Legal Framework


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In force from 1st January 2019)

Within the Articles, the changes brought about by Italian Law no. 145 of December 30, 2018 are shown in bold print.

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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 1996[1]

INDEX

PART I COMMON PROVISIONS
   
Article 1 Definitions
Article 2 Relationship to European Union law and integration in ESFS
Article 3 Administrative measures
Article 4 Cooperation between authorities and professional secrecy
Article 4-bis Identification of the competent authority and sector competent authorities for the purpose of Regulation (EC) No. 1060/2009 as subsequently amended, in relation to credit ratings agencies
Article 4-ter Identification of the national authorities with competence pursuant to regulation (EU) no. 236/2012 on short selling and certain aspects of derivative contracts for hedging the credit default swap risk
Article 4-quarter Identification of the national authorities with competence pursuant to regulation (EU) no. 648/2012 of the European Parliament and of the Council, of 4 July 2012
Article 4-quinquies Identification of the national authorities with competence pursuant to regulation (EU) no. 345/2013, relative to the European Venture Capital Fund (EuVECA), and regulation (EU) no. 346/2013, relative to the European Social Entrepreneurship Fund (EuSEF)
Article 4-quinquies.1 Identification of the competent national authorities, pursuant to Regulation (EU) no. 2015/760, in relation to European Long-Term Investment Funds (ELTIF)
Article 4-sexies Identification of the competent national authorities pursuant to regulation (EU) no. 1286/2014, relative to the documents containing the key information for packaged retail investment and insurance products (PRIIPs)
Article 4-septies Power to intervene in the case of breach of the provisions of Regulation (EU) no. 1286/2014
Article 4-octies Internal systems for reporting breach of regulation (EU) no. 1286/2014 (repealed)
Article 4-novies Procedure for reporting to the Supervisory Authorities (repealed)
Article 4-decies Obligation of prior serving of the document containing the key information on the PRIIPs
Article 4-undecies Internal reporting of infringements (Whistle-blowing)
Article 4-duodecies Procedure for reporting to the Supervision Authorities
Article 4-terdecies Exemptions
   
PART II REGULATION OF INTERMEDIARIES
   
TITLE I GENERAL PROVISIONS AND SUPERVISORY POWERS
   
Chapter I Supervision
Article 5 Purpose and scope
Article 6 Regulatory powers
Article 6-bis Informative and investigatory powers
Article 6-ter Powers of inspection
Article 7 Powers of intervention over the qualified parties
Article 7-bis Powers of intervention referred to in Title VII, Chapter I, of (EU) regulation no. 600/2014
Article 7-ter Powers of injunction over National and non EU intermediaries
Article 7-quater Powers of injunction over EU intermediaries
Article 7-quinquies Powers of injunction over EU OICVM, EU and non EU FIA with holdings or shares offered in Italy
Article 7-sexies Suspension of the administrative bodies
Article 7-septies Precautionary powers that can be applied to autonomous financial consultants, financial advisory firms and financial consultants authorised to offer outside their offices
Article 7-octies Powers to counteract abuse
Article 7-novies Capital reserve
Article 7-decies Supervision of compliance with EU provisions that can be directly applied
Article 8 Information requirements
Article 8-bis Internal systems for reporting infringements (whistle blowing) (repealed)
Article 8-ter Reporting of infringements to the Bank of Italy and CONSOB (repealed)
Article 9 Legal audit
Article 10 Inspections supervision (repealed)
Article 11 Composition of groups
Article 12 Supervision of groups
   
Chapter II Corporate officers and shareholders
Article 13 Company representatives
Article 14 Shareholders
Article 15 Acquisition and sale of shareholdings
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 authorisation
Article 18 Persons
Article 18-bis Independent financial advisors
Article 18-ter Financial advisory firm
Article 19 Authorisation
Article 20 Register
Article 20–bis Revocation of the authorisation
   
Chapter II Performance of services
Article 21 General criteria
Article 22 Separation of assets
Article 23 Contracts
Article 24 Portfolio management
Article 24-bis Investment advice
Article 25 Trading activities in regulated markets, in the multilateral systems of Trade and in the organised trading facilities
Article 25-bis Structured deposits and financial products, other than financial instruments, issued by banks
Article 25-ter Insurance investment products
   
Chapter III Cross-border operations
Article 26 Branches and free provision of services by investment firms
Article 27 Investment companies of the European Union
Article 28 Companies of non-EU countries other than banks
Article 29 Italian banks
Article 29-bis Banks of the European Union
Article 29-ter Banks of non-EU countries
   
Chapter IV Governing of door-to-door selling and supervision of its financial advisors
Article 30 Door to door selling
Article 30-bis Method of providing the investment consultancy service by independent financial advisors and of financial advisory firms
Article 31 Financial advisors qualified for door-to-door selling and supervisory body and keeping of the single register of financial advisors
Article 31-bis CONSOB supervision over the Body
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 dispute resolution
Article 32-ter.1 Fund for the out of court protection of savers and investors
   
TITLE III COLLECTIVE ASSETS MANAGEMENT
   
Chapter I Authorised subjects and contemplated businesses
Article 32-quarter Reserve assets
Article 33 Contemplated businesses
   
Chapter I-bis Discipline of authorised subjects
   
Section I Asset management companies
Article 34 Authorisation of asset management companies
Article 35 Register
   
Section II SICAVs and SICAFs
Article 35-bis Constitution
Article 35-ter Registers
Article 35-quarter SICAV capital and shares
Article 35-quinquies SICAF capital and shares
Article 35-sexies The SICAV shareholders' meeting
Article 35-septies Amendments to articles of association
Article 35-octies Winding up and voluntary liquidation
Article 35-novies Transformation
   
Section III Common provisions and exceptions
Article 35-decies Rules of conduct and voting rights
Article 35-undecies Exceptions for Italian AIFMs
Article 35-duodecies Assessment of credit rating
   
Chapter II Italian UCIs
   
Section I Mutual investment funds
Article 36 Mutual investment funds
Article 37 Fund regulations
   
Section II SICAVs and SICAFs under outsourced management
Article 38 SICAVs and SICAFs which appoint an external manager
   
Section III Common provisions
Article 39 Structure of Italian UCIs
   
Section IV Master-feeder structures
Article 40 Authorisation and operating rules of master-feeder structures
   
Section V Merger and spin-off of asset investment bodies
Article 40-bis UCI merger and spin-off
Article 40-ter Cross-border UCI merger
   
Chapter II-bis Management company cross-border operations
Article 41 Cross-border operations of asset management companies
Article 41-bis EU management companies
Article 41-ter EU AIFMs
Article 41-quater Non-EU AIFMs
   
Chapter II-ter Marketing of UCIs
Article 42 Marketing in Italy of EU UCI units and shares
Article 43 Marketing of reserved AIFs
Article 44 Marketing of non-reserved AIFs
   
Chapter II-quarter Obligations of asset management companies of which AIFs acquire relevant stakes and control of non-listed companies and of issuers
Article 45 Obligations relative to the acquisition of relevant stakes or control of non-listed companies
Article 46 Obligations relative to the acquisition of a controlling interest of an issuer
   
Chapter II-quinquies UCITS credit
Article 46-bis Direct issue of loans by Italian AIFs
Article 46-ter Direct issue of loans by EU AIFs in Italy
Article 46-quarter Other applicable provisions
   
Chapter III Custodian
Article 47 Custodian mandate
Article 48 The custodian's duties
Article 49 The custodian's responsibilities
Article 50 Other applicable provisions (repealed)
   
Chapter III-bis Master-feeder structures (repealed)
Article 50-bis Authorisation and operating rules of master-feeder structures (repealed)
   
Chapter III-ter Merger and spin-off of asset investment bodies (repealed)
Article 50-ter UCI merger and spin-off (repealed)
Article 50-quarter Cross-border merger of harmonised UCIs (repealed)
   
Capo III-quater Management of crowdfunding portals for the for the small and medium-sized enterprises and for the social enterprises
Article 50-quinquies Management of crowdfunding portals for the for the small and medium-sized enterprises and for the social enterprises
   
TITLE IV INJUNCTIVE REMEDIES AND CRISES
   
Chapter I Injunctive remedies (repealed)
Article 51 Injunctive remedies vis-a-vis Italian and non-EU intermediaries (repealed)
Article 52 Special measures for EU intermediaries (repealed)
Article 53 Suspension of administrative bodies (repealed)
Article 54 Injunction orders on EU UCITS, EU and non-EU AIFs with stakes or shares offered in Italy (repealed)
Article 55 Precautionary measures applicable to the financial advisors authorised to make off-premises offers (repealed)
   
Chapter I-bis Recovery plans, group financial support and early intervention
Article 55-bis Scope of application
Article 55-ter Recovery plans
Article 55-quarter Group financial support
Article 55-quinquies Early intervention
   
Chapter II Crisis procedures
Article 56 Special administration
Article 56-bis Collective removal of the members of administrative and control bodies
Article 57 Compulsory administrative liquidation
Article 58 Branches in Italy of foreign investment companies and managers
Article 58-bis Investment firms operating in the European Union
Article 59 Compensation systems
Article 60 Foreign intermediaries' member ship of compensation systems
Article 60-bis Responsibilities of investment companies, asset management companies, SICAVs and SICAFs for administrative offences depending on crime
   
