part, in addition to the companies indicated in paragraphs 1 and 2 of the first subsection of Article 2359 of the Civil Code, the following shall also be considered subsidiaries:
a) Italian and foreign companies over which a person has the right, by virtue of a contract or a clause in the instrument of incorporation, to exercise a dominant influence, where the applicable law permits such contracts or clauses,
b) Italian and foreign companies where a shareholder controls alone, on the basis of agreements with other shareholders, enough votes to exercise a dominant influence in the ordinary shareholders' meeting.
2. For the purposes of subsection 1, rights held by subsidiaries or exercised through trustees or nominees shall be considered, those held on behalf of third parties shall not be considered.
TITLE II
SOLICITATION OF PUBLIC SAVINGS
Chapter I362
Public offerings
Article 93-bis363
Definitions
1. In this Chapter:
a) "EU financial instruments" shall mean: securities and units of closed-end funds364 ;
b) “equity securities” shall mean: shares and other tradable instruments equivalent to shares in companies and any other type of tradable EU financial instrument conferring the right to purchase the aforementioned instruments by conversion or the exercise of options, provided that such instruments are issued by the issuer of the underlying shares or by a member of the same group as that of the issuer;
c) “instruments other than equity securities” shall mean: all EU financial instruments that are not equity securities;
d) “open-end UCITS units and shares" shall mean: units of an open-end mutual investment fund and shares in an investment company with floating capital;
e) “global organiser” shall mean: the person organising and establishing the placement syndicate, the placement coordinator or sole placement agent;
f) “home member state” shall mean:
1) for all EU issuers of financial instruments not mentioned under subparagraph 2) below, the EU member state of the issuer's registered office;
2) for the issue of EU financial instruments other than equity securities, the nominal unit value of which is at least 1,000 euro and for the issue of EU financial instruments other than equity securities with options to purchase tradable securities or receive a cash amount through the conversion or exercise of options conferred, provided that the issuer of EU financial instruments other than equity securities is not the issuer of the underlying EU financial instruments or a member of the issuer’s group, the EU member state of the issuer's registered office or in which the EU financial instruments have been or shall be destined for admission to trading on a regulated market or in which the EU financial instruments are offered to the public, as decided by the issuer, offeror or the person requesting the admission, as required. The same shall apply to EU financial instruments other than equity securities in a currency other than euro, provided that the minimum value of such currency shall be more or less equivalent to 1,000 euro;
3) for all issuers of EU financial instruments not mentioned under subparagraph 2) with registered office in another country, the EU member state in which the EU financial instruments are destined to be offered to the public for the first time after the entry into force of Directive 2003/71/EC or in which the first application for admission to trading on a regulated market was submitted as decided by the issuer, offeror or person requesting the admission, as required, except where issuers with registered office in another country should subsequently decide, if the home member state was not determined by their own choice;
g) “host member state” shall mean: the EU member state in which a public offering is implemented or where application to trading of EU financial instruments is made, if different from the home member state.
Section I
Public offering of EU financial instruments and financial products other than open-end UCITS units or shares
Article 94
Obligations of offerors
1. Persons who intend to make a public offering shall give advance notice thereof to Consob, attaching the prospectus to be published.
2. The prospectus shall contain the information that, depending on the characteristics of the financial products and the issuer, is necessary for investors to make an informed assessment of the issuer's assets and liabilities, profits and losses, financial position and prospects and of the financial products and related rights.
3. The prospectus for the public offering of EU financial instruments shall be drafted in compliance with models provided in EU regulations on this matter.
4. Offerors may request the issue of the authorisation referred to in subsection 3 in order to have the prospectus published in Italy recognized abroad.
5. Consob, taking account of the characteristics of individual markets, may, at the request of the stock exchange company, entrust such company with tasks concerning the examination of prospectuses for public offerings of financial instruments that are listed or the object of an application for admission to listing on a regulated market.
6. Where the offering relates to financial products other than EU financial instruments, the prospectus for which is not governed by article 95, subsection 1, paragraph b), Consob shall establish, on request from the issuer or offeror, the content of the prospectus.
7. Any new and significant fact or material error in relation to information contained in the prospectus and likely to influence the assessment of financial products, and which still exist or are discovered between the time of approval of the prospectus and the closing date of the public offering must be mentioned in a supplement to the prospectus.
8. The issuer, offeror or any guarantor, as applicable, or the persons responsible for the information contained in the prospectus, shall be liable, each in relation to the extent of their own duties, for damages caused to the investor placing reasonable faith in the truth and accuracy of information contained in the prospectus, unless it is proved that all due diligence was adopted for the purpose of guaranteeing that the information in question complied with the facts and that no information was omitted that could have altered the sense thereof.
9. The intermediary responsible for placement shall be liable for false information or omissions that could influence the reasoned decisions of an investor, unless said intermediary proves that all due diligence was adopted pursuant to the previous subsection.
10. No person may be held liable solely on the basis of the securities note, including any translation, unless the securities note proves misleading, inaccurate or inconsistent if read together with other parts of the prospectus.
11. Claims for compensation may be brought within five years of publication of the prospectus, unless the investor can prove having discovered the false nature of the information or omissions in the two years prior to the financial year in which such action is taken .
Article 94-bis
Approval of the prospectus
1. For approval purposes, Consob shall verify the accuracy of the prospectus, including the consistency and comprehensibility of the information contained therein 365 ..
2. Consob shall approve the prospectus according to their own terms established by regulation in compliance with EU regulations. Failure to issue decision by Consob by the established deadlines shall not constitute approval of the prospectus.
3. Also taking account the characteristics of individual markets, Consob, through special agreements, may assign tasks relating to control of the prospectus to the stock exchange company for offerings concerning financial instruments admitted for trading or involving the application for admission to listing on a regulated market, in observance of the principles established under EU regulations. In observance of the aforementioned principles and related exceptions, delegated tasks shall terminate by 31 December 2001. Consob shall inform the European Commission and the competent authorities of other EU member states on agreements relating to such delegated tasks, specifying the terms governing said delegation.
4. In order to ensure the efficiency of procedures for approval of a prospectus concerning banking debt securities for trading on a regulated market, Consob shall stipulate cooperation agreements with the Bank of Italy.
5. Where an offering concerns EU financial instruments, Consob may transfer approval of the prospectus to the competent authority of another EU member state, subject to acceptance by the latter. Said transfer shall be notified to the issuer and offeror within three working days of the decision taken by Consob. The approval deadlines shall commence from said date.
Article 95
Implementing provisions
1. Consob shall issue a regulation with provisions implementing this chapter, which may be differentiated according to the characteristics of the financial products, issuers and markets. The regulation shall establish in particular:
a) the content of the notice to be sent to Consob and of the prospectus and the procedures for publishing the prospectus and updating it where necessary;
b) the procedures to be observed before the publication of the prospectus for disseminating new information, carrying out market research and surveying intentions to buy or subscribe;
c) the procedures for making public offerings, inter alia with a view to ensuring the equal treatment of the persons solicited.
d) the implementation methods for the offering, also to guarantee equal treatment of the addressees;
e) the language used for the prospectus;
f) the conditions for the transfer of approval of a prospectus to the competent authority of another member state366 .
2. Consob shall lay down in a regulation the conduct-of-business rules to be observed by the offeror, the issuer and the person placing the financial products, as well as by persons in a control relationship with or related to such persons.367
3. Consob shall publish at least a list of prospectuses approved pursuant to article 94-bis on its Internet web site.
4. Consob shall determine which financial instruments or products, admitted for trading on regulated markets or widely distributed among the public pursuant to article 116 and identified by a particular denomination or on the basis of specific qualifying criteria, must have a typical determined content.
Article 95-bis
Cancellation of a purchase or subscription
1. Where the prospectus does not indicate the conditions or criteria based on which the final offer price and quantity of products concerned in the public offering are determined or, in relation to the price, the maximum price, acceptance of the purchase or subscription of financial products may be cancelled by the deadline indicated in the prospectus and in any event in a period of not less than two working days calculated from the date of filing of the final offer price and the quantity of financial products offered to the public.
2. Investors that have already agreed to purchase or subscribe to financial products prior to publication of a supplement shall have the right, for exercise by the deadline indicated in the supplement and in any event not less than two working days after said publication, to cancel their acceptance.
Article 96
Issuer financial statements
1. The most recent separate or consolidated financial statements prepared by the issuer shall be accompanied by audit reports in which a statutory auditor or independent statutory auditors entered in the register held by the Ministry of the Economy and Finance expresses their opinion. Any offering of financial products other than EU financial instruments cannot be made if the statutory auditor or independent statutory auditors express an adverse opinion or disclaimer368 .
Article 97
Information requirements
1. Without prejudice to Title III, Chapter I, in relation to public offerings, the related issuers, independent auditors, members of the issuer and offeror boards of directors and the intermediaries appointed as placing agents shall be subject to Articles 114(5) and 114(6) and to Article 115, from the date of the notice envisaged in Article 94, subsection 1.
2. Consob shall lay down in a regulation which of the provisions referred to in subsection 1 shall apply, for the same periods, to the other persons referred to in Article 95(2) and to persons who provide services referred to in Article 1(6)(e)369 .
3. Issuers shall submit any separate or consolidated financial statements approved or prepared during the offer period for the opinion of a statutory auditor or independent statutory auditor entered in the special register370.
4. Where there are grounds for suspected violation of the provisions of this Chapter or related enactment regulations, Consob, for the purpose of obtaining details, may within one year of the purchase or subscription request information and the submission of records and documents from the buyers or subscribers of the financial products referred to under this Section, establishing related deadlines. The power to request may also be exercised with regard to persons against whom there are no grounds for suspicion that they implement, or have implemented, a public offering in contravention of the provisions of article 94371 .
Article 98
Recognition of prospectuses
1. The prospectus and any supplements approved by Consob shall be valid for the purpose of the offering of EU financial instruments in other EU member states. For this purpose Consob shall issue notification in accordance with procedures in compliance with EU regulations.
2. If a public offering is made simultaneously or within a short interval in Italy and other EU member states, it shall be subject to the requirements provided for in this chapter where the issuer has its registered office in Italy.
3. Consob may inform the competent authority of the home member state of the need to provide new information.
Article 98-bis
Issuers from non-EU countries
1. Where the registered office of issuers is in a non-EU country, for whom Italy is the home member state, Consob may approve the prospectus drafted according to the law of the non-EU country provided the following conditions are satisfied:
a) the prospectus is drafted in compliance with international standards defined by international organisations for market supervisory commissions, including the Disclosure Standards issued by IOSCO and
b) the information requested, including information of a financial nature, is equivalent to that prescribed by EU regulations.
2. Where the offering requires that Italy acts as the host member state, article 98, subsections 2 and 3 shall apply.
Section II
Public offering of open-end UCITS units or shares
Article 98-ter
The offering prospectus
1. Those intending to implement an offering of units of open-end funds or shares in a SICAV, advance notice must be given to CONSOB, attaching the full prospectus and simple prospectus planned for publication.
2. The prospectuses shall contain information which, depending on the product and issuer characteristics, are necessary to allow the investor to form a reasoned opinion on the proposed investment, associated rights and related risks. The information contained in the prospectuses must be in a clear, easily understandable and analysable format.