Chapter II-bis Winding up of investment companies
Article 60-bis.1 Scope of application
Article 60-bis.2 Winding up plans
Article 60-bis.3 Winding-up possibility
Article 60-bis.4 Winding up and other crisis management procedures
   
PART III REGULATION OF MARKETS
   
TITLE I COMMON PROVISIONS
   
Article 61 Definitions
Article 61-bis Principles of regulations
   
TITLE I–BIS RULES GOVERNING TRADING VENUES AND SYSTEMATIC INTERNALISERS
   
Chapter I Purpose and recipients of the supervision
Article 62 Supervision over trading venues
Article 62-bis Wholesale government securities trading venues and main operators
Article 62-ter Supervision over wholesale trading venues
Article 62-quater Supervision of the regulation and information of wholesale trading venues
Article 62-quinquies Supervision over compliance with directly applicable provisions the European Union
Article 62-sexies Supervision over energy and gas financial instrument trading venues
Article 62-septies Supervision of multilateral monetary deposit exchange in Euros
Article 62-octies Informative and investigatory powers
Article 62-novies Inspectional powers
Article 62-decies Powers of intervention
   
Chapter II The trading venues
Article 63 Multilateral Trading Facilities in financial instruments
   
Section I Authorisation of the regulated markets and operator requirements
Article 64 The activities of organisation and management of regulated markets
Article 64-bis Obligations concerning those who exercise a significant influence over the management of the regulated market
Article 64-ter Requirements of the corporate bodies of the operator of the regulated market
Article 64-quater Authorisation of the regulated markets
Article 64-quinquies Revocation of the authorization, extraordinary provisions to protect the market and the crisis of the regulated market operator
   
Section II Organisation and functioning of the trading venues
Article 65 Organisational requirements of the regulated markets
Article 65-bis Requirements of the multilateral trading facilities and and of the organised trading facilities
Article 65-ter Specific requirements for multilateral trading facilities
Article 65-quater Specific requirements for organised trading facilities
Article 65-quinquies «Matched principal» trading
Article 65-sexies Operational requirements of the trading venues
Article 65-septies Informative and communication obligations
   
Section III Admission, suspension and exclusion of financial instruments from listing and trading
Article 66 General criteria for admission to the listing and trading
Article 66-bis Conditions the listing of certain companies
Article 66-ter Provisions for the admission, suspension and exclusion of financial instruments from listing and trading adopted by the operator of the trading venues
Article 66-quater Provisions of suspension and exclusion of financial instruments from trading at CONSOB’s initiative
Article 66-quinquies Trade of financial instruments issued by operator of the regulated market
   
Section IV Access to the trading venues
Article 67 General operator access criteria
Article 67-bis Admission, suspension and exclusion of operators from a regulated market
Article 67-ter Algorithmic trading, direct electronic access, participation in central counterparties
   
Section V Position limits and controls over the management of the positions in derivatives on commodities
Article 68 Limits to the positions in derivatives on commodities
Article 68-bis Checks by the trading venues operator regarding positions in derivatives on commodities
Article 68-ter Characteristics of limits and checks on the management of the positions and information obligations
Article 68-quater Notification of holders of positions by category
Article 68-quinquies CONSOB’s powers and obligations to collaborate
   
Section VI SME growth markets
Article 69 SME growth markets
   
Section VII Market recognition
Article 70 Market recognition
   
Chapter III Systematic internalisations
Article 71 Obligations of the systematic internaliser
   
Chapter IV Obligations of trading, transparency and signaling transactions in financial instruments
Article 72 Determination of the competent authority
Article 73 Supervision
Article 74 Exemptions from the pre-trade transparency requirements of trading venues
Article 75 Provisions for the temporary suspension of pre-trade transparency obligations
Article 76 Deferred publishing permissions
Article 77 Provisions of temporary suspension of the obligations of transparency post-trade
Article 78 Information to be provided for the transparency and performance of other calculations and publication obligations
   
TITLE I-ter DATA COMMUNICATION SERVICES
Article 79 Determination of the competent authority
Article 79-bis Authorisation and revocation
Article 79-ter Requirements for subjects performing administrative functions at the data communication service provider
Article 79-ter.1 Organisational requirements of the data communication service providers
   
TITLE II REGULATION OF THE CENTRAL COUNTERPARTIES
   
Chapter I Central counterparties
Article 79-quater Definitions (repealed)
Article 79-quinquies Identification of the national competent authorities with regard to central counterparties
Article 79-sexies Authorisation and supervision of central counterparties
Article 79-septies Guarantees acquired in the performance of the central counterparty's activity and prevalence of the provisions on the segregation and portability of the positions and of the customers' guarantees
   
Chapter II Competent national authorities for the exercise of additional supervisory powers
Article 79-octies Identification of competent national authorities for the exercise of additional supervisory powers pursuant to Regulation (EU) no. 648/2012
Article 79-octies.1 Determination of the national authorities competent for the exercise of further supervisory powers pursuant to (EU) regulation no. 600/2014
Article 79-novies Supervisory powers
   
TITLE II-BIS REGULATION OF CENTRAL DEPOSITORIES AND OF REGULATORY AND CENTRALISED MANAGEMENT ACTIVITIES
   
Article 79-decies Definitions
   
Chapter I Competent and relevant national authorities
Article 79-undecies Identification of the competent national authorities for central depositories
Article 79-duodecies Identification of the competent national authorities to carry out the additional functions contemplated by Regulation (EU) No 909/2014
Article 79-terdecies Identification of relevant national authorities
   
Chapter II Supervisory purposes and supervised subjects
Article 79-quaterdecies Supervisory purposes and powers
Article 79-quinquiesdecies Regulation of services
Article 79-sexiesdecies Internal systems of reporting infringements (Whistleblowing) (repealed)
Article 79-septiesdecies Reporting of infringements to Bank of Italy and CONSOB (repealed)
   
Chapter III Central depositories
   
Section I The regulation of centralised depositories
Article 79-octiesdecies Statutory audit of accounts
Article 79-noviesdecies Modifications to the control framework
Article 79-noviesdecies.1 Provisions applicable to the performance of investment services and activities by central depositaries
   
Section II Crises of central depositories
Article 79-vicies Crises
Article 80 Central depository activities in relation to financial instruments (repealed)
Article 81 Enactment regulation and service regulations repealed)
Article 81-bis depository system (repealed)
   
Chapter IV Centralised management of financial instruments
Article 82 Centralised management activities and regulation
   
Section I Dematerialised centralised management
Article 83 Central depositories in crisis (repealed)
Article 83-bis Scope of application
Article 83-ter Issue of financial instruments (repealed)
Article 83-quater Powers of central depositories and of intermediaries
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
Article 83-terdecies Payment of dividends
Article 83-quaterdecies Issuers' access to a central depositary established in another Member State
   
Section II Centralised management of securitised financial instruments
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 financial instruments on deposit
Article 88 Withdrawal of financial instruments on deposit
Article 89 Updating of the shareholders’ register
   
Chapter III Centralised management of government securities
Article 90 Centralised management of government securities
   
TITLE II-TER ACCESS TO THE POST-TRADING INFRASTRUCTURES AND BETWEEN TRADING VENUES AND POST-TRADING INFRASTRUCTURES
   
Chapter I National competent authorities
Article 90-bis Identification of competent national authorities for access to central depositories established in the Republic
Article 90-ter Identification of competent national authorities for access between trading venues and post-trading infrastructures
   
Chapter II Access right and agreements
Article 90-quarter Access to central counterparties on a trans-border basis
Article 90-quinquies Access to transaction settlement services on financial instruments on a trans-border basis
Article 90-sexies Agreements concluded by regulated market operators and multilateral trading facilities with central counterparties or with central depositories which manage regulation services
   
Chapter III Supervision
Article 90-septies Supervisory powers
   
PART IV REGULATION OF ISSUERS
   
TITLE I GENERAL PROVISIONS
   
Article 91 CONSOB's powers
Article 91-bis Communication of the Member State of origin
Article 92 Equal treatment
Article 93 Definition of control
   
TITLE II APPEAL TO 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 offerers
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 Document containing key information for investors and prospectus
Article 98-quater Implementation provisions
Article 98-quinquies Reporting obligations
Article 98-sexies Obligations relating to reporting violations (repealed)
   
Section III Common provision
Article 99 Powers of interdiction
Article 100 Cases of inapplicability
Article 100-bis Circulation of financial products
Article 100-ter Offers via crowdfunding portals
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 113-ter General provisions on regulated disclosures
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 (repealed)
Article 115-ter Information concerning emissions allowances
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 123-ter Report on remuneration
Article 124 Provisions not applicable
   
Section I-bis Information on the adoption of codes of conduct
Article 124-bis Disclosure obligations concerning 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 Integration of the agenda of the shareholders' meeting and presentation of new resolution proposals
Article 127 Postal or electronic voting
Article 127-bis Voidability of resolutions and right to withdrawal
Article 127-ter Right to submit questions prior to the shareholders' meeting
Article 127-quater Dividend increases
Article 127-quinquies Vote increase
Article 127-sexies Multiple-voting shares
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 Regulation of cooperatives
Article 135-ter Market disclosures on the assignment of financial instruments and company officers, employees or collaborators (repealed)
Article 135-quater Extraordinary shareholders’ meeting (repealed)
Article 135-quinquies Integration of the agenda of the shareholders' meeting (repealed)
Article 135-sexies Financial reports (repealed)
Article 135-septies Audit reports (repealed)
Article 135-octies Proposed share capital increase (repealed)
   
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
Article 140 Persons authorised to engage in solicitation
Article 141 Shareholders' associations
Article 142 Proxies
Article 143 Liability
Article 144 Performance of solicitations and collections of proxies
   
Section IV Assets 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 accumulation of positions
Article 149 Duties
Article 15 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
Article 154-quarter Transparency of payments to governments
   
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 Unauthorised 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 the supervisory functions of the Bank of Italy and of CONSOB
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
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 IMARKET ABUSE
   
Chapter I General provisions
Article 180 Definitions
Article 181 Inside information (repealed)
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 and unlawful disclosure of inside information
Article 187-ter Market manipulation
Article 187-ter.1 Sanctions for the infringements of the provisions of Regulation (EU) no. 596/2014 of the European Parliament and Council of April 16, 2014
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 (repealed)
   
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 Application and enforcement of administrative and judicial sanctions
Article 187-quaterdecies Consultation procedures
   
TITLE II ADMINISTRATIVE SANCTIONS
Article 187-quinquiesdecies Safeguarding of the Bank of Italy’s and CONSOB’s supervisory functions
Article 188 Unauthorised use of names
Article 189 Holdings of capital
Article 190 Pecuniary administrative sanctions related to rules governing intermediarie
Article 190.1 Fines regarding the regulation of the centralised management of financial instruments
Article 190.2 Fines for the violation of the provisions of Regulation (EU) no. 909/2014
Article 190.3 Administrative sanctions related to the governing of markets and data communication service
Article 190.4 Pecuniary administrative sanctions relative to the infringements of the provisions of (EU) regulation no. 600/2014, delegated deeds and provisions for the technical regulation and implementation of directive 2014/65/EU and of (EU) regulation no. 600/2014
Article 190.5 Pecuniary administrative sanctions related to credit rating agencies relating to infringements of provisions of (EC) regulation no. 1060/2009
Article 190-bis Liability of corporate officers and staff for violations relating to
the regulation of intermediaries, markets, centralised depositories, centralised management of financial instruments and data communication services
Article 190-ter Other infringements regarding reserved activities (repealed)
Article 190-quater Administrative sanctions related to portal management
Article 191 Public offering of underwriting and sale
Article 192 Takeover bids or exchange tender offerings
Article 192-bis Corporate governance disclosures
Article 192-ter Admission to trading
Article 192-quater Obligation of abstention
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 193-ter Fines for breach of the prescriptions of Regulation (EU) no. 236/2012
Article 193-quarter Fines relative to breach of the provisions issued by Regulation (EU) no. 648/2012 of the European Parliament and of the Council, of 4 July 2012
Article 193-quinquies Pecuniary administrative sanctions in the case of breach of the provisions of regulation (EU) no. 1286/2014
Article 193-sexies Internal reporting systems
Article 194 Proxies
Article 194-bis Criteria for determining sanctions
Article 194-ter Pecuniary administrative sanctions for infringements of the provisions of Regulation (EU) no. 575/2013 and the relevant technical regulations for regulation and implementation
Article 194-quater Order to cease violations
Article 194-quinquies Payment of a reduced amount
Article 194-sexies Harmless conduct
Article 194-septies Public declaration
Article 195 Sanction procedures
Article 195-bis Publication of sanctions
Article 195-ter Communication to EBA and to ESMA of the sanctions applied
Article 195-quater Sanctions in the case of winding up
Article 195-quinquies Inapplicability of specific provisions of Law no. 689 of 24 November 1981
Article 196 Sanctions applicable to financial advisors
Article 196-bis Enactment provisions
   
PART VI TRANSITIONAL AND FINAL PROVISIONS
Article 197 CONSOB staff
Article 198 Endorsement of share certificates
Article 199 Trust companies
Article 200 Intermediaries already authorised
Article 201 Stockbrokers
Article 202 Provisions on compulsory stock exchange settlement (repealed)
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
   
ANNEX I LISTS OF SERVICES AND ACTIVITIES AND FINANCIAL INSTRUMENTS
SECTION A Investment services and activities
SECTION B Ancillary services
SECTION C Financial instruments

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 (National Commission for Companies and the Stock Exchange);

d) "IVASS": the Assurance Supervisory Institute[2];

d-bis) "ESFS": the European System of Financial Supervision comprising the following parts:

1) "EBA": European Banking Authority, established by Regulation (EU) No 1093/2010;

2) "EIOPA": European Insurance and Occupational Pensions Authority, established by Regulation (EU) No 1094/2010;

3) "ESMA": European Securities and Markets Authority, established by Regulation (EU) No 1095/2010;

4) "Joint Committee": the Joint Committee of the European supervisory authorities, envisaged by article 54 of Regulation (EU) No. 1093/2010, of Regulation (EU) No. 1094/2010, of Regulation (EU) No. 1095/2010;

5) "ESRB": European Systemic Risk Board, established by Regulation (EU) No 1092/2010;

6) "Member State supervisory authorities": the competent authorities or supervisory authorities of Member States specified in the deeds of the Union pursuant to article 1, section 2 of Regulation (EU) No 1093/2010, of Regulation (EU) No 1094/2010 and of Regulation (EU) No 1095/2010[3];

d-ter) “EU”:the European Union[4];

d-quater) “investment company”: the company whose usual occupation or activity consists in providing one or more investment services to third parties and/or carrying out one or more investment activities professionally[5];

d-quinquies) “bank”: the bank as defined by article 1, paragraph 1, letter b), of the consolidated banking law[6];

d-sexies) “European Union bank” or “EU bank”: the bank with its registered office and central administration in the same country of the European Union other than Italy[7];

e) “investment firm” (Sim): the investment company with a the form of a legal person with its registered office and general management in Italy, other than banks and financial intermediaries on the register specified by article 106 of the consolidated banking law authorised to carry out investment services or activities[8];

f) “European Union investment company” or “EU investment company”: the investment company different from the bank authorised to carry out investment companies or activities with a registered office and general management in the same state of the European Union, other than Italy[9];

g) “Non-EU country company”: the company that does not have its registered office or general management in the European Union, the activity of which corresponds to that of an EU investment firm or of an EU bank that provides investment services or activities[10];

h) …omissis…[11];

i) "variable capital investment company" (SICAV): open-ended UCI constituted in the form of a joint stock company with variable capital with registered office and general management in Italy with the exclusive purpose of the collective investment of the assets obtained by the offer of its own shares[12];

i-bis) "fixed capital investment company" (SICAF): closed-ended UCI constituted in the form of a joint stock company with fixed capital with registered office and general management in Italy with the exclusive purpose of the collective investment of the assets obtained by the offer of its own shares and other financial instruments of equity held by the same[13];

i-ter) "staff": employees and those who, in any case, operate on the basis of relationships that determine inclusion in the corporate organization, even in a form other than an employment relationship[14];

j) "investment fund": UCI constituted in the form of an enterprise with independent equity, divided into units, set up and managed by a fund manager[15];

k) "Undertaking for Collective Investment" (UCI): body set up to provide the service of the collective management of assets, the capital of which is obtained from multiple investors by the issue and offer of units or shares, managed upstream in the investors' interests and independently by the same and also invested in financial instruments, credit, including credit backed, in favour of subjects other than consumers, by the UCITS capital, equity or other fixed or non-fixed assets, on the basis of a predetermined investment policy[16];

k-bis) "Open-ended UCI": UCI the investors of which have the right to request redemption of the units or shares of the capital of the same, according to procedures and with the frequency contemplated by the regulation, by the articles of association and by the UCI offer documentation[17];

k-ter) "Closed-ended UCI": UCI other than open-ended UCIs[18];

l) "Italian UCIs": investment funds, SICAVs and SICAFs[19];

m) "Italian undertaking for the collective investment in transferable securities" (Italian UCITS): investment funds and SICAVs falling within the scope of the application of Directive 2009/65/EC[20];

m-bis) “Undertaking for the collective investment in EU transferable securities” (EU UCITS): UCIs falling within the scope of application of Directive 2009/65/EC, set up in an EU State other than Italy[21];

m-ter) “Italian alternative UCI” (Italian AIF): investment funds, SICAVs and SICAFs falling within the scope of application of Directive 2011/61/EU[22];

m-quater) “Italian reserved AIF”: Italian AIF, participation in which is reserved to professional investors and the investor categories indicated by the regulation referred to in article 39[23];

m-quinquies) “EU alternative UCI” (EU AIF): UCIs falling within the scope of application of Directive 2011/61/EC, set up in an EU State other than Italy[24];

m-sexies) “Non-EU alternative UCI” (non-EU AIF): UCIs falling within the scope of application of Directive 2011/61/EC, set up in a State not belonging to the EU[25];

m-septies) “European Venture Capital Fund” (EuVECA): UCI falling within the scope of application of Regulation (EU) no. 345/2013[26];

m-octies) “European Social Entrepreneurship Fund” (EuSEF): UCI falling within the scope of application of Regulation (EU) no. 346/2013[27];

m-octies.1) “European Long-Term Investment Funds” (ELTIF): UCI falling within the scope of application of Regulation (EU) no. 2015/760[28];

m-novies) “feeder UCI”: the UCI which invests its assets entirely or mainly in the master UCI[29];

m-decies) “master UCI”: the UCI in which one or more feeder UCIs invest all or most of their assets[30];

m-undecies) ““professional clients or investors”: professional clients as contemplated by article 6, paragraphs 2-quinquies and 2-sexies[31];

m-undecies.1) "Business Angel": investors supporting innovation and having invested directly or indirectly a minimal amount of € 40,000 over the last three years[31-bis].