3. The publication of prospectuses is governed by Consob pursuant to the terms and conditions established by Consob regulation.
4. The simplified prospectus may constitute the document valid for the offering in Italy, except where the translation of offerings of open-end UCITS units or shares is required pursuant to articles 42 and 50, subsection 2.
5. Article 94, subsections 8, 9 and 11 shall apply.
Article 98-quater
Implementation provisions
1. By regulation, Consob shall dictate the implementation provisions of this Section, also differentiated in relation to the characteristics of the open-end UCITS, issuers and markets. In line with EU provisions, the regulation shall establish in particular:
a) the content of the notification to Consob and prospectuses, together with the publication method for the prospectus and any updates;
b) the methods to be observed for the disclosure of information, perform market surveys or collect intentions to purchase or subscribe;
c) the implementation methods for the offering, also to guarantee equal treatment of the addressees.
2. Where the offering relates to open-end UCITS units or shares for which the prospectuses are not regulated pursuant to subsection 1a), at the request of the offerors Consob shall establish the prospectus content.
3. By regulation, Consob shall identify the rules on accuracy that must be observed by the offeror and by placement agents of the open-end UCITS units or shares, and by those with control over or associated with said persons.
Article 98-quinquies
Reporting obligations
1. Without prejudice to Title III, Chapter I, the following shall apply to offerors of open-end UCITS units or shares:
a) article 114, subsections 5 and 6, from the date of publication of the prospectuses until conclusion of the offering;
b) article 115, from the date of the notification pursuant to article 98-ter until one year after conclusion of the offering.
2. By regulation, Consob shall identify which provisions referred to under subsection 1 shall apply, their related periods, other persons concerned pursuant to article 98-quater, subsection 3 and persons providing services pursuant to article 1, subsection 6, paragraph e).
3. Where there are grounds for suspected violation of the provisions of this Chapter or related enactment regulations, Consob, for the purpose of obtaining details, may within one year of the purchase or subscription request information and the submission of records and documents from the buyers or subscribers of the open-end UCITS units or shares, establishing related deadlines. The power to request may also be exercised with regard to persons against whom there are grounds for suspicion that they implement public offerings in contravention of the provisions of article 98-ter.
Section III
Common provisions
Article 99
Powers of interdiction
1. Consob may:
a) suspend the public offering as a precautionary measure for a maximum of ninety days in the event of a well-founded suspicion of violation of the provisions of this chapter or the related regulations;
b) prohibit the public offering in the event of an ascertained violation of the provisions or rules referred to in paragraph a).
c) prohibit the public offering if there are grounds to suspect violation of the provisions of this Chapter or related enactment regulations;
d) prohibit the public offering if violation of the provisions or regulations referred to under paragraphs a) or b) are confirmed;
e) make public the fact that the public offering or issuer fails to meet obligations;
f) without prejudice to the powers envisaged under article 64, subsection 1-bis, paragraph c), as a preventive measure and for a period not exceeding ten consecutive working days on each occasion, request that the stock exchange company suspend trading on a regulated market in the case of grounds for suspected violation of the provisions of this Chapter and related enactment regulations;
g) without prejudice to the powers envisaged under article 64, subsection 1-bis, paragraph c), request that the stock exchange company prohibits trading on a regulated market in the case of confirmed violation of the provisions of this Chapter and related enactment regulations.
2. Where Consob, as the competent authority for the host member state, should discover irregularities committed by the issuer or authorised persons appointed to implement the public offering of EU financial instruments, Consob shall inform the competent authority of the home member state.
3. If despite measures adopted by the competent authority of the home member state, or if such measures prove inadequate, the issuer or authorised person appointed to implement the public offering continues to violate relevant legal or regulatory provisions, after informing the competent authority of the home member state, Consob shall adopt appropriate investor protection measures. Consob shall inform the European Commission as soon as possible of the adoption of such measures.
Article 100
Cases of inapplicability
1. The provisions of this chapter shall not apply to public offerings:
a) aimed exclusively at professional investors as defined pursuant to Article 30(2);
b) aimed at a number of persons not exceeding that established by Consob in a regulation372 ;
c) of a total amount not exceeding that established by Consob in a regulation373 ;
d) having as their object financial instruments issued or guaranteed by the Italian government or an EU member state or issued by international organisations of a public nature of which one or more EU member states are part;
e) having as their object financial instruments issued by the European Central Bank or the national central banks of the EU member states;
f) relating to instruments other than equity shares issued on an ongoing or repeated basis by banks, provided that such instruments:
i) are not subordinated, convertible or tradable;
ii) do not confer the right to subscribe to or purchase other types of financial instruments and are not linked to a derivative;
iii) give material right to the receipt of refundable deposits;
iv) are covered by a deposit guarantee system pursuant to articles 96 to 96-quarter of Legislative Decree no. 385 of 1 September 1993;
g) relate to money market instruments issued by banks with a less than 12-month maturity.
2. Consob may specify in a regulation other types of public offering to which the provisions of this chapter shall not apply in whole or in part374 .
3. The issuer or offeror shall have the right to draft a prospectus pursuant to European provisions at the time of the public offering of instruments referred to under paragraphs c), d) and e) of subsection 1.
Article 100-bis375
Circulation of financial products
1. The subsequent resale of financial products which have become the subject matter of a public offering which is exempt from the obligation to publish a prospectus forms to all effects a distinct and autonomous investment incentive in the case where there occur the conditions specified in the definition provided for in Article 1, subsection 1, paragraph t) and there are not any cases of inapplicability provided for by Article 100376 .
2. An investment incentive occurs also whenever the financial products which formed the subject matter in Italy or abroad of an allocation reserved for qualified investors are, during the following twelve months, systematically resold to people who are not qualified investors and this resale does not fall within any of the cases of inapplicability provided for in Article 100377 .
3. On the assumption as per subsection 2, whenever a prospectus has not been published, the purchaser, who acts for purposes outside entrepreneurial or professional activity, can insist on voiding the contract and the authorised persons where the resale of the financial products occurred shall be liable for damage. What withstands is the application of sanctions by Article 191 and what was established by Article 2412 subsection 2, Article 2483 subsection 2 and Article 2526 subsection 4 of the Civil Code378 .
4. Subsection 2 is not applied to the resale of certificates of indebtedness issued by member States of the Organisation for Economic Co-operation and Development (OECD) with a rating investment grade assigned by at least two primary international rating agencies, withstanding the exercise of the other civil, penal and administrative actions provided for the protection of investors.
4-bis. Consob has the power to dictate enactment provisions with regard to this article379 .
Article 101
Advertisements
1. Documentation relating to any form of advertisement concerning a public offering is issued to Consob at the time of advertising.
2. Prior to the publication of the prospectus, public offerings may not be advertised in any way. Advertisements must be transmitted in advance to Consob.
3. Advertisements shall comply with the guidelines laid down by Consob in a regulation having regard to the accuracy of the information and its conformity with the contents of the prospectus380 .
4. Consob may:
a) suspend the further diffusion of an advertisement as a precautionary measure for a maximum of ninety days in the event of a well-founded suspicion of violation of the provisions of this article or the related regulations;
b) prohibit the further diffusion of an advertisement in the event of an ascertained violation of the provisions or rules referred to in paragraph a).
c) prohibit the making of the public offering in the event of failure to comply with the measures referred to in paragraphs a) or b).
d) prohibit execution of the public offering, in the case of failure to comply with the provisions of paragraphs a), b) or c).
5. Regardless of the obligation to publish a prospectus, significant information provided by the issuer or offeror to qualified investors or special categories of investor, including information disclosed during meetings regarding the offering of financial products, must be disclosed to all qualified investors or all special categories of investor to whom the offering is exclusively addressed.
Chapter II
Public offers to buy or exchange financial instruments
Section I
General provisions
Article 101-bis381
(Definitions and application environment)
1. For the purposes of this chapter, “Italian listed companies” shall mean companies with registered office in Italy and with securities admitted to trading on an EU regulated market.
2. For the purposes of this chapter and article 123-bis, “securities” shall mean financial instruments carrying voting rights, also limited to specific topics, at ordinary or extraordinary shareholders' meetings.
3. Article 102 subsections 2 and 5, article 103 subsection 3-bis, all other provisions of this decree imposing specific reporting obligations upon the offeror or issuer with respect to employers or their representatives, together with articles 104, 104-bis and 104-ter, shall not apply to:
a) takeover bids or exchange tender offerings involving financial products other than securities;
b) takeover bids or exchange tender offerings not involving securities that carry voting rights on the topics indicated in article 105 subsections 2 and 3;
c) takeover bids or exchange tender offerings launched by parties who, directly or indirectly, hold the majority of voting rights exercisable at ordinary shareholders' meetings of the company382 ;
d) takeover bids involving own shares.
3-bis. Without prejudice to the provisions of subsection 3, by regulation Consob may identify takeover bids and exchange tender offerings, involving financial products other than securities, for which the provisions of this Section wholly or in part shall not apply, where there is no conflict with the aims of article 91383 .
4. “Persons acting in concert” shall mean persons cooperating together on the basis of a specific or tacit agreement, verbal or in writing, albeit invalid or without effect, for the purpose of acquiring, maintaining or strengthening control over the issuer or to counteract achievement of the aims of a takeover bid or exchange tender offering384 .
4-bis. In any event, persons considered to be acting in concert are:
a) parties to an agreement, even if void, envisaged in article 122, subsection 1 and subsection 5 paragraphs a), b), c) and d);
b) an entity, its parent company and its subsidiaries;
c) companies subject to joint control;
d) a company and its directors, members of the management board, or supervisory board or general managers385 .
4-ter. Without prejudice to subsection 4-bis, by regulation Consob shall identify:
a) cases in which it is presumed that the parties involved are persons acting in concert pursuant to subsection 4, unless they can prove that the conditions of said subsection do not apply;
b) cases in which the cooperation between several persons does not qualify as acting in concert pursuant to subsection 4386 .
Article 101-ter
Supervisory authority and applicable law
1. Consob shall supervise takeover bids or exchange tender offerings in compliance with the provisions of this chapter.
2. For the purposes of allocation of responsibilities between Consob and other EU Member State authorities with regard to takeover bids or exchange tender offerings involving securities of companies subject to the law of an EU Member State, and instrumental or subsequent to the acquisition of control under the national law of the issuer, the following provisions shall be observed.
3. Consob shall supervise the implementation of public offerings:
a) involving securities issued by a company with registered office in Italy and admitted to trading on one or more Italian regulation markets;
b) involving securities issued by a company with registered office in an EU Member State other than Italy and admitted to trading solely on Italian regulation markets;
c) involving securities issued by a company with registered office in an EU Member State other than Italy and admitted to trading on regulated markets in Italy and in EU Member States other than that in which the company is registered, if said securities were first admitted to trading on an Italian regulated market or, if the securities were simultaneously first admitted to trading on regulated markets in Italy and in other EU Member States, where the issuer adopts Consob as the competent supervisory authority, informing the aforementioned markets and their supervisory authorities on the first day of trading. By regulation, Consob shall establish the terms and conditions for the public disclosure of the issuer’s decision regarding adoption of the authority responsible for supervision of the offering387 .