m-duodecies) “retail clients or retail investors”: the clients or investors who are not professional clients or professional investors[32];

n) "collective asset management": the service which is carried out through the management of UCIs and of the relative risks[33];

o) "asset management company" (società di gestione del risparmio - SGR) shall mean a joint stock company having its registered office and head office in Italy authorised to provide the service of collective portfolio management;[34]

o-bis) "EU management company": company authorised pursuant to Directive 2009/65/EC in an EU State other than Italy, which practises the management of one or more UCITS[35];

p) "EU AIF manager" (AIFM): company authorised pursuant to Directive 2011/61/EU in an EU state other than Italy, which practises the management of one or more AIFs[36];

q) "non-EU AIF manager" (non EU AIFM): company authorised pursuant to Directive 2011/61/EU with registered office in a state not belonging to the EU, which practises the management of one or more AIFs[37];

q-bis) "manager": asset management company, SICAV or SICAF which directly manages its own capital, an EU management company, an EU AIFM, a non-EU AIFM, an EuVECA manager, an EuSEF manager and an ELTIF manager[38];

q-ter) "UCI custodian": the subject authorised in the country of origin of the UCI to undertake mandate as custodian[39];

q-quater) "master UCI custodian or feeder UCI custodian": the custodian of a master UCI or a feeder UCI or, if the master UCI or the feeder UCI is an EU or non-EU UCI, the subject authorised in the Home State to act as custodian[40];

q-quinquies) "UCI units and shares": the units of investment funds, SICAV shares and the shares and other financial instruments held by SICAFs[41];

r) “qualified parties”: investment firms, EU Investment companies with branch in Italy, non-EU country companies authorised in Italy, Sgrs, EU management companies with a branch in Italy, Sicavs, Sicafs, EU AIFM with branch in Italy, non-EU AIFMs authorised in Italy, non EU AIFMs authorised in a company of the EU other than Italy with branch in Italy, as well as the financial intermediaries on the register specified in article 106 of the consolidated banking law, Italian banks and EU banks with branch in Italy authorised to provide investment services or activities[42];

r-bis) “Home Member State of the EU management company”: the EU Member State where the EU management company has its registered office and general management[43];

r-ter) “Home Member State of the UCITS”: EU Member State in which the UCITS was established[44];

r-quater) 'credit rating': an opinion on the credit rating of an entity, as defined by Article 3, paragraph 1, letter a) of Regulation (EC) No 1060/2009[45];

r-quinquies) 'credit ratings agency': a legal entity whose business includes issuing credit ratings on a professional level[46];

s) "services subject to mutual recognition" shall mean the activities and services listed in sections A and B of Annex I to this decree, authorised in the home EU state of origin[47];

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; [48]

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; [49]

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, paragraph 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 offering[50];

w) “listed issuers”: the subjects, Italian or foreign, including trusts, which issue financial instruments listed on a regulated Italian market. In the case of deposit receipts admitted for trading on a regulated market, the term issuer refers to the issuer of the securities represented, even if such securities are not admitted for trading on a regulated market[51];

w-bis) "persons authorised to distribute insurance products": the insurance intermediaries registered in section d) of the Single Register of Insurance Intermediaries referred to in Article 109 of Italian Legislative Decree no. 209 of 2005, the entities of the European Union registered in the annexed list, referred to in article 116-quinquies, paragraph 5, of the Itlaian Legislative Decree no. 209 of 2005, such as banks, securities brokerage firms and investment firms, even when working with collaborators referred to in Section E of the Single Register of Insurance Intermediaris referred to in Article 109 of Legislative Decree no. 209 of 2005[52];

w-bis.1) packaged retail investment and insurance product or PRIIP: a product pursuant to article 4, number 3), of regulation (EU) no. 1286/2014[53];

w-bis.2) packaged retail investment product or PRIP: an investment pursuant to article 4, number 1), of regulation (EU) no. 1286/2014[54];

w-bis.3) insurance investment product: a product pursuant to article 4, number 2), of Regulation (EU) no. 1286/2014. This definition does not include: 1) non-life insurance products listed in Annex I of Directive 2009/138/EC; 2) life insurance contracts, where the contractual benefits are only payable in the event of death or incapacity due to injury, disease or disability; 3) pension products which, under national Italian law, are recognised as having the primary purpose of providing the investor an income in retirement and which allows the investor to enjoy certain benefits, 4) officially recognised corporate or professional pension schemes falling under the scope of Directive 2003/41/EC or Directive 2009/138/EC, 5) individual pension products for which national Italian law requires a financial contribution from employers and in which the worker or employer cannot choose the pension provider or product[55];

w-bis.4) developer of packaged retail investment and insurance products or PRIIP developer: an entity referred to in article 4, number 4), of Regulation (EU) no. 1286/2014[56];

w-bis.5) a PRIIP vendor: a entity referred to under article 4, number 5), of regulation (EU) no. 1286/2014[57];

w-bis.6) PRIIP retail investor: a customer pursuant to article 4, number 6), of regulation (EU) no. 1286/2014[58].

w-bis.7) administers the activity of a regulated market and may coincide with said regulated market[59];

w-ter) “regulated market”: multilateral facility administered and/or managed by a market operator, that permits or facilitates the meeting within it and on the basis of its non-descretional rules, of the multiple buying and selling interests of third parties relative to financial instruments, in such a way as to give rise to contracts relative to financial instruments admitted to trading in conformance with its rules and/or systems and that is authorised and functions regularly and in conformance with part III[60];

w-quater) “listed issuers with Italy as home member state”:

1) the issuers with shares admitted to trading on Italian regulated markets or of another Member State of the European Union, with registered office in Italy[61];

2) issuers of debt securities with a nominal unit value of less than Euro one thousand, or corresponding value in a different currency, admitted to trading on Italian regulated markets or those of another Member State member of the European Union, with registered office in Italy[62];

3) the issuers of securities referred to under numbers 1) and 2), with registered office in a country not belonging to the European Union, which have chosen Italy as Member State of origin from the Member States in which their securities are admitted for trading on a regulated market. The choice of the Member State of origin remains valid unless the issuer has chosen a new Member State of origin pursuant to number 5) and has communicated this choice[63];

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 market of the European Union, or unless the issuer, in the three-year term, is included in the issuers referred to under numbers 1), 2), 3) and 4-bis), of this letter[64];

4-bis) the issuers referred to under numbers 3) and 4) whose securities are no longer admitted for trading on a regulated market of the Member State of origin, but which are admitted for trading on an Italian regulated market or that of other Member States and, if necessary, with registered office in Italy or which has chosen Italy as a new Member State of origin[65]/[66];

w-quater.1) "SME": without prejudice to what is contemplated by other provisions of law, listed small and medium enterprises, whose sales also prior to the admission of their own shares for trading, have a sales volume of less than Euro 300 million, or which have a market capitalisation of below Euro 500 million. Issuers of listed shares which have exceeded both the aforesaid limits for three consecutive years are not considered SMEs. CONSOB establishes by regulation the implementation provisions of this letter, including the disclosure obligations of such issuers in respect of the acquisition or loss of the qualification of SME. CONSOB, on the basis of the information provided by the issuers, publishes the list of SMEs on its own Internet site[67];

w-quinquies) "central counterparties": the subjects indicated in article 2, point 1), of Regulation (EU) no. 648/2012 of the European Parliament and of the Council, of 4 July 2012, concerning OTC derivative instruments, central counterparties and the recorded data on the transactions[68].

w-sexies) “recovery provisions”: the provisions which provide for:

1) the extraordinary administration, and the measures adopted within the sphere of the same;

2) the measures adopted pursuant to article 60-bis.4;

3) the measures, equivalent to those indicated under points 1 and 2, adopted by authorities of other states in the European Union[69].

w-septies) “central securities depositories or central depositories": the subjects indicated in Article 2, sub-section 1, point 1), of Regulation (EU) no. 909/2014 of the European Parliament and of the Council, of 23 July 2014, concerning the improvement of the regulation of securities in the European Union and central depositories of securities[70].