4. Where Consob is the competent supervisory authority pursuant to subsection 3, paragraphs b) and c), matters concerning the price, procedure, with particular reference to reporting obligations on the decision of the bidder to proceed with the bid, content of the takeover bid document and disclosure of the bid shall be governed by Italian law. In matters relating to the information to be provided to employees of the issuer, matters relating to company law, in particular with regard to the threshold exceeded which a takeover bid becomes mandatory, to any derogation from such an obligation and the conditions under which the board of the issuer may undertake any action which might result in the frustration of the bid, the applicable rules and the competent authority shall be those of the Member State in which the issuer has its registered office.
5. Where the takeover bid involves securities issued by companies with registered office in Italy and admitted to trading solely on one or more regulated markets of other EU Member States, the matters indicated under subsection 4, second paragraph, shall be governed under Italian law and the relevant supervisory authority shall be Consob388 .
Article 102
Bidder obligations and prohibitive powers
1. The decision or occasion giving rise to the mandatorily promote a takeover bid or exchange tender offering shall be notified to Consob without delay and at the same time disclosed to the public. By regulation, Consob shall establish the content and publication terms of the notice.
2. As soon as the bid has been made public, the boards or control bodies of the issuer and of the bidder shall inform the representatives of their respective employees or, where there are no such representatives, the employees themselves.
3. Unless otherwise dictated by article 106, subsection 2, the bidder shall take immediate action to make the bid, and in any event no later than twenty days from the notice pursuant to subsection 1, and submit the takeover bid document for publication to Consob. Should said deadline not be met, the takeover bid document shall be declared inadmissible and the bidder may not make a further bid on the same financial products of the issuer in the twelve months thereafter.
4. Within fifteen days of submission of the takeover bid document, Consob shall issue its approval if the document allows receiving parties to form a reasoned opinion on the bid. On issue of approval, Consob may indicate to the bidder additional information to be included, specific means of publication of the takeover bid document and any special guarantees to be provided. The time limit for takeover bids involving unlisted financial products, or products widely distributed among the public pursuant to article 116, shall be thirty days. Should it prove necessary to request additional information from the bidder, said time limits shall be suspended, once only, until such information is received. Such information shall be provided within the time limit established by Consob, in any event not exceeding fifteen days. If for takeover bid implementation purposes, sector regulations require authorisation from other authorities, Consob shall approve the takeover bid document within five days of notification by said authorities. On expiry of the time limits indicated in this subsection, the takeover bid document shall be deemed approved.
4-bis. Limited to exchange tender offerings involving bonds and other debt securities, the bidder, also as an exception to the provisions of this chapter, may apply to Consob requesting that the offering be made subject to the provisions for public offerings for sale and subscription pursuant to Chapter I in this Title. Within fifteen days of receipt of such an application, Consob shall accept the request provided it does not conflict with the aims of article 91389 .
5. When the document is made public, the boards or controlling bodies of the issuer and of the bidder shall circulate the document to the representatives of their respective employees or, where there are no such representatives, to the employees themselves.
6. Pending the takeover bid, Consob may:
a) suspend the bid as a precautionary measure if there are grounds to suspect violation of the provisions of this chapter or of regulatory provisions;
b) suspend the takeover bid for a period not exceeding thirty days if new facts, or facts not previously known, come to light that would not allow receiving parties to form a reasoned opinion on the bid;
c) declare the takeover bid lapsed if violation of the provisions or regulations referred to under paragraph a) is confirmed;
7. For the purposes of its supervision of the observance of provisions referred to in this chapter, Consob shall exercise the powers envisaged by article 115, subsection 1, paragraphs a) and b) against any party appearing to be aware of the facts. Where there are grounds to suspect violation of the provisions of this chapter or of regulatory provisions, article 187-octies shall apply.
8. Where indiscretions in any event spread to the public with regard to a possible takeover bid or exchange tender offering and there are irregularities in the market performance of the securities concerned, article 114, subsections 5 and 6 shall apply to the potential bidders390 .
Article 103
Implementation of offers
1. Offers shall be irrevocable. Any clause stating the contrary shall be null and void. The offer shall be made at the same conditions to all the holders of the financial products that are the object thereof.
2. Without prejudice to Title III Chapter I, article 114, subsections 5 and 6, and article 115 shall apply to the issuers, bidders, persons acting in concert and the intermediaries appointed to collect bids from the date of notification indicated in article 102, subsection 1 and until one year from closure of the takeover bid391 .
3. The board of directors of the issuer shall issue a notice containing all information useful to evaluating the bid and its own evaluation of the bid. For companies with a two-tier structure, the notice shall be approved, jointly if necessary, by the control body and supervisory council392 .
3-bis. The notice shall also contain an evaluation of the effects of eventual success of the takeover bid on the interests of the company, and on the employment conditions and location of business premises. At the same time as its disclosure, the notice shall be issued to representatives of the company’s employees or, where there are no such representatives, directly to the employees. If received in time, the opinion of employee representatives regarding repercussions on employment conditions, shall be attached to the notice393 .
4. By regulation, Consob shall dictate the enactment provisions of this section, in particular governing:
a) content of the takeover bid document, its publication terms and terms of implementation of the takeover bid;
b) correctness and transparency of transactions on the financial products concerned;
c) the effects on the takeover bid price of purchase of the financial products concerned, by the bidders or persons acting in concert with the bidders after issue of the notice pursuant to article 102, subsection 1, pending the bid or in the six months following its closure;
d) amendments to the bid, increased and rival bids, without limiting the number of increased offers, that may be made prior to expiry of a maximum deadline;
e) acknowledgment of takeover bid documents approved by the supervisory authorities of other EU Member States or of non-EU countries with which cooperation agreements exist;
f) the publication terms of measures adopted by Consob pursuant to this section394 .
5. …omissis…395
Article 104396
Defensive measures
1. Unless approved by the ordinary or extraordinary shareholders’ meeting, depending on the attributed level of decision-making powers, Italian listed companies whose securities are involved in the offering shall abstain from action or transactions that could counteract achievement of the aims of the offering. This abstention obligation shall apply from the date of notice pursuant to article 102, subsection 1, until closure of the offering or until the offering expires. Mere research into other offerings shall not constitute an act or transaction in conflict with the aims of the offering. The liability of directors, members of the management board, supervisory board and general managers for action taken or transactions executed shall remain unchanged397 .
1-bis. The shareholders’ meeting approval envisaged in subsection 1 shall also be required for the implementation of any decision taken before the start of the period indicated in subsection 1, not yet implemented wholly or in part, that does not fall within the normal business practices of the company and the implementation of which could counteract achievement of the aims of the offering398 .
1-ter. The articles of association may differ, wholly or in part, from the provisions of subsections 1 and 1-bis. The company shall notify any difference approved pursuant to this subsection to Consob and to supervisory authorities for takeover bids in member countries in which their securities are admitted to listing on a regulated market or in which admission to listing has been requested. Without prejudice to the provisions of article 114, such differences shall also be promptly disclosed to the public in accordance with said provisions399 .
2. The notice of call to shareholders’ meetings referred to under this article shall be published by the means indicated in Article 125-bis at least fifteen days prior to the date of the shareholders’ meeting400.
Article 104-bis401
Breakthrough
1. Without prejudice to the provisions of article 23, subsection 3, the articles of association of an Italian listed company, other than a cooperative, may provide that, where a takeover bid or exchange tender offering is launched involving securities issued by that company, the regulations pursuant to subsections 2 and 3 shall apply402 .
2. In the takeover bid period, limitations on the transfer of securities as envisaged in the articles of association shall have no effect on the bidder. Likewise, limitations on voting rights envisaged in the articles of association or shareholders’ agreement in cases where a shareholders' meeting is called to resolve upon the actions and transactions pursuant to article 104, shall have no effect on the bidder403 .
3. If as a result of a takeover bid pursuant to subsection 1 the bidder comes into possession of at least seventy-five per cent of the share capital with voting rights in relation to resolutions on the appointment or removal of directors or members of the controlling body or supervisory council, at the first shareholders’ meeting following close of the bid, called to amend the articles of association or to remove or appoint directors or members of the controlling body or supervisory council, the following shall have no effect:
a) limitations on voting rights as envisaged in the articles of association or shareholders’ agreements;
b) any special right in relation to the appointment or removal of directors or members of the control body or supervisory council as envisaged in the articles of association404 .
4. The provisions of subsections 2 and 3 shall not apply to articles of association limitations on voting rights attributed to securities with capital privileges.
5. If the result of the bid pursuant to subsection 1 proves positive, the bidder shall be obliged to pay a fair indemnity for any prejudice to share capital suffered by holders of rights the exercise of which is rendered null by application of the provisions of subsections 2 and 3, provided that provisions of the articles of association or contractual provisions constituting such rights were in force prior to issue of the notice pursuant to article 102, subsection 1. The claim for indemnity must be submitted to the bidder, on penalty of lapse, within ninety days of the close of the bid or, where subsection 3 applies, within ninety days of the date of the shareholders' meeting. Should no agreement be reached, the amount of the indemnity shall be decided by the court as a discretionary assessment with regard, inter alia, to a comparison between the average market price of the security in the twelve months prior to issue of the first notice concerning the bid and the price performance following the positive conclusion of the bid.
6. The indemnity referred to under subsection 5 shall not be payable due to prejudice to share capital derives from the exercise of voting rights in conflict with a shareholders’ agreement if, at the time of exercise of the voting right, the declaration of withdrawal pursuant to article 123 subsection 3 had already been submitted.
7. The provisions regarding special powers pursuant to article 2 of Italian Decree Law no. 332 of 31 May 1994, converted with amendments to Law no. 474 of 30 July 1994 as amended, and on shareholding limitations and on voting rights pursuant to article 3 of said Decree Law, shall remain valid405 .
Article 104-ter406
Reciprocity clause
1. The provisions of article 104, subsections 1 and 1-bis and, if envisaged in the articles of association, the provisions of article 104-bis, subsections 2 and 3, shall not apply to takeover bids or exchange tender offerings by entities not subject to such provisions or equivalent provisions, or by a company or entity controlled by such entities. Where launched by persons acting in concert, it is sufficient that such provisions do not apply to just one of the bidders involved407 .
2. …omissis…408
3. At the request of the bidder or issuer and within twenty days of submission of the request, Consob shall decide whether the provisions applicable to the parties indicated under subsection 1 are equivalent to provisions to which the issuer is subject. By regulation, Consob shall establish the content and submission terms of such a request.
4. Any measure adopted by the issuer that could frustrate the bid under the terms of subsection 1 must be expressly authorised by the shareholders’ meeting, with regard to a possible takeover bid, in the eighteen months prior to disclosure of the decision to implement a takeover bid pursuant to article 102 subsection 1. Without prejudice to article 114, said authorisation shall be disclosed to the market without delay in accordance with the terms pursuant to said article409 .
Section II
Mandatory public offers to buy
Article 105410
General provisions
1. Except for the provisions of article 101-ter, subsections 4 and 5, and the provisions of this section shall apply to Italian companies with securities admitted to trading on Italian regulated markets411 .