1-bis. “transferable securities” are categories of security that can be traded in capital markets, such as for example:

a) company shares and other titles equivalent to company shares, of partnership or of other parties and share deposit receipts;

b) bonds and other debt titles including the deposit receipts relative to said shares;

c) any other transferable security that permits buying or selling transferable securities indicated in letters a) and b) or that involve spot settlement determined with reference to transferable securities, foreign exchange, interest rates or rates of return, commodities or other indices or measurements[71].

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 bills[72].

1-quater. “deposit receipts” mean titles that can be traded on the capital market, representing the ownership of the securities of a non-domiciled issuer, admissible to trading on a regulated market and traded independently of the securities of the non-domiciled issuer[73].

2. “Financial instrument” means any instrument shown in Section C of Annex I. The payment instruments are not financial instruments[74].

2-bis. The Minister of Economy and Finance through the regulation referred to in article 18, paragraph 5, can establish:

a) other derivative contracts referred to in point 7, Section C, of Annex I with the characteristics of other derivative financial instruments;

b) the other derivative contracts referred to in point 10, Section C, of the Annex I with the characteristics of other derivative financial instruments, traded in a regulated market, in a multilateral trading facility or in an organised trading facility[75].

2-ter. In this legislative decree the following applies:

a) “derivative instruments” mean financial instruments mentioned in Annex I, Section C, points from 4 to 10, as well as the financial instruments provided for in paragraph 1-bis, letter c);

b) “derivatives on commodities” are financial instruments referring to commodities or underlying activities referred to in Annex I, Section C, points 5), 6), 7) and 10), as well as the financial instruments specified in paragraph 1-bis, letter c), when they refer to commodities or underlying activities mentioned in Annex I, Section C, point 10);

c) “derivative contracts on C6 energy products” mean option contracts, standardized forward contracts, swaps and all the other derivative contracts concerning coal or petrol mentioned in Section C, point 6, of Annex I that are traded in an organised trading facility and must be regulated with physical delivery of the underlying[76].

3. …omissis… [77]

4. …omissis… [78]

5. "Investment services and activities" shall mean the following activities where they concern financial instruments:

a) trading  for own account;

b) execution of orders for clients[79];

c) underwriting and/or placement based on an irrevocable commitment towards the issuer[80];

c-bis) placement without irrevocable commitment to issuers[81]

d) portfolio management;

e) reception and transmission of orders;

f) investment consultancy[82];

g) management of multilateral trading facilities.

g-bis) management of organised trading facilities[83].

5-bis. "Trading on own account" is intended as buying and selling financial instruments, directly[84].

5-bis.1. “Multilateral facility” is taken to mean a system that allows the interaction between third party buying and selling relative to financial instruments[85].

5-ter. “Systematic internaliser” is taken to mean the investment company that trades outside a regulated market, a multilateral trading facility or an organised trading facility in an organised, frequent, systematic and substantial way on own account filling the orders of the clients without managing a multilateral facility. The frequent and systematic mode is measured by the number of trades of list (OTC) on financial instruments performed on own account filling the orders of the clients. The substantial mode is measured by the size of the OTC trading affected by the party on a specific financial instrument in relation to the total of trades carried out on the financial instrument by the said party or inside the European Union[86].

5-quater. “Market maker” means a person who, within the trading venues and/or outside them, on an ongoing basis presents him or self as prepared to trade on own account buying and selling financial instruments directly at prices defined by the same[87].

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 customers[88].

5-sexies. The service pursuant to paragraph 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 mediation[89].

5-septies. “Investment consultancy” is meant as the provision of recommendations tailored to a client following a request or on the initiative of the provider of the service, concerning one or more transactions relative to financial instruments[90].

5-septies.1. “Filling of orders for clients” is meant as the conclusion of agreements for the purchase or sale of one or m more financial instruments on behalf of clients, including the conclusion of agreements for the subscription or sale of financial instruments issued by an investment company or a bank at the time of their issue[91].

5-septies.2. “Associate agent” means the natural or legal person who, under the full and unconditional responsibility of a single investment company for whom he/she/it works, promotes investment services and/or additional services at the clients’ or potential clients’ premises, receives and transmits instructions or clients’ orders regarding investment services or financial instruments, places financial instruments or provides consultancy to clients or potential clients with regard to said instruments or financial services[92].

5-septies.3. “Financial consultant authorised to make door-to-door sales” means the natural person in the appropriate section of the register required under article 31, paragraph 4, of this decree that, in the capacity of an associated agent, professionally makes door-to-door sales as an employee, agent or principal[93].

5-octies. In this legislative decree the following definitions are intended:

a) “multilateral trading facility”: a multilateral facility managed by an investment company or by a market operator that permits the meeting, within it and on the basis of non-discretionary rules, of multiple third-party buying and selling interests relative to financial instruments, in such a way as to provide the environment for contracts in conformance with parts II and III;

b) “organised trading facility”: a multilateral facility different from a regulated market or a multilateral trading facility that permits the interaction among multiple third-party buying and selling interests relative to bonds, structured financial instruments and stakes of issues and derivative instruments, in such a way as to provide the environment for contracts in conformance with parts II and III;

c) “trading venues”: a regulated market, a multilateral trading facility or an organised trading facility[94].

5-octies.1. “Order with price limits” mean a buying or selling order for a financial instrument at the fixed price limit or a more advantageous price and for a fixed quantity[95].

5-novies. “Portal for the raising of capital for the small and medium-sized businesses and for the social enterprises” means an on line platform the exclusive purpose of which is the streamlining of the raising of risk capital by small and medium-sized businesses, as defined by article 2, section 1, letter (f), first sentence, of the (EU) regulation 2017/1129, of social enterprises and of collective investment undertakings or of other companies that prevalently invest in small and medium-sized businesses and in fundraising through bonds or debt securities made by small and medium-sized enterprises[96].

5-decies. …omissis…[97]

5-undecies. …omissis…[98]

5-duodecies. "Social enterprises" are defined as social enterprises within the meaning of the legislative decree 3 July 2017, n. 112, formed in the form of capital companies or cooperatives.[99]

6. “Additional service” means any service included in Section B of Annex I[100].

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 paragraph of Article 2351 of the Civil Code.[101]

6-bis.1. “Parent company” meaning as holding company pursuant to articles 2, section 9, and 22 of the directive 2013/34/EU[102].

6-bis.2. “Subsidiary company” means a subsidiary company pursuant to articles 2, section 10, and 22 of the directive 2013/34/EU; the subsidiary company of a subsidiary company is similarly considered a subsidiary company of the parent company that is at the head of these companies[103].

6-bis.3. “Close ties” means the situation which two or more natural or legal persons are linked:

a) by a «holding», in other words by the fact of holding, directly or through a controlling tie, 20 percent or more of the voting rights or of the share capital of a company;

b) by a «control» tie, in other words by the relationship existing between a parent company and a subsidiary company, in all the cases referred to in article 22, sections 1 and 2, of the directive 2013/34/EU, or a similar relationship between natural and legal persons and a company, in which case every subsidiary company of a subsidiary company is considered a subsidiary company of the parent company that heads all these companies;

c) by a long-standing link between two or all the abovementioned persons and a party that is a controlling relationship[104].

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[105].

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[106].

6-quinquies. “Algorithmic trading” means the trading of financial instruments where a computer algorithm automatically determines the individual parameters of the orders, as for example the initiation of the order, the relevant timeline, the price, the quantity or the method the order is managed after sending, with minimal or no human intervention, with the exception of the systems used simply to send the orders to one or more trading venues, to treat orders that do not involve the establishment of trading parameters, to confirm orders or carry out the regulation of the transactions[107].

6-sexies. “Direct electronic access” means an agreement on the basis of which a member or an investor or a client of trading venues permits a third party to use his or her trading password for the sending of orders relative to a financial instrument to the trading venues directly, both in the case where the agreement involves the use by third part of the member’s infrastructure, investor or client, or of any system for connection provided by the member, investor or client for sending the orders (direct access to the market) in the case where there is no such use (sponsored access) [108].

6-septies. “High-frequency algorithmic trading technology” means any algorithmic trading technology characterised by:

a) infrastructures aimed at reducing the network latency to a minimum and other types, including at least one of the structures for the algorithmic inputting of orders: collocation, proximity hosting or high-speed direct electronic access;

b) establishment by the system of the initialisation, generation, transmission or carrying out of orders without human intervention for the single order or trade, and

c) elevated intra-day traffic of messages consisting of orders, quotations or cancellations[109].

6-octies. “Matched principal trading” means trading where the party that is interposed between the buying and the seller is never exposed to market risk during the entire execution of the operation, with the purchase and the sale carried out simultaneously at a price that does not allow said party to make a profit or a loss, exception being made for the commissions, fees or charges for the transaction previously communicated[110].

6-novies. “Practice of bundled selling” means the offer of an investment service together with another service or product as part of a package or as a condition obtaining the same agreement or package[111].