2. For the purposes of this section, shareholding shall mean a portion, held directly or indirectly through trust companies or nominees, of the securities issued by a company pursuant to subsection 1 that give the right to vote in shareholders' meetings on resolutions concerning the appointment, removal or liability of directors or members of the supervisory board412 .
3. Consob may issue a regulation whereby the relevant capital shall include security categories in the equity investment that give the right to vote on one or more different matters taking into account the nature of the influence their exercise, jointly or severally, may have on the management of the company. By regulation, Consob shall also decide upon the investment calculation criteria pursuant to subsection 2 if the securities referred to therein are, as a result of legal or regulatory provisions, without voting rights413 .
3-bis. By regulation Consob shall establish the cases and methods by which derivates held are counted in the investment pursuant to subsection 2414 .
Article 106415
Global takeover bid
1. Any party which, as a result of acquisitions, comes into possession of a shareholding exceeding the thirty per cent threshold shall implement a takeover bid addressed to all holders for the full quota of securities in their possession and admitted to trading on a regulated market.
2. For each class of securities, the takeover bid shall be made within twenty days at a price no less than the highest price paid by the bidder, and by persons acting in concert with the bidder, in the twelve months prior to issue of the notice pursuant to article 102 subsection 1, to acquire securities of the same class. If no purchase against payment of securities of the same class was made in the period indicated, the takeover bid is implemented for that class of securities at a price no less than the weighted market average over the previous twelve months or shorter available period.
2-bis. The bid price may be constituted, wholly or in part, by securities. If the securities offered in payment of the bid price are not admitted to trading on a regulated market in an EU Member State or if, in the period indicated in subsection 2 and until the close of the bid, the bidder or persons acting in concert with the bidder made a cash purchase of securities that confer at least five per cent of voting rights at the shareholders’ meeting of the issuer of the securities involved in the takeover bid, the bidder must at least offer a cash payment to related investors as an alternative to payment in securities.
3. By regulation, Consob shall regulate situations in which:
a) the equity investment indicated in subsection 1 is acquired by the purchase of shareholdings in companies in which the capital is mainly constituted by shares issued by other companies pursuant to article 105, subsection 1;
b) the mandatory takeover bid results from acquisitions greater than 5% by parties that are already holders of the investment pursuant to subsection 1 but without holding the majority share of voting rights during the ordinary shareholders' meeting416 ;
c) subject to provision with just cause by Consob, the takeover bid is promoted at a price lower than the highest price paid, establishing criteria to determine said price and provided one of the following circumstances subsists:
1) the market prices were influenced by exceptional events or there are grounds to suspect they were subjected to manipulation;
2) the highest price paid by the bidder, or persons acting in concert with the bidder, in the period indicated under subsection 2 is either the buy-sell price for the securities involved in the takeover bid applied under market conditions and as part of the normal business practices or is the price of buy-sell transactions that would have benefited from one of the exemptions pursuant to subsection 5417 ;
d) subject to provision with just cause by Consob, the takeover bid is promoted at a price higher than the highest price paid, provided such a measure is necessary for investor protection purposes and at least one of the following circumstances subsists:
1) the bidder or persons acting in concert with the bidder have agreed to purchase securities at a price higher than that paid for the purchase of securities of the same category;
2) there is evidence of collusion between the bidder, or persons acting in concert with the bidder, and one or more of the sellers;
3) …omissis…418 ;
4) there are grounds to suspect that the market prices were subjected to manipulation419 .
3-bis. By regulation and taking into account the characteristics of the financial instruments issued, Consob may establish situations in which a takeover bid becomes mandatory following purchases that result in a cumulative holding of securities and other financial instruments, with voting rights on matters indicated under article 105, to an extent that overall voting powers are equivalent to those of a party in possession of a holding indicated under subsection 1.
3-ter. The provisions of paragraphs c) and d) of subsection 3 shall be disclosed to the public in accordance with the terms indicated in the regulation pursuant to article 103, subsection 4, paragraph f).
4. A takeover bid shall not be considered mandatory where the shareholding indicated under subsection 1 is held as a result of a takeover bid or exchange tender offering involving all the holders of securities and for the total quantity of securities in their possession, provided that, in the case of an exchange tender offering, the securities offered in exchange are listed on a regulated market in an EU Member State or a cash payment is offered as an alternative.
5. By regulation, Consob shall establish cases whereby exceeding the shareholding indicated under subsection 1 or 3 paragraph b) a takeover bid will not be considered mandatory if implemented in the presence of one or more majority shareholders or results from:
a) transactions to bail out a company in crisis;
b) transfer of the securities indicated under article 105 among parties linked by significant investment relationships;
c) causes not dependent upon the wishes of the buyer;
d) transactions of a temporary nature;
e) mergers or spin-offs;
f) purchases free of charge420 .
6. By provision with just cause, Consob may establish that a takeover bid shall not be considered mandatory on exceeding the holding indicated under subsection 1 or subsection 3 paragraph b) in cases attributable to the situations referred to under subsection 5, but which are not expressly indicated in the regulation approved pursuant to said subsection.
Article 107
Prior partial bids
1. In addition to the cases referred to in Articles 106(4) and 106(5), the provisions regarding mandatory takeover bids provided for in Articles 106(1) and 106(3) shall not apply where the shareholding is owned as a result of a takeover bid or exchange tender offering on at least sixty per cent of the securities in each category and all the following conditions are satisfied:
a) the bidder and persons acting in concert with the bidder, have not acquired shareholdings exceeding one per cent, including shares acquired under forward contracts maturing at a later date, in the twelve months preceding the notice to Consob referred to in Article 102(1) nor during the bid period;
b) the validity of the bid is subject to approval of a number of shareholders which together possess the majority of the securities concerned, pursuant to article 120, subsection 4, paragraph b) excluding securities held by the bidder, the major shareholder, also in relative terms, if that shareholding exceeds ten per cent, and by persons acting in concert with the bidder;
c) Consob shall grant the exemption after verifying satisfaction of the conditions specified in paragraphs a) and b)421 .
2. The approval procedures shall be laid down by Consob in the form of a regulation. Shareholders not subscribing to the bid may also express their opinion thereon in accordance with subsection 1, paragraph b)422 .
3. The bidder is required to launch a takeover bid referred to in Article 106 where, in the twelve months subsequent to the close of the unsolicited bid:
a) the bidder, or persons acting in concert with the bidder, have acquired shareholdings exceeding one per cent, also by means of forward contracts maturing at a later date423 ;
b) the issuing company has approved a merger or a spin-off424 .
Article 108425
Commitment to squeeze-out
1. If as a result of a global takeover bid, the bidder becomes holder of at least ninety-five per cent of the capital represented by securities in an Italian listed company, the bidder shall be committed to squeeze-out of the remaining securities should any other party so request. Where more than one class of securities is issued, the commitment to squeeze-out shall subsist only for classes of securities for which the ninety-five per cent threshold is reached426 .
2. With prejudice to the provisions of subsection 1, any party becoming holder of a quota exceeding ninety per cent of capital represented by securities admitted to trading on a regulated market shall be committed to squeeze-out the remaining securities admitted to trading on a regulated market by any holder thereof unless a float sufficient to ensure regular trading performance is not restored within ninety days. Where more than one class of security is issued, the commitment to squeeze-out shall subsist only for classes of securities for which said ninety per cent threshold is reached.
3. Where the situation indicated under subsection 1 applies, and in cases referred to under subsection 2 in which the holding indicated is reached solely as a result of a global takeover bid, the price is equal to that of the previous global takeover bid provided that, in the case of a voluntary takeover bid, as a result of said bid the bidder has acquired securities that represent not less than ninety per cent of the share capital with voting rights included in the bid.
4. Over and beyond the cases indicated in subsection 3, the price shall be established by Consob, also taking into account any previous price bid or the market price in the half-year prior to announcement of the bid pursuant to article 102, subsection 1, or article 114, or prior to the acquisition giving rise to the commitment427 .
5. Where the situation indicated in subsection 1 applies, and in cases referred to under subsection 2 in which the holding indicated is reached solely as a result of a global takeover bid, the price takes the same format as that of the takeover bid, but the holder of the securities may still demand full payment in cash, to the extent established by Consob, based on general criteria defined in this regulation428 .
6. If the takeover bid price is equal to that of the previous takeover bid, the commitment to squeeze-out may be effected by means of a reopening of the same terms.
7. By regulation, Consob shall dictate the enactment provisions of this section, in particular:
a) reporting obligations relating to the enactment of this article;
b) the time limits within which holders of securities may demand sale of the aforementioned securities;
c) the procedure to be followed in order to establish the price.
Article 109429
Squeeze-out in concert
1. Parties acting in concert shall be jointly obliged under the terms of articles 106 and 108 when, as a result of purchases made even by one only of the parties, they come into possession of a total holding exceeding the percentages indicated under the above articles.
2. Subsection 1 shall not apply when a holding exceeding the percentages indicated in articles 106 and 108 constitutes the effect of the stipulation of an agreement, including a null agreement, pursuant to article 122, unless parties to said agreement came into possession of a total holding exceeding the aforementioned percentages in the twelve months prior to stipulation of the agreement.
3. For the purposes of application of subsection 1, the instances indicated in article 101-bis, subsection 4-bis, become significant, including jointly, only to parties in possession of the holdings430 .
Article 110
Failure to comply with obligations431
1. In the event of violation of the obligations laid down in this section, the voting rights attached to the whole shareholding owned shall not be exercisable and the securities exceeding the percentages specified in Articles 106 and 108 must be disposed of within twelve months. Where the voting rights are exercised, Article 14(5) shall apply. The challenge may also be initiated by Consob within the time limit specified in Article 14(6)432 .
1-bis. Without prejudice to the provisions of article 192, subsection 1, as an alternative to the sale referred to under subsection 1, Consob may, by provision with just cause and considering, inter alia, the reasons for failure to comply with obligations, the probable effects of the sale and any changes in the ownership structure, impose implementation of the global takeover bid at the price established by Consob, also taking into account the market price of the securities433 .
1-ter. The sale envisaged under subsection 1 or takeover bid envisaged under subsection 1-bis shall cancel the suspension of voting rights pursuant to subsection 1434 .
Article 111
Right to squeeze-out
1. A bidder coming into possession following a global takeover bid of a holding of at least ninety-five per cent of the capital represented by securities in an Italian listed company shall have the right to squeeze-out on remaining securities within three months of expiry of the time limit for bid acceptance, if the intention to exercise said right was declared in the takeover bid document. Where more than one class of securities is issued, the right to squeeze-out shall subsist only for classes of securities for which the ninety-five per cent threshold is reached435.
2. The amount and form of payment to be assumed shall be established pursuant to article 108, subsections 3, 4 and 5436 .
3. The transfer shall be effective from the moment notice of the deposit of the consideration with a bank is given to the issuing company, which shall make the consequent entries in the shareholders' register.
Article 112
Implementing provisions
1. Consob shall issue a regulation with provisions implementing this section; in a measure to be published in the Italian Official Gazette it may, after consulting the stock exchange company, increase the percentage provided for in Article 108 for individual companies437 .