6-decies. “Structured deposit” means a deposit as defined in article 69-bis, paragraph 1, letter c), of the consolidated banking law that is refundable in full on the maturity date on the basis of terms on agreement with which any interest or premium will be reimbursed (or it is at risk) on agreement with a formula including factors such as:

a) an index or a combination of indices, except the variable rate deposits the return on which is directly linked to the rate of interest such as the Euribor or Libor;

b) a financial instrument or a combination of the financial instruments;

c) a commodity or combination of commodities or other non-fungible, tangible, or intangible assets; or

d) a rate of exchange or a combination of rates of exchange[112].

6-undecies. This legislative decree contains the following definitions:

a) “authorised publication arrangement” or “APA”: a party authorised pursuant to directive 2014/65/EU to publish the report of transactions concluded on behalf of Investment companies pursuant to articles 20 and 21 of the (EU) regulation no. 600/2014;

b) “provider of a consolidated publication system” or “CTP”: a party authorised pursuant to directive 2014/65/EU to provide the collection service in regulated markets, multilateral trading facilities, organised trading facilities and APAs of the report of the transactions concluded for the financial instruments referred to in articles 6, 7, 10, 12, 13, 20 and 21 of (EU) regulation n 600/2014 and to consolidate the abovementioned information into an electronic data flow implemented in continuation, able to provide information about prices and volumes for each financial instrument;

c) “authorised reporting mechanism” or “ARM”: a party authorised pursuant to directive 2014/65/EU to report complete information regarding the transactions concluded to the competent authorities or to the AESFEM on behalf of the investment companies;

d) “data communication services”: the management of an authorised publication arrangement (APA) or a consolidated publication system (CTP) or an authorised reporting mechanism (ARM);

e) “data communication service provider”: an APA, a CTP or an ARM[113].

6-duodecies. This legislative decree contains the following definitions:

a) “Original member state of the investment company”:

1) if the investment company is a natural person, the member state is where this person has his or her principal offices;

2) if the investment company is a legal person, the member state is where it has its registered office;

3) if, on the basis of national law to which it is subject, the investment company does not have a registered office, the member state is where its general administration department is situated;

b) “Original member state of the regulated market”: the member state where the regulated market is regulated or if, on the basis of the national law of that member state said market does not have a registered office, the member state in which its general administration department is situated;

c) “Original member state of an APA, of a consolidated publication system or of an authorised reporting mechanism”:

1) if the authorised publication arrangement, authorised reporting mechanism or consolidated publication system is a natural person, the member state in which said person has its general administration department;

2) if the authorised publication arrangement, the authorised reporting mechanism or the consolidated publication system is a legal person, the member state in which it has its registered office;

3) if, on the basis of national law to which it is subject, the authorised reporting mechanism or the consolidated publication system does not have a registered office, the member state is where its general administration department is situated[114].

6-terdecies. In this legislative decree the following definitions are given:

a) “Member state hosting the investment company”: the member state different from the original state in which an investment company has a branch or provides investment services and/or carries out investment activities;

b) “Member state hosting the regulated market”: the member state in which a regulated market adopts appropriate measures in such a way as to facilitate access to distance trading in its system by members or investors settled in said member state[115].

6-quaterdecies. “Wholesale energy product” means a wholesale energy product as defined in article 2, point 4, of (EU) regulation no. 1227/2011[116].

6-quinquiesdecies. “Derivatives on agricultural commodities” are contract derivatives connected with products referred to in article 1 and Annex I, parts from I to XXIV/1 of (EU) regulation no. 1308/2013[117].

6-sexiesdecies. “Sovereign issuer” means one of the following debt instrument issuers:

a) The European Union;

b) a member state, including a ministry, an agency or a vehicle company of said member state;

c) in the case of a federal member state, a member of the federation;

d) a vehicle company on behalf of various member states;

e) an International finance body consisting of two or more member states with the aim of mobilising resources and providing financial assistance to the benefit of its members that are facing or are threatened by serious financial crises; or

f) The European Investment Bank[118].

6-septiesdecies. “Sovereign debt” means a debt instrument issued by a sovereign issuer[119].

6-octiesdecies. “Durable medium” means any instrument that:

a) allows the client to store information addressed to him or her personally, in such a way that it can easily be retrieve for a period of time that is adequate for the purposes for which said information is intended; and

b) that allows the unchanged reproduction of the stored information[120].

Article 2
Relationship to European Union law and integration in ESFS

1. The Ministry of the Economy and Finance, the Bank of Italy and CONSOB shall exercise the powers conferred on them in harmony with the provisions of the European Union, apply the regulations and decisions of the European Union and act on the recommendations concerning matters governed by this decree.

2. In exercising their respective competences, the Bank of Italy and CONSOB are parties to the ESFS and participate in its activities, considering the convergence within Europe of supervisory practices and instruments.

2-bis. The authorities indicated in paragraph 1 shall exercise, each to the extent applicable, the intervention powers attributed to them by Parts I and II of this Legislative Decree also to ensure compliance with EU regulation no. 575/2013, the relevant technical regulatory and implementing rules issued by the European Commission pursuant to Articles 10 and 15 of EU Regulation no. 1093/2010, or in the event of non-compliance with the directly applicable ESMA and EBA acts adopted under these regulations[121].

3. In cases of crisis or tension on financial markets, the Bank of Italy and CONSOB consider the effects of their action on the stability of the financial system of the other Member States, also using the appropriate exchange of information with European Securities and Markets Authority, the Joint Committee, European Systemic Risk Board and the supervisory authorities of other Member States[122].

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 the provisions of a general nature of the Bank of Italy and of CONSOB are published in the Official Gazette. The other provisions relevant to the parties subject to supervision are published on the Internet site of the Bank of Italy or of CONSOB. The provisions of article 195-bis in as far as they are applicable are applied[123].

4. By 31 January of each year the Ministry of the Economy and Finance,[124] 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 [125]
Cooperation between authorities and professional secrecy

1. The Bank of Italy, CONSOB, the Commissione di vigilanza sui fondi pensioni and IVASS 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[126].

2. The Bank of Italy and CONSOB collaborate, also through the exchange of information, with the authorities and committees comprising the ESFS and the European Central Bank (EBC), in order to facilitate their respective duties. In the cases and ways established by European legislation, they fulfil the disclosure obligations with regards to said parties and other authorities and institutions indicated by the provisions of the European Union[127].

2-bis. For the purposes specified under paragraph 2, CONSOB and the Bank of Italy can stipulate cooperation agreements with the competent authorities of the European Union Member States and with AESFEM and the ECB which may provide for the mutual delegation of supervisory duties. CONSOB and the Bank of Italy may use ESMA to solve disputes with the supervisory authorities from the other Member States in cross-border situations[128].

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 of trading venues and data communication services. 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 CONSOB[129].

3. The Bank of Italy and CONSOB may cooperate by exchanging information and otherwise with the competent authorities of non-EU countries[130].

4. Information received by the Bank of Italy and CONSOB pursuant to paragraphs 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.[131]

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 the central counterparties and the central depositories[132];

d) with the managers of the trading venues, for the purpose of guaranteeing the smooth functioning of the venues managed by them[133].

5-bis. The exchange of information with authorities of non-EU countries shall be subject to the existence of provisions concerning professional secrecy.[134]

6. The information referred to in paragraph 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 measures taken by them. 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.[135]

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. In order to facilitate the supervision on a consolidated basis with regards to groups operating in several different European Community States, on the basis of agreements reached with the competent authorities, the Bank of Italy defines forms of collaboration and coordination, institutes supervisory boards and participates in the boards instituted by other authorities. Under this scope, the Bank of Italy may agree specific allocations of tasks and delegations of functions[136].

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.[137] 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.

13-bis. For cooperation, by the exchange of information, which the competent authorities of European Union Member States and with ESMA, CONSOB and the Bank of Italy establish with the Ministry of Justice, also on the basis of a memorandum of understanding, the procedures for obtaining information on the criminal sanctions applied by the Judicial Authority, for the offences contemplated under Article 2638 of the Civil Code and Articles 166, 167, 168, 169, 170-bis and 173-bis, for successive communication to ESMA, pursuant to Article 195-ter, paragraph 1-bis[138].

13-ter. For the same purposes as paragraph 13-bis and without prejudice to the ban pursuant to Article 329 of the Code of Criminal Procedure, CONSOB and the Bank of Italy may request information from the relevant judicial authority in regard of the investigations and criminal proceedings for the offences contemplated by paragraph 13-bis [139].

Article 4-bis
Identification of the competent authority and sector competent authorities for the purpose of Regulation (EC) No. 1060/2009 as subsequently amended, in relation to credit ratings agencies

1. CONSOB is the competent authority in accordance with Article 22 of Regulation (EC) No 1060/2009 of the European Parliament and Council of 16 September 2009 relative to the credit ratings agencies, and exercises the powers envisaged by said Regulation.

2. CONSOB, the Bank of Italy, IVASS and COVIP are the competent sector authorities in accordance with Article 3, paragraph 1, letter r) of the regulation pursuant to paragraph 1. Said authorities collaborate and exchange information, also on the basis of specific memorandums of understanding[140].