TITLE III
ISSUERS
Chapter I
Company information
Article 113
Listing particulars
1. Before the date set for the start of trading in the financial instruments on a regulated market, issuers shall publish listing particulars containing the information specified in Article 94 subsections 1, 2, 3, 4, 5, 8, 10 and 11 and 94-bis, subsections 1, 2, 3 and 5 also for a person requesting admission to trading.
2. Any new and significant fact or material error in relation to information contained in the prospectus and likely to influence the assessment of financial instruments, and which still exist or are discovered between the time of approval of the prospectus and the start of trading on a regulated market must be mentioned in a supplement to the prospectus.
3. Consob:
a) shall lay down in a regulation the contents of listing particulars and the manner of their publication, with specific provisions for cases in which admission to listing on a regulated market is preceded by a public offering;
b) may require issuers to include supplementary information in the listing particulars and lay down specific procedures for their publication;
c) shall issue a regulation to coordinate the functions of the stock exchange company with its own and, taking account of the characteristics of the individual markets, at the request of such company, may entrust it with tasks concerning the examination of listing particulars.
d) shall govern the obligation to file a document with Consob concerning the information published or made available to the public by issuers during the year;
e) shall establish the conditions for the transfer of approval of a prospectus to the competent authority of another member state;
f) shall exercise powers pursuant to article 114, subsections 5 and 6 and article 115 in relation to the issuer, person requesting admission to trading and other persons indicated in said provisions.
g) may suspend the admission to trading on a regulated market for a maximum of ten consecutive working days each time there is reason to suspect that the provisions of this article and related enactment regulations have been violated;
h) without prejudice to the powers envisaged under article 64, subsection 1-bis, paragraph c), may as a preventive measure and for a period not exceeding ten consecutive working days on each occasion, request that the stock exchange company suspend trading on a regulated market in the case of grounds for suspected violation of the provisions of this article and related enactment regulations;
i) without prejudice to the powers envisaged under article 64, subsection 1-bis, paragraph c), may request that the stock exchange company prohibits trading on a regulated market in the case of confirmed violation of the provisions of this article and related enactment regulations.
l) shall inform the competent authority of the home member state if, as competent authority for the host member state, it should discover that violations of issuer obligations have been committed in relation to the admission of financial instruments for trading on a regulated market;
m) after informing the competent authority of the home member state, shall adopt appropriate investor protection measures if, despite measures adopted by the competent authority of the home member state, or if such measures prove inadequate, the issuer continues to violate relevant legal or regulatory provisions . The European Commission shall be informed as soon as possible of the adoption of such measures;
n) shall make public the fact that the issuer or person requesting admission to trading has failed to meet obligations.
4. For the advertising of an admission to listing of financial instruments on a regulated market, article 10 shall apply.
5. For the prospectus concerning admission to trading on a regulated market, articles 98 and 98-bis shall apply438 .
Article 113-bis439
Admission to trading of open-end UCITS units or shares
1. Prior to the established date for the start of trading of open-end UCITS units or shares on a regulated market, the issuer shall publish a prospectus containing the information pursuant to article 98-ter, subsection 2.
2. Consob:
a) shall by regulation determine the content of the prospectus, related publication methods, without prejudice to the need to arrange media publication through national daily newspapers, and updating of the prospectus, dictating specific measures in cases in which admission to listing on a regulated market coincides with the timing of the public offering440 ;
b) may indicate information to be inserted by the issuer as integrations to the prospectus and specific advertising methods;
c) shall dictate provisions to coordinate stock exchange company functions with its own and, on request from said company, may assign tasks relating to control of the prospectus, also taking into account the characteristics of the individual markets.
3. The prospectus approved by the competent authority of another EU member state shall be recognised by Consob, under the terms and conditions established in subsection 2 of the regulation, as a prospectus for admission to trading on a regulated market. Under subsection 2 of the regulation, Consob may request the publication of a document for the listing.
4. For the advertising of an admission to listing of open-end UCITS units or shares on a regulated market, article 101 shall apply.
Article 113-ter441
General provisions on regulated disclosures
1. Regulated disclosures shall mean disclosures published by listed issuers, listed issuers for which Italy is the home member state or their controlling bodies, pursuant to the provisions of this Title, Chapters I and II, Sections 1, I-bis, and V-bis, and to related enactment regulations or provisions established by non-EU country authorities considered the equivalent of Consob442 .
2. Regulated disclosures shall be filed with Consob and the stock exchange company for which the issuer has requested or received approval for admission to trading of its securities or closed-end funds, in order to guarantee that said company may exercise its duties pursuant to article 64, subsection 1.
3. In exercising powers attributed under this Title, Consob shall establish the terms and conditions for public dissemination of regulated disclosures, without prejudice to the need to arrange media publication through national daily newspapers, taking into account the nature of such information so as to ensure rapid, non-discriminatory and reasonably suitable access, guaranteeing effective dissemination throughout the entire European Union443 .
4. Consob shall:
a) authorise third parties to the issuer to provide disclosure services for regulatory information;
b) authorise centralised archive services for regulatory information;
c) organise and manage centralised information archive services in the absence of authorised persons pursuant to paragraph b).
5. By regulation and in relation to regulatory information, Consob shall establish:
a) filing terms and methods pursuant to subsection 2;
b) requirements and conditions for the release of authorisation to exercise disclosure services, and measures for the provision of such services given the objectives of subsection 3;
c) requirements and conditions for the release of authorisation to exercise archive services, and measures for the provision of such services to guarantee security, data source certainty, time and date stamps of the receipt of regulatory information, easy access for end users and filing procedures aligned with those of Consob;
d) the language to be used in the notices;
e) any exemptions from filing, disclosure and archiving obligations in compliance with EU law.
6. If a party has requested admission to trading of securities or closed-end funds on a regulated market, without permission from the issuer, disclosure obligations for regulatory information are observed by that party, except where the issuer, in accordance with provisions established in its home member state, discloses regulatory information to the public as required under EU law.
7. Parties obliged to disclose regulatory information to the public may not claim payment for such disclosure.
8. Consob may make public the fact that parties obliged to disclose regulatory information do not comply with such obligations.
9. Without prejudice to the provisions of article 64, subsection 1-bis, Consob may:
a) suspend or demand that the regulated market concerned suspends the trading of securities or closed-end funds for a maximum ten days on each occasion, if there are grounds to suspect that disclosures regarding regulatory information have been violated by the party under obligation, pursuant to this article, to disclose such regulatory information;
b) prohibit trading on a regulated market if it is confirmed that the provisions of paragraph a) have been violated.
Article 114444
Information to be provided to the public
1. Without prejudice to the information requirements established by specific provisions of law, listed issuers and the persons that control them shall make available to the public, without delay, inside information referred to in Article 181 that directly concerns such issuers and their subsidiaries. By regulation, Consob shall establish the terms and conditions for the disclosure of information, without prejudice to the need to arrange media publication through national daily newspapers, dictate measures to coordinate duties attributed to stock exchange companies with its own, and may identify duties to be delegated for the correct performance of duties envisaged in article 64, subsection 1, paragraph b).445
2. Listed issuers shall issue appropriate instructions for subsidiaries to provide all the information necessary to comply with the information requirements established by law. Subsidiaries shall transmit the information required in a timely manner.
3. Persons referred to in subsection 2 may under their own responsibility delay the public disclosure of inside information in the cases and under the conditions established by Consob in a regulation, provided that such delay would not be likely to mislead the public with regard to essential facts and circumstances and that such persons are able to ensure the confidentiality of the information. Consob may issue a regulation establishing that an issuer shall without delay inform it of the decision to delay the public disclosure of inside information and may identify the measures necessary to ensure the public is correctly informed.
4. Where persons referred to in subsection 1, or persons acting on their behalf or for their account, disclose information referred to in subsection 1 in the normal exercise of their employment, profession or duties to a third party who is not subject to a confidentiality requirement based on a law, regulations, Articles of Association or a contract, they shall make complete public disclosure thereof, simultaneously in the case of an intentional disclosure and promptly in the case of a non-intentional disclosure.
5. Consob, on a general basis or otherwise, may require persons referred to in subsection 1, listed issuers for which Italy is the home Member State, the members of the board of directors, the members of the internal control body, managers and persons who hold a major holding pursuant to Article 120 or who are parties to a shareholders’ agreement pursuant to Article 122 to publish, in the manner it shall establish, the information and documents needed to inform the public. Where such persons fail to comply, Consob shall publish the material at their expense.446
6. Where persons indicated in subsection 1 and listed issuers with Italy as their home member country submit justified claim to the effect that public disclosure of information pursuant to subsection 5 could seriously damage the issuer, the disclosure obligations shall be suspended. Within seven days Consob may waive the requirement to disclose all or part of the information permanently or temporarily, provided this is not likely to mislead the public with regard to essential facts and circumstances. On expiry of said deadline, the claim shall be deemed accepted447 .
7. Persons performing administrative, supervisory and management functions in a listed issuer and managers who have regular access to inside information referred to in subsection 1 and the power to make managerial decisions affecting the future development and prospects of the issuer, persons who hold shares amounting to at least 10 per cent of the share capital, and any other persons who control the issuer must inform Consob and the public of transactions involving the issuer’s shares or other financial instruments linked to them that they have carried out directly or through nominees. Such disclosures must also be made by the spouse, unless legally separated, dependent children, including those of the spouse, cohabitant parents and relatives by blood or affinity of the persons referred to above and in the other cases identified by Consob in a regulation implementing Commission Directive 2004/72/EC of 29 April 2004. In the same regulation Consob shall identify the procedures and time limits for such notifications, the procedures and time limits for the disclosure of the information to the public and the cases in which such obligations also apply with reference to companies in a control relationship with the issuer and any other entities in which the persons specified above perform functions referred to in the first sentence of this subsection.
8. Persons producing or disseminating research or evaluations, excluding credit rating agencies, regarding financial instruments specified in Article 180 (1)(a), or issuers of such instruments, and persons producing or disseminating other information who recommend or suggest investment strategies intended for distribution channels or for the public must present the information fairly and disclose any interest or conflict of interest they may have with respect to the financial instruments to which the information refers.448
9. Consob shall lay down in a regulation:
a) provisions implementing subsection 8;
b) the manner of disseminating research and information referred to in subsection 8 produced or disseminated by listed issuers, intermediaries authorised to provide investment services or persons in a control relationship with them.
10. Without prejudice to subsection 8, provisions issued pursuant to subsection 9, paragraph a) shall not apply to journalists subject to equivalent self-regulatory rules provided their application achieves similar effects. Consob shall evaluate, preliminarily and on a general basis, that such conditions are satisfied.
11. Institutions that disseminate data or statistics liable to have a significant effect on the price of financial instruments referred to in Article 180(1)(a) shall disseminate such information in a fair and transparent way.
12. The provisions of this article shall also apply to Italian and foreign persons who issue financial instruments for which an application has been made for admission to trading on Italian regulated markets.
Article 114-bis449
Information to be provided to the market concerning the allocation of financial instruments450 to corporate officers, employees and collaborators
1. Compensation plans based on financial instruments in favour of members of the board of directors or the management board, employees and collaborators not linked to the company by an employment contract and of members of the board of directors or the management board, employees and collaborators of parent companies or subsidiaries shall be approved by the ordinary shareholders’ meeting.
In accordance with the terms and conditions envisaged in Article 125-ter, subsection 1, the issuer makes the report available to the public with information concerning the following451 :
a) the reasons for the adoption of the plan;
b) the members of the Board of Directors, that is the management board of the company, of the controlling or controlled companies which benefit from the plan452 ;
b-bis) the categories of employees or collaborators of the company and controlling companies or controlled companies which benefit from the plan453 ;
c) the procedures and clauses for the implementation of the plan, specifying whether its implementation is subject to the satisfaction of conditions and, in particular, to the achievement of specific results;
d) whether the plan enjoys any support from the special fund for encouraging worker participation in firms referred to in Article 4(112) of Law 350/2003;
e) the procedures for determining either the prices or the criteria for determining the prices for the subscription or purchase of shares;
f) the restrictions on the availability of the shares or options allocated, with special reference to the time limits within which the subsequent transfer of shares to the company or third parties is permitted or prohibited.
2. This article shall also apply to listed issuers and to issuers of financial instruments widely distributed among the public in accordance with Article 116454 .
3. Consob shall lay down in its regulation information concerning matters specified in subsection 1 which should be provided in relation to the various procedures for implementing the plan, providing more detailed information for plans of special importance.455
Article 115
Information to be disclosed to Consob
1. For the purposes of monitoring the accuracy of information provided to the public, Consob, on a general basis or otherwise, may:
a) require listed issuers, listed issuers with Italy as home Member State, the persons that control them and companies controlled by them to provide information and documents, establishing the related procedures456 ;
b) gather information, including by means of hearings, from members of governing bodies, general managers, managers charged with preparing companies’ financial reports and other managers, statutory auditors, independent statutory auditors and companies and persons referred to in paragraph a)457 ;
c) carry out inspections at the offices of persons referred to in paragraphs a) and b) to check company documents and obtain copies thereof.458
c-bis) exercise the other powers provided by Article 187-octies.459
2. The powers provided for in subsection 1, paragraphs a), b) and c)460 may be exercised with respect to persons who hold a major holding pursuant to Article 120 or who are parties to a shareholders'agreement pursuant to Article 122.
3. Consob may also require companies or entities with direct or indirect holdings in companies with listed shares to provide, on the basis of the available information, the names of their members or, in the case of trust companies, of their beneficiaries.
Article 115-bis
Lists of persons having access to inside information
1. Listed issuers and persons in a control relationship with them and persons acting on their behalf or for their account shall draw up, and keep regularly updated, a list of the persons who, in the exercise of their employment, profession or duties, have access to information referred to in Article 114(1). Consob shall establish the procedures for drawing up, keeping and updating such lists.461
Article 116
Financial instruments widely distributed among the public
1. Article 114, except for subsection 7,462 and Article 115 shall also apply to issuers of financial instruments that, although not listed on a regulated market in Italy, are widely distributed among the public. Consob shall lay down in a regulation the criteria for identifying such issuers and may disapply the aforementioned articles, in whole or in part, for issuers of financial instruments listed on regulated markets in other EU countries or on markets in non-EU countries in consideration of the information requirements they are subject to by virtue of being listed463 .
2. The provisions of Part IV, Title III, Chapter II, Section VI, except for Articles 157 and 158, shall apply to the issuers indicated in subsection 1464 .
2-bis. Article 114, except subsection 7, and Article 115 shall apply also to issuers of financial instruments admitted to trading on multilateral trading systems meeting the characteristics established by Consob regulation, and provided that admission is requested or authorised by the issuer465 .
2-ter. The provisions of Article 125-bis subsections 1 and 3 and, to the extent it be compatible, subsection 4, Articles 125-ter, 125-quater, 126, 126-bis and 127 shall apply to issuers of widely-distributed shares. By regulation Consob may extend all or part of the obligations envisaged in Articles 125-bis, 125-ter and 125-quater to issuers of widely-distributed financial instruments other than shares. Consob may dispense with compliance with the aforementioned provisions for issuers of financial instruments listed on regulated markets of other EU countries or on the markets of non-EU countries, in consideration of the disclosure obligations they are required to meet under the terms of their listing466.
Article 117
Accounting information
1. The exemptions from the obligation to prepare consolidated accounts provided in Article 27 of Legislative Decree 127/1991, Article 27 of Legislative Decree 87/1992 and Article 61 of Legislative Decree 173/1997 shall not apply to Italian companies with shares listed on regulated markets in Italy or other EU countries.
2. The Minister of Justice, in concert with the Minister of the Economy and Finance,467 shall lay down in a regulation the internationally accepted accounting standards compatible with those laid down in Community accounting directives that issuers of financial instruments listed on regulated markets in Italy, other EU countries or non EU countries may use, by way of derogation from the rules in force, in preparing their consolidated accounts, provided such principles are accepted by the markets of non-EU countries. The standards shall be identified on the basis of a proposal from Consob, to be formulated in agreement with the Bank of Italy for banks and the financial companies referred to in Article 1(1) of Legislative Decree 87/1992 and with Siva for the insurance and reinsurance undertakings referred to in Article 1 of Legislative Decree 173/1997.
Article 117-bis
Mergers between listed and unlisted companies
1. Article 13 shall apply to mergers in which a company with unlisted shares is merged into a company with listed shares when the latter’s assets, other than liquid balances and financial assets that are not fixed assets, are significantly less than the assets of the company to be merged.
2. Without prejudice to the powers referred to in Article 13.2, Consob shall lay down specific rules in a regulation for transactions referred to in subsection 1.468
Article 117-ter
Provisions concerning ethical finance
1. Consob, after consulting all the interested parties and consulting with the competent supervisory authorities, shall lay down in a regulation the specific disclosure and reporting obligations applicable to authorised intermediaries and insurance companies that promote products and services described as ethical or socially responsible.469
Article 118
Provisions not applicable
1. The provisions of this section shall not apply to the financial instruments referred to in Articles 100(1)(d) and 100(1)(e).
2. Subsections 1 and 2 of article 116 shall not apply to financial instruments issued by banks, other than shares or financial instruments with the option to purchase or subscribe shares470 .
Article 118-bis471
Checking information provided to the public472
1. By regulation and taking into account international principles on the supervision of corporate disclosures, Consob shall establish the terms and conditions for its control over public disclosures issued in accordance with law, including information contained in accounting records, by listed issuers and listed issuers with Italy as its home member country473 .
Chapter II
Listed companies
Article 119
Scope
1. Unless specified otherwise, the provisions of this chapter shall apply to Italian companies with shares listed on regulated markets in Italy or other EU countries (listed companies).
Section I
Ownership structures
Article 120
Notification requirements for major holdings
1. For the purposes of this section, the capital of società per azioni shall mean that represented by voting shares.
2. Persons who hold more than 2 per cent of the capital of a listed issuer with Italy as home Member State shall notify the investee company and Consob474 .
2 bis. Consob may, by means of measures justified by needs to protect the investors as well as corporate control market and capital market efficiency and transparency, envisage – for a limited period of time – thresholds lower than that indicated in subsection 2 for companies with an elevated current market value and particularly extensive shareholding structure475 .
3. Listed issuers with Italy as home Member State that hold more that 10 per cent of the capital of an Italian or foreign unlisted company or società a responsabilità limitata shall notify the investee company and Consob476 .
4. Consob, taking account of the characteristics of the investors, shall lay down in a regulation:
a) the variations in the holdings referred to in subsections 2 and 3 that must be notified;
b) the methods for calculating holdings, including indirect holdings and those where voting rights belong or have been assigned to a person other than the member;
c) the content of and procedures for notifications and public announcements and any exemptions applicable to the latter;
d) the time limits for notifications and public announcements, which may be periodic in the case referred to in subsection 3477 ;
d-bis) the cases in which notifications are due from owners of financial instruments carrying the rights referred to in the last subsection of Article 2351 of the Civil Code.478
d-ter) cases in which a holding of derivatives is subject to reporting obligations479 ;
d-quater) situations exempt from the application of these provisions480 .
5. Voting rights attached to listed shares or to financial instruments which have not been notified pursuant to subsection 2 may not be exercised. In the event of non-compliance, Article 14(5) shall apply. The challenge may also be initiated by Consob within the time limit specified in Article 14(6).481
6. Subsection 2 shall not apply to shares held by the Ministry of the Economy and Finance482 through companies it controls. The related notification requirements shall be fulfilled by the companies controlled.
Article 121
Rules governing cross-holdings
1. Except in the cases provided for in Article 2359-bis of the Civil Code, in the event of cross-holdings that exceed the limits specified in Articles 120(2) and 120(3), the company that was the last to exceed the limit may not exercise the voting rights attached to the excess shares or capital parts and must dispose of them within twelve months from the date on which it exceeded the limit. In the event of failure to make the disposal within such time limit, the suspension of voting rights shall apply to the entire shareholding. Where it is not possible to ascertain which of the two companies was the last to exceed the limit, the suspension of voting rights and the disposal requirement shall apply to both unless they have agreed otherwise.
2. The limit of two per cent recalled in subsection 1 shall be raised to 5 per cent provided the limit of two per cent is exceeded by both companies following an agreement authorised in advance by the ordinary shareholders' meetings of the companies in question.
3. Where a person owns a shareholding that exceeds two per cent of the capital of a company with listed shares, the latter or the person that controls it may not acquire a shareholding that exceeds such limit in a company with listed shares controlled by the former. In the event of non-compliance, the voting rights attached to the shares in excess of the limit specified shall be suspended. Where it is not possible to ascertain which of the two persons was the last to exceed the limit, the suspension shall apply to both unless they have agreed otherwise.
4. The shareholdings shall be calculated by applying the methods laid down pursuant to Article 120 subsection 4, paragraph b).
5. Subsections 1, 2 and 3 shall not apply where the limits indicated therein are exceeded following a takeover bid or exchange tender offering aimed at the acquisition of at least sixty per cent of the ordinary shares483 .
6. In the event of non-compliance with the prohibitions on the exercise of voting rights provided for in Article 14, subsection 5, paragraphs 1 and 3 shall apply. The challenge may also be initiated by Consob within the time limit specified in Article 14, subsection 6.
Article 122
Shareholders' agreements
1. In whatever format they may be stipulated, agreements regarding the exercise of voting rights in companies with listed shares and their parent companies, within five days of stipulation shall be:
a) notified to Consob;
b) published in abstract form in the Italian daily press;
c) filed with the Register of Companies in which the company office is registered;
d) notified to the companies with listed shares484 .
2. Consob shall lay down in a regulation the contents of the notification, abridged form and publication and the related procedures485 .
3. Agreements shall be null and void in the event of non-compliance with the requirements laid down in subsection 1.
4. Voting rights attached to listed shares for which the requirements laid down in subsection 1 have not been satisfied may not be exercised. In the event of non-compliance, Article 14(5) shall apply. The challenge may also be initiated by Consob within the time limit specified in Article 14(6).