Article 4-ter
Identification of the national authorities with competence pursuant to regulation (EU) no. 236/2012 on short selling and certain aspects of derivative contracts for hedging the credit default swap risk

1. The Ministry of Economy and Finance, the Bank of Italy and CONSOB are the national competent authorities pursuant to regulation (EU) n° 236/2012 relative to short selling and certain aspects of derivative contracts for hedging the credit default swap risk, as laid down by the following paragraphs.

2. CONSOB is the competent authority for receiving the notifications, implementing the measures and exercising the functions and powers contemplated by the regulation referred to in paragraph 1 in reference to financial instruments other than sovereign debt instruments and credit default swaps of sovereign issuers.

3. Without prejudice to the provision of paragraph 4, the Bank of Italy and CONSOB, within the sphere of their respective powers, are the competent authorities for receiving the notifications, implementing the measures and exercising the functions and powers contemplated by the regulation referred to in paragraph 1 in respect of sovereign debt instruments and credit default swaps of sovereign issuers.

4. With regard to sovereign debt and credit default swaps of sovereign issuers, the powers of temporary suspension of the restrictions and powers to intervene in exceptional circumstances, contemplated by the regulation referred to in paragraph 1, are exercised by the Ministry of Economy and Finance, on proposal by the Bank of Italy and after consultation with CONSOB.

5. CONSOB is the authority responsible for coordinating the cooperation and exchange of information with the European Union Commission, AESFEM, and the competent authorities of the other Member States, pursuant to article 32 of the regulations referred to in paragraph 1.

6. In order to coordinate the exercise of the functions referred to in paragraphs 3 and 4, the Ministry of Economy and Finance, the Bank of Italy and CONSOB, by means of a memorandum of understanding, establish the procedures of the cooperation and of the reciprocal exchange of relevant information in order to exercise the aforesaid functions, also in the case of irregularities found and the measures adopted in the exercise of their respective duties and the procedures for receiving the aforesaid notifications, taking into account the need to reduce to a minimum the costs bearing on the operators.

7. The Bank of Italy and CONSOB, to fulfil their respective duties as defined by this article and to ensure respect for the measures adopted pursuant to the Regulation referred to in paragraph 1, including those delegated to the Ministry of Economy and Finance pursuant to paragraph 4, hold the powers contemplated by article 187-octies[141].

Article 4-quater [142]
Identification of the national authorities with competence pursuant to regulation (EU) no. 648/2012 of the European Parliament and of the Council, of 4 July 2012

1. …omissis… [143]

2. …omissis… [144]

2-bis. Bank of Italy, CONSOB, IVASS and the Commissione di vigilanza sui fondi pensioni (COVIP) are the competent authorities for the respect of the obligations under the terms of the regulation (EU) no. 648/2012 referred to entities supervised by the same authorities, according to the respective powers of supervision[145].

3. Pursuant to Article 10, paragraph 5, of the Rules referred to paragraph 2-bis, CONSOB is the competent authority in respect of non-financial counterparties that are not subject to supervision by any other authority in accordance with paragraph 2-bis of the this Article, compliance with the obligations laid down in Articles 9, 10 and 11 of that Regulation. For this purpose CONSOB exercises the powers contemplated by article 187-octies of this Legislative Decree, according to the procedures established thereby, and can dictate provisions on the procedures for the exercise of supervisory powers[146].

4. …omissis… [147]

5. …omissis… [148]

Article 4-quinquies [149]
Identification of the national authorities with competence pursuant to regulation (EU) no. 345/2013, relative to the European Venture Capital Fund (EuVECA), and regulation (EU) no. 346/2013, relative to the European Social Entrepreneurship Fund (EuSEF)

1. The Bank of Italy and CONSOB, according to their respective powers and purposes indicated in article 5, are the national authorities with competence pursuant to regulation (EU) no. 345/2013 and regulation (EU) no. 346/2013. The Bank of Italy and CONSOB transmit without delay the information they must each receive pursuant to this article.

2. The Bank of Italy, after consulting CONSOB, for parties not registered on the registers provided for by articles 35 and 35-ter, registers and cancels Italian EuVECA and EuSEF managers pursuant to article 14 of regulation (EU) no. 345/2013 and article 15 of regulation (EU) no. 346/2013. Such managers are listed in a separate section of the register referred to in article 35, held by the Bank of Italy. Articles 35, paragraphs 2 and 3, and 35-undecies and the relative enactment rules are applied as far as compatible with regulation (EU) no. 345/2013 and regulation (EU) no. 346/2013[150].

3. The Bank of Italy is the authority with competence to receive from Italian EuVECA and EuSEF managers the communication required by article 15 of regulation (EU) no. 345/2013 and article 16 of regulation (EU) no. 346/2013. It also receives the communication of the intention of changing the domicile of the premises of a UCI, contemplated by article 16 of regulation (EU) no. 345/2013 and article 17 of regulation (EU) no. 346/2013.

4. CONSOB severs the notifications contemplated by article 16 of regulation (EU) no. 345/2013 and article 17 of regulation (EU) no. 346/2013 on the competent authorities of the Member States in which the Italian EuVECA and EuSEF managers are registered pursuant to paragraph 2 intend to market the relative UCIs in compliance with the rulings of the said regulations.

5. EuVECA or EuSEF managers established in a Member State other than Italy which satisfy the requisites of regulations (EU) no. 345/2013 and no. 346/2013 and which intend to market in Italy the UCIs which they manage, must provide for the serving, through the competent authority of the Home State, of the notification required by article 16 of regulation (EU) no. 345/2013 and article 17 of regulation (EU) no. 346/2013, once they have obtained registration pursuant to the said regulations. CONSOB is the authority to which said notification must be delivered.

6. If the threshold indicated in article 3, paragraph 2, letter b), of Directive 2011/61/EU, the provisions contemplated for the manager by this legislative decree and the relative enactment provisions apply to the managers indicated in paragraphs 2 and 5. In such a case, the name EuVECA or EuSEF can be maintained only if contemplated by the aforesaid EU regulations.

7. To ensure respect for this article, and for the regulations indicated in paragraph 1, the Bank of Italy and CONSOB, according to their respective powers and purposes pursuant to article 5, have the faculties attributed to the same by this legislative decree.

Article 4-quinquies.1
Identification of the competent national authorities, pursuant to Regulation (EU) no. 2015/760, in relation to the European Long-Term Investment Funds (ELTIF)

1. The Bank of Italy and CONSOB, in accordance with their respective attributions and the purposes indicated under article 5, are the competent national authorities pursuant to Regulation (EU) no. 2015/760.

2. The Bank of Italy is the competent authority for authorising the management of an ELTIF by an operator and approving the regulation of the ELTIF in compliance with article 5 of Regulation (EU) no. 2015/760. In the case of the first institution of an ELTIF by an operator, the authorisation isissued by the Bank of Italy, after consulting CONSOB, for the profiles indicated under article 5, paragraph 1, letter d) of Regulation (EU) no. 2015/760. The Bank of Italy registers authorised operators in a separate section of the register, as referred to in articles 35 and 35-ter. Articles 35, paragraphs 2 and 3 and 35-ter, paragraphs 2 and 3 shall apply.

3. The Bank of Italy authorises the extension provided for by article 17, paragraph 1 of Regulation (EU) no. 2015/760.

4. CONSOB is the competent authority for:

a) receiving the notification provided for by article 31, paragraph 1 of Regulation (EU) no. 2015/760 from the asset management company and the SICAF that manage the ELTIF for the marketing in Italy of the units or shares of the ELTIF to professional and retail investors;

b) receiving the notification provided for by article 31, paragraph 1 of Regulation (EU) no. 2015/760 from the asset management company and the SICAF that manage the ELTIF for the marketing in an EU Member State other than Italy of the units or shares of the ELTIF to professional and retail investors;

c) receiving the notification provided for by article 31, paragraph 1 of Regulation (EU) no. 2015/760 from the authority of the EU Member State of origin of the operator of the ELTIF for the marketing in Italy of the units or shares of the ELTIF to professional and retail investors;

d) fulfilling the disclosure obligations towards ESMA provided for by article 3, paragraph 3 of Regulation (EU) no. 2015/760;

e) receiving the prospectus, and relative amendments, referred to in article 24, paragraph 1 of Regulation (EU) no. 2015/760 according to the methods and terms established under its own regulations.

5. Article 43 and the related implementing provisions shall apply, insofar as compatible, to the notification procedures referred to in paragraph 4, letters a), b) and c); the agreement of the Bank of Italy provided for in paragraphs 4 and 5 of this article and the acquisition of the opinion of this authority pursuant to paragraphs 6 and 8 of the same article are not required.

6. CONSOB identifies in its regulations any additional information to be included in the prospectus in relation to the information required under article 23, paragraphs 2, 3 and 4 of Regulation (EU) no. 2015/760, in order to enable investors to perform informed assessment of the investment offered to them and, in particular, of the related risks.

7. In order to ensure compliance with this article, as well as with the regulation indicated under paragraph 1, the Bank of Italy and CONSOB have, according to the respective attributions and the purposes of article 5, the powers attributed to them by this decree on collective investment schemes, as well as the powers envisaged by Regulation (EU) no. 2015/760[151].