5. This article shall also apply to agreements, in whatsoever form concluded, that:
a) create obligations of consultation prior to the exercise of voting rights in companies with listed shares or companies that control them;
b) set limits on the transfer of the related shares or of financial instruments that entitle holders to buy or subscribe for them;
c) provide for the purchase of shares or financial instruments referred to in paragraph b);
d) have as their object or effect the exercise, jointly or otherwise, of a dominant influence on such companies.
d-bis) which aim to encourage or frustrate a takeover bid or exchange tender offering, including commitments relating to non-participation in a takeover bid486
5-bis. Agreements referred to in this article shall not be subject to Articles 2341-bis and 2341-ter of the Civil Code.487
5-ter. The disclosure obligations pursuant to subsection 1 of this article shall not apply to agreements, in whatever format they may be stipulated, regarding shareholdings totalling less than the threshold indicated in article 120, subsection 2488 .
Article 123
Duration of agreements and right of withdrawal
1. Where agreements referred to in Article 122 are fixed term, they may not have a duration greater than three years and shall be deemed to have been concluded for such duration even if the parties provided for a longer term; agreements shall be renewable upon expiry.
2. Agreements may also be concluded for an indeterminate period; in such case each party may withdraw on giving six months' notice. Articles 122(1) and 122(2) shall apply to withdrawal.
3. Shareholders who intend to accept a public offer to buy or exchange made pursuant to Articles 106 or 107 may withdraw from the agreements referred to in Article 122 without notice. The declaration of withdrawal shall not produce effects if the transfer of the shares has not been finalized.
Article 123-bis
Report on corporate governance and ownership structures
1. The management report of issuers with securities admitted to trading on regulated markets shall contain a specific section entitled: «Report on corporate governance and ownership structures», providing detailed information on:
a) the capital structure, including securities not traded on a regulated market in an EU Member State, with an indication of the different classes of shares and, for each class of shares, the related rights and obligations and the percentage of total share capital represented;
b) any restriction on the transfer of securities, e.g. limitations in the possession of securities or the need to obtain consent from part of the company or other securities holders;
c) significant direct and indirect holdings, for example through pyramid structures and cross-holdings, as stated in reports submitted pursuant to article 120;
d) if known, the holders of any securities with special control rights and a description of such rights;
e) the mechanism for the exercise of voting rights in any employee share scheme where voting rights are not exercised directly by the employees;
f) any restrictions on voting rights, such as limitations of the voting rights of holders of a given percentage or number of votes, deadlines for the exercise of voting rights, or systems whereby, with the company's cooperation, the financial rights attached to the securities are separate from the holding of securities;
g) agreements known to the company pursuant to article 122;
h) any significant agreements to which the company is party and which take effect, alter or terminate upon a change of control of the company, and the effects thereof, except where their nature is such that their disclosure would be seriously prejudicial to the company; this exception shall not apply where the company is specifically obliged to disclose such information on the basis of other legal requirements;
i) agreements between companies and directors, members of the control body or supervisory council which envisage indemnities in the event of resignation or dismissal without just cause, or if their employment contract should terminate as the result of a takeover bid.
l) rules applying to the appointment and replacement of directors and members of the control body or supervisory council, and to amendments to the articles of association if different from those applied as a supplementary measure;
m) the existence of delegated powers regarding share capital increases pursuant to article 2443 of the Italian Civil Code or powers of the directors or members of the control body to issue security-related financial instruments or to authorise the purchase of own shares;
2. In the same section of the report referred to in subsection 1, information shall be provided regarding:
a) adoption of a corporate governance code of conduct issued by regulated stock exchange companies or trade associations, giving reasons for any decision not to adopt one or more provisions, together with the corporate governance practices actually applied by the company over and above any legal or regulatory obligations. The company shall also indicate where the adopted corporate governance code of conduct may be accessed by the public;
b) the main characteristics of existing risk management and internal audit systems used in relation to the financial reporting process, including consolidated reports, where applicable;
c) the operating mechanisms of the shareholders’ meeting, its main powers, shareholder rights and their terms of exercise, if different from those envisaged by legal and regulatory provisions applicable as supplementary measures;
d) the composition and duties of the administrative and control bodies and their committees.
3. The disclosures pursuant to subsections 1 and 2 may be issued in a report separate from the management report, approved by the board of directors and published with the management report. Alternatively, the management report may refer to a section of the issuer’s web site in which such a report is published.
4. The independent auditors shall express opinion pursuant to article 156, subsection 4-bis, paragraph d) on disclosures referred to under subsection 1, paragraphs c), d), f), l) and m), and under subsection 2 paragraph b), and shall confirm that a report on corporate governance and ownership structures has been prepared.
5. Companies that are not issuers of securities admitted to trading on regulated markets or multilateral trading systems may omit publication of the disclosures pursuant to subsections 1 and 2, except those indicated under subsection 2, paragraph b)489 .
Article 124
Provisions not applicable
1. Consob may declare Articles 120, 121, 122 and 123 subsection 2 second paragraph, inapplicable to Italian companies with shares listed only on regulated markets in other EU countries in consideration of the legislation applicable to such companies by virtue of their being listed.
Section I-bis490
Information on the adoption of codes of conduct
Article 124-bis
Reporting obligations regarding codes of conduct
…omissis…491
Article 124-ter
Disclosures regarding codes of conduct
1. To the extent of its powers, Consob shall establish the disclosure formats for codes of conduct regarding corporate governance issued by stock exchange companies or trade associations492 .
Section II
Shareholder rights493
Article 125
Calling of shareholders' meetings at the request of minority shareholders
…omissis…494
Article 125-bis
Notice of call to shareholders’ meetings
1. The shareholders’ meeting shall be called at least thirty days prior to the date of the meeting, by means of a notice of call published on the company web site and by other methods as envisaged by Consob regulation issued pursuant to Article 113-ter, subsection 3.
2. For shareholders’ meetings called to appoint members of the board of directors and internal control bodies, the time limit for publication of the notice of call shall be at least forty days prior to the date of the meeting.
3. For shareholders’ meetings envisaged in Articles 2446, 2447 and 2448 of the Civil Code, the time limit indicated in subsection 1 shall become at least twenty-one days prior to the date of the meeting.
4. The notice of call shall contain:
a) indication of the date, time and venue of the meeting, together with the list of items to be discussed;
b) a clear and precise description of procedures to be observed by shareholders in order to attend and vote at the shareholders' meeting, including information regarding:
1) the right to ask questions prior to the shareholders’ meeting, the time limits by which the right to supplement the agenda may be exercised and, also through reference to the company web site, further details on such rights and their means of exercise;
2) the procedure for voting by proxy, and in particular the forms that shareholders may use to vote by proxy, together with the method for communicating proxies, also be electronic means;
3) identification of the person appointed, if any, by the company upon whom proxy should be conferred and the methods and time limits for conferring proxy by shareholders, specifying that the proxy shall not be valid for proposals for which no voting instructions are given;
4) the procedure for postal or electronic voting, if envisaged in the Articles of Association;
c) the date indicated in Article 83-sexies, subsection 2, specifying that any person proving to be owners of shares only after that date shall not have the right to attend and vote at the shareholders' meeting;
d) the methods and time limits for access to the full text of the proposed resolutions, together with the reports and documents to be considered at the shareholders’ meeting;
e) the address of the web site referred to in Article 125-quater;
f) other information to be indicated in the notice of call pursuant to other provisions495.
Article 125-ter
Disclosure of items on the agenda
1. Unless required under the terms of other legal provisions, by the date of publication of the notice of call to the shareholders' meeting, the board of directors shall make a report on items of the agenda available to the public at the company's registered office, on the company web site and by other means envisaged by Consob regulation.
2. The reports prepared in accordance with law shall be made available to the public by the deadlines specified in such legal provisions, by the means envisaged in subsection 1. The report pursuant to Article 2446, subsection 1 of the Civil Code shall be made available to the public at least twenty-one days prior to the shareholders' meeting. The provisions of Article 154-ter, subsections 1, 1-bis and 1-ter shall remain valid.
3. If the shareholders' meeting is called in accordance with Article 2367 of the Civil Code, the report on proposals relating to items to be discussed shall be made available by the shareholders calling the meeting. The board of directors shall make the report available to the public, accompanied by its own evaluations if any, at the same time as publication of the notice of call to the shareholders’ meeting by the means indicated in subsection 1496.
Article 125-quater
Web site
1. Without prejudice to the provisions of Articles 125-bis and 125-ter, by the date of publication of the notice of call the following shall be made available on the company web site:
a) documents subject to consideration by the shareholders’ meeting;
b) forms that shareholders may use to vote by proxy and, if envisaged in the Articles of Association, for postal voting. If for technical reasons the forms cannot be made available in electronic format, the web site must indicate the method for obtaining printed versions of the form, and in this case the company shall issue the forms by mail, also through intermediaries, free of charge and at the request of any individual shareholder;
c) information regarding the total share capital and an indication of the number and class of shares forming the share capital.
2. A summary report of the votes containing the number of shares represented at the shareholders’ meeting and the shares on which a vote was expressed, the percentage of capital represented by those shares, the number of votes in favour and against the resolution and the number of abstentions, shall be made available on the company web site at least five days prior to the date of the meeting. The minutes of the shareholders’ meeting pursuant to Article 2375 of the Civil Code shall in any event be made available on the web site within thirty days of the date of the meeting497.
Article 126
Notice of second and subsequent calls498
1. [...omissis...]499
2. Unless a single notice of call to shareholders' meetings applies, if the date of second or subsequent call is not indicated in the call notice, the shareholders’ meeting may be called again within thirty days. In this case, the time limit established in Article 125-bis, subsection 1, shall be reduced to ten days provided there are no changes to the items on the agenda500.
3. [...omissis...]501
4. [...omissis...]502
5. [...omissis...]503
Article 126-bis
Additions to the agenda of the shareholders’ meeting
1. Within ten days of publication of the notice of call to the shareholders’ meeting, or within five days if called pursuant to Article 125-bis, subsection 3 or Article 104, subsection 2, shareholders who, individually or jointly, represent at least one fortieth of the share capital may request additions to the list of items on the agenda, indicating the additional matters proposed in their request. Such applications must be made in writing.
2. Additions to the agenda submitted pursuant to subsection 1 shall be disclosed in the written formats described for publication of the notice of call, at least fifteen days prior to the date established for the shareholders’ meeting. This time limit shall be reduced to seven days for shareholders’ meetings called pursuant to Article 104, subsection 2.
3. Additions to the agenda pursuant to subsection 1, shall not include matters on which, in accordance with law, the shareholders' meeting resolves at the proposal of the directors or on the basis of a project or report prepared by the directors, other than those referred to in Article 125-ter, subsection 1.
4. Shareholders requesting additions to the agenda shall prepare a report on the matters they propose to discuss. The report shall be delivered to the board of directors by the final deadline for the submission of requests for additions. The board of directors shall make the report available to the public, accompanied by its own evaluations if any, at the same time as publication of the additions to the agenda by the means indicated in Article 125-ter, subsection 1504.
Article 127
Postal or electronic voting
1. By regulation Consob shall establish the methods for exercising votes and the procedures for shareholders’ meeting in cases envisaged in Article 2370, subsection 4 of the Civil Code505 .