Article 4-sexies [152]
Identification of the competent national authorities pursuant to regulation (EU) no. 1286/2014, relative to the documents containing the key information for packaged retail investment and insurance products (PRIIPs)

1. CONSOB and IVASS are the competent national authorities designated pursuant to article 4, number 8), of regulation (EU) no. 1286/2014 for monitoring compliance with the obligations that the same regulation (EU) no. 1286/2014 imposes on PRIIP developers and on the persons who provide advice on PRIIPs or who sell PRIIPs, also by the respective supervisory, investigation and sanctioning powers, according to the respective attributions and in accordance with the provisions of this article.

2. For the purposes of paragraph 1, CONSOB is the competent authority for:

a) ensuring observance of the obligations imposed by regulation (EU) no. 1286/2014 on PRIIP developers and on the persons that provide advice on PRIIPs or who sell PRIIPs, without prejudice to the provision of paragraph 3, letter a), for the insurance intermediaries indicated therein;

b) exercising, with reference to the insurance investment products marketed, distributed or sold in Italy, or originating from Italy, the monitoring activity and the powers contemplated by articles 15, paragraph 2, 17 and 18, paragraph 3, of regulation (EU) no. 1286/2014, as regards investor protection or the integrity and orderly functioning of the markets, without prejudice to the provision of paragraph 3, letter b), for the subjects indicated therein[153];

c) receiving from the PRIIP developer, or from the person who sells a PRIIP, prior serving of the document containing the key information conforming to the requisites laid down by regulation (EU) no. 1286/2014, before the PRIIPs are marketed in Italy, and the notification of the reviewed versions of the document itself pursuant to article 10 of the said regulation.

3. For the purposes of paragraph 1, IVASS is the competent authority for:

a) ensuring observance of the obligations imposed by regulation (EU) no. 1286/2014 on PRIIP developers and on the persons who provide advice on PRIIPs, or who sell PRIIPs, in the case of products distributed by the insurance intermediaries pursuant to article 109, paragraph 2, letters a) and b) of Italian Legislative Decree no. 209 of 07 September 2005, by the other subjects of whom these insurance intermediaries may take avail listed in the section of the register referred to under letter e) of article 109, paragraph 2, of Italian Legislative Decree no. 209 of 07 September 2005, and by the subjects listed in the section of the register referred to by letter c) of article 109, paragraph 2, of Italian Legislative Decree no. 209 of 07 September 2005;

b) exercising, with reference to the insurance investment products marketed, distributed or sold in Italy, the activity of monitoring and the powers pursuant to articles 15, paragraph 2, 17 and 18, paragraph 3, of regulation (EU) no. 1286/2014 in the case of products distributed by insurance companies and insurance intermediaries pursuant to article 109, paragraph 2, letters a) and b), of Italian Legislative Decree no. 209 of 07 September 2005, by the other subjects of which these insurance intermediaries may take avail listed in the section of the register referred to under letter e) of article 109, paragraph 2, of Italian Legislative Decree no. 209 of 07 September 2005, and by the subjects listed in the section of the register referred to under letter c) of article 109, paragraph 2, of Italian Legislative Decree no. 209 of 07 September 2005[154];

c) exercising, with reference to the insurance investment products marketed, distributed or sold in Italy, or originating from Italy, the monitoring activity and the powers contemplated by articles 15, paragraph 2, 17 and 18, paragraph 3, of Regulation (EU) no. 1286/2014 regarding the profiles involved in the stability of the financial and insurance system or a part of the same[155].

4. CONSOB and IVASS, in respect of the reciprocal independence, identify forms of operational coordination, also pursuant to article 20 of Italian Law no. 262 of 28 December 2005, for the exercise of the duties and powers attributed to the same pursuant to this article, also through memoranda of understanding, without new or higher charges bearing on the public finance, pursuing the aim of simplifying, where possible, the burden for the subjects supervised. CONSOB and IVASS collaborate together, also pursuant to article 21 of Italian Law no. 262 of 28 December 2005, to facilitate the exercise of the duties and powers attributed to the same pursuant to this article and article 4-septies and they reciprocally communicate the provisions adopts pursuant to articles 17 and 18, paragraph 3, of regulation (EU) no. 1286/2014[156].

5. CONSOB, after consulting IVASS, adopts with its own regulations the implementation provisions of paragraph 2, establishing in any case a discipline for the methods of absolving the obligations of prior serving of the document containing the key information referred to under paragraph 2, letter c) and article 4-decies, in conformity to the delegated deeds and the technical regulating provisions adopted by the European Commission pursuant to regulation (EU) no. 1286/2014.

6. IVASS, after consulting CONSOB, adopts, with its own regulations, the implementation provisions of paragraph 3.

7. CONSOB and IVASS adopt the provisions referred to under paragraphs 5 and 6 having regard to the need to simplify, where possible, the charges for the supervised subjects and the distribution of the duties according to the principles indicated under paragraphs 2 and 3.

Article 4-septies [157]
Power to intervene in the case of breach of the provisions of Regulation (EU) no. 1286/2014

1. Without prejudice to the attributions and powers pursuant to articles 15, paragraph 2, 17 and 18, paragraph 3, of regulation (EU) no. 1286/2014, in the case of breach of the provisions contemplated by article 5, paragraph 1, by articles 6 and 7, by article 8, paragraphs from 1 to 3, by article 9 and by article 10, paragraph 1, by article 13, paragraphs 1, 3 and 4, and by articles 14 and 19 of regulation (EU) no. 1286/2014, or in the case of failure to notify CONSOB of the document concerning the key information or of the reviewed versions of the same pursuant to article 4-decies and the relative implementation provisions, CONSOB may, taking into account, in as far as compatible, the criteria of article 194-bis[158]:

a) suspend the marketing of a PRIIP, for a period of no more than sixty days each time[159];

b) ban the offer;

c) ban the supply of a document containing the key information that does not comply with the requisites of articles 6, 7, 8 or 10 of regulation (EU) no. 1286/2014 and impose the publication of a new version of a document containing the key information.

1-bis. Without prejudice to the provisions of paragraph 1, in case of infringement of articles 13, paragraphs 1, 3 and 4, 14 and 19 of Regulation (EU) no. 1286/2014, CONSOB or IVASS, according to their respective duties defined pursuant to Article 4-sexies, may, taking into account, in as far as compatible, the criteria established by Article 194-bis, exercise the powers referred to in paragraph 1[160].

2. CONSOB and IVASS may require, according to their respective duties imposed pursuant to article 4-sexies, the PRIIP developers or the subjects who provide advice on the PRIIPs or who sell such products, to transmit a communication to the PRIIP retail investor concerned, giving information on the administrative measures adopted and communicating the procedures for the presentation of possible complaints or requests for reimbursement also by resorting to the out-of-court settlement mechanisms of controversies contemplated by Italian Legislative Decree no. 179 of 08 October 2007[161].

3. The provisions adopted by CONSOB pursuant to this article are published in compliance with the provisions on the publication of the sanction provisions contemplated by article 195-bis.

4. The provisions adopted by IVASS pursuant to this article are subject, as far as compatible, to the provisions of Title XVIII of Italian Legislative Decree no. 209 of 07 September 2005.

5.  …..omissis…..[162]

Article 4-octies
Internal systems for reporting breach of regulation (EU) no. 1286/2014

…omissis…[163]

Article 4-novies
Procedure for reporting to the Supervisory Authorities

…omissis…[164]

Article 4-decies
Obligation of prior serving of the document containing the key information on the PRIIPs

1. The PRIIP developer, or the person who sells PRIIPs, transmits to CONSOB the document containing the key information drawn up in conformity to what is established by regulation (EU) no. 1286/2014, before the PRIIPs in question are marketed in Italy.

2. The notification obligation pursuant to paragraph 1 also applies to the revised versions of the document containing the key information to be drawn up in compliance with article 10 of regulation (EU) no. 1286/2014[165].

Article 4-undecies [166]
Internal reporting of infringements (Whistle-blowing)

1. The parties referred to in parts II and III adopt specific procedures for whistle blowing, by the staff, of acts or facts that could constitute infringements of the governing regulations of the activities carried on, as well as Regulation (EU) no. 596/2014[167].

2. The procedures specified in paragraph 1 are able to guarantee:

a) the confidentiality of the personal data of the whistle blower and the person allegedly responsible for the infringement, without prejudice to the investigations or the procedures initiated by the judicial authorities in relation to the facts that are the subject of the reporting; the identity of the reporter is removed from the application of article 7, paragraph 2, of legislative decree no. 196 dated June 30th 2003, and cannot be revealed for all the phases of the procedure, without his or her consent or when the knowledge is essential for the defence of the accused;

b) the adequate protection of the subject against retaliation, discrimination or anyway unfair behaviour resulting from the reporting;

c) a specific, independent and autonomous channel for the reporting.

3. Other than cases of responsibility for bearing false witness or defamation, or for the same reason pursuant to article 2043 of the Civil Code, the presentation of reporting as part of the procedure referred to in paragraph 1 does not constitute an infringement of the obligations deriving from the work relationship.

4. The Bank of Italy and CONSOB adopt, in accordance