Article 127-bis
Voidability of resolutions and right to withdrawal
1. For the purpose of Article 2377 of the Civil Code, any person on whose behalf shares are registered after the date indicated in Article 83-sexies, subsection 2 and prior to opening of the shareholders’ meeting, shall be considered absent from that meeting.
2. For the purpose of the right to withdrawal envisaged in Article 2437 of the Civil Code, any person on whose behalf shares are registered after the date indicated in Article 83-sexies, subsection 2 and prior to opening of the shareholders’ meeting, registration of those shares shall not be calculated for the approval of resolutions.
3. This provision shall also apply to Italian companies with shares admitted to multilateral trading systems in Italy or in other EU countries with the consent of the issuer506.
Article 127-ter
Right to ask questions prior to the shareholders’ meeting
1. Shareholders may ask questions regarding items on the agenda also prior to the shareholders’ meeting. Questions received prior to the meeting shall at the latest be answered during the meeting. The company may not provide a single answer to questions with the same content.
2. No answer shall be due when the information requested is already available in the form of an “FAQ” in a special section of the company web site507.
Article 127-quater
Dividend increases
1. As an exception to Article 2350, subsection 1 of the Civil Code, Articles of Association may envisage that each share held by the same shareholder for a continuous period as indicated in the Articles of Association, and in any event for not less than one year, grants the right to an increase not exceeding 10 per cent of the dividend distributed on the other shares. The Articles of Association may not envisage other conditions for granting such a benefit. The benefit may also be extended to shares allocated pursuant to Article 2442 of the Civil Code to a shareholder with right to the increase as indicated in subsection 1.
2. If during the period indicated in subsection 1 that person has directly or indirectly held, on a continuous or temporary basis, a shareholding of more than 0.5 per cent of the share capital or lower percentage as indicated in the Articles of Association, the increase may only be granted on shares that in total represent that maximum shareholding. Furthermore, the increase may not be granted on shares held during the aforementioned period by a person who, even temporarily or jointly with other shareholders through a shareholders' agreement as referred to in Article 122, has exercised a dominant or significant influence over the company. In any event, the increase may not be granted on shares which during the period indicated in subsection 1 were continuously or temporarily assigned to a shareholders'agreement as envisaged in Article 122 and in the same period, or part of that period, formed part of a total shareholding exceeding that indicated in Article 106, subsection 1.
3. Disposal of the share, against payment or free of charge, shall result in loss of the benefits envisaged in subsection 1. Such benefits are retained in the event of universal succession, and in the event of merger or spin-off of the owner of the shares. In the event of merger or spin-off of the company issuing the shares indicated in subsection 1, the benefits shall be transferred to shares issued by the resulting companies, without prejudice to the application of subsection 2 in reference to such companies.
4. Shares on which the benefits indicated in subsection 1 are granted shall not constitute a special category of shares pursuant to Article 2348 of the Civil Code508.
Article 128
Complaints to the board of auditors and the courts
[...omissis...]509
Article 129
Company actions for liability
[...omissis...] 510
Article 130
Information for shareholders
1. Shareholders may consult all the documents filed at the company's registered office for shareholders' meetings that have already been called and may obtain a copy thereof at their own expense.
Article 131
Right of withdrawal from mergers and spin-offs
[...omissis...]511
Article 132
Acquisition of own or parent company shares
1. Purchases of treasury shares under Articles 2357 and 2357-bis, subsection 1, paragraph 1 of the Civil Code by companies with listed shares must be made so as to ensure equal treatment of shareholders, according to procedures established by Consob in a regulation.512
2. Subsection 1 shall also apply to purchases of listed shares made under Article 2359-bis of the Civil Code by a subsidiary.
3. Subsections 1 and 2 shall not apply to purchases of own or parent company shares held by employees of the issuing company, subsidiary companies or the parent company and allotted or subscribed for in accordance with Articles 2349 and 2441, eighth subsection, of the Civil Code.
Article 133
Exclusion upon request from trading
1. Subject to approval by an extraordinary shareholders' meeting, Italian companies with shares listed on regulated markets in Italy may request that their own financial instruments be excluded from trading, in accordance with the provisions of the rules of the market, where they are admitted to listing on other regulated markets in Italy or another EU country, provided investors are ensured equivalent protection, according to standards established by Consob in a regulation513 .
Article 134
Increases in capital
1. For companies with listed securities, the deadline envisaged in article 2441514 , subsection 2 of the Italian Civil Code shall be halved.
2. The majority required for extraordinary shareholders' meetings shall apply to resolutions approving increases in capital under the first sentence of the eighth subsection of Article 2441 of the Civil Code, provided the increase does not exceed one per cent of the capital.515
3. [...omissis...]516
Section II-bis517
Cooperatives
Article 135
Capital percentages
1. For cooperatives, the capital percentages identified in the Civil Code for the exercise of shareholder rights shall be a ratio of the total number of shareholders518.
Article 135-bis
Regulations for cooperatives
1. Without prejudice to the exclusions specifically envisaged in this legislative decree, Articles 116 subsection 2-ter, 125-bis, 125-ter, 125-quater, 126 subsection 2, 126-bis, 127-bis, 127-ter, 127-quater, 147-tersubsection 1-bis, final sentence of 148 subsection 2, 154-ter subsections 1, 1-bis and 1-ter and 158 subsection 2 shall not apply to cooperatives. The provisions of this section shall apply to such companies.
Article 135-ter
Market disclosures on the assignment of financial instruments and company officers, employees or collaborators
1. As an exception to Article 114-bis, subsection 1, the report envisaged therein shall be made available to the public at least fifteen days prior to the deadline established for the shareholders’ meeting in accordance with methods established by Consob regulation issued pursuant to Article 113-ter, subsection 3.
Article 135-quater
Extraordinary shareholders’ meeting
1. If the shareholders attending on second call do not represent the number of votes required for due constitution of the meeting, the extraordinary shareholders' meeting may be called again within thirty days. In such cases the time limit established in Article 2366, subsection 2 of the Italian Civil Code shall be reduced to eight days.
Article 135-quinquies
Additions to the agenda of the shareholders’ meeting
1. Within five days of publication of the notice of call, shareholders representing at least one fortieth of the total number of shareholders may request publication of the list of items on the agenda, indicating any other items proposed by shareholders in their request.
2. Additions to the list of items to be discussed by the shareholders’ meeting following requests pursuant to subsection 1 shall be disclosed in the written formats described for publication of the notice of call, at least ten days prior to the date established for the shareholders’ meeting.
3. Additions to the list of items to be discussed pursuant to subsection 1, shall not include matters on which, in accordance with law, the shareholders'meeting resolves at the proposal of the directors or on the basis of a project or report prepared by the directors.
Article 135-sexies
Financial statements
1. Without prejudice to the terms of Article 2429 of the Italian Civil Code, within one hundred and twenty days of the end of the financial year, listed issuers with Italy as their home member country shall approve the financial statements and, by the methods established by Consob regulation issued in accordance with Article 113-ter, subsection 3, publish the annual report containing the separate and consolidated financial statements, where appropriate, the directors’ report and the statement pursuant to art. 154-bis, subsection 5.
Article 135-septies
Audit reports
1. Audit reports pursuant to Article 156 must remain filed with the company's registered office during the fifteen days prior to the shareholders’ meeting or meeting of the supervisory board for approval of the financial statements, and until the financial statements are approved and published in full with the annual report.
Article 135-octies
Share capital increase proposals
1. The directors’ report and the opinion of the independent auditors pursuant to Article 158 shall remain filed with the company's registered office during the fifteen days prior to the shareholders' meeting and until the related resolution has been passed. Such documents must be annexed to other documents required for entry of the resolution in the Register of Companies.
Section II-ter519
Proxies
Article 135-novies
Representation at the shareholders’ meeting
1. Any person with the right to vote may indicate one representative for each shareholders' meeting, without prejudice to the right to indicate replacements.
2. As an exception to subsection 1, any person with the right to vote may appoint a different representative for each account, used to record financial instrument transactions, valid where the communication envisaged in Article 83-sexies has been issued.
3. As a further exception to subsection 1, if the person indicated as owner of the shares in the communication envisaged in Article 83-sexies acts alone or through registered trustees on behalf of his or her customers, the person in question may indicate others on whose behalf he/she acts, or one or more third parties indicated by such customers, as their representative.
4. If the proxy form envisages such an option, the proxy may arrange for personal substitution by another person of his or her choice, without prejudice to compliance with Article 135-decies subsection 4 and to the right of the person represented to indicate one or more substitutes.
5. In place of the original, the representative may deliver or transmit a copy of the proxy, also in electronic format, confirming his or her liability in compliance of the proxy form to the original and the identity of the delegating party. The representative shall retain the original of the proxy form and keep track of any voting instructions received for a period of one year from closure of the shareholders' meetings concerned.
6. By regulation and after consulting Consob, the Ministry of Justice shall establish the methods for issuing proxy in electronic format, in compliance with the provisions of Article 2372, subsection 1 of the Italian Civil Code. In their Articles of Association, companies shall indicate at least one electronic means for notification of the proxy form that shareholders have the right to use.
7. Subsections 1, 2, 3 and 4 shall also apply to cases of share transfer by proxy.
8. All of the above without prejudice to the provisions of Article 2372 of the Italian Civil Code.
Article 135-decies
Conflict of interest of the representative and substitutes
1. Conferring proxy upon a representative in conflict of interest is permitted provided that the representative informs the shareholder in writing of the circumstances giving rise to such conflict of interest and provided specific voting instructions are provided for each resolution in which the representative is expected to vote on behalf of the shareholder. The representative shall have the onus of proof regarding disclosure to the shareholder of the circumstances giving rise to the conflict of interest.
2. In any event, for the purposes of this article, conflict of interest exists where the representative or substitute:
a) has sole or joint control of the company, or is controlled or is subject to joint control by that company;
b) is associated with the company or exercises significant influence over that company;
c) is a member of the board of directors or control body of the company or of the persons indicated in paragraphs a) and b);
d) is an employee or auditor of the company or of the persons indicated in paragraph a);
e) is the spouse, close relative or is related by up to four times removed of the persons indicated in paragraphs a) to c);
f) is bound to the company or to persons indicated in paragraphs a), b), c) and e) by independent or employee relations or other relations of a financial nature that compromise independence.
3. Replacement of the representative by a substitute in conflict of interest is permitted only if the substitute is indicated by the shareholder. In such cases, subsection 1 shall apply. Disclosure obligations and related onus of proof in any event remain with the representative.
4. This article shall also apply in cases of share transfer by proxy.
Article 135-undecies
Appointed representative of a listed company
1. Unless otherwise stated in the Articles of Association, for each shareholders' meeting listed companies shall appoint a person upon whom shareholders may confer proxy, with voting instructions on all or a number of items on the agenda, by the second trading day prior to the date established on first or single call of the shareholders’ meeting. The proxy shall be valid only for proposals on which voting instructions are conferred.
2. Proxy is conferred by signing a proxy form, the content of which is governed by a Consob regulation. Conferring proxy shall be free of charge to the shareholder. The proxy and voting instructions may be cancelled within the time limit indicated in subsection 1.
3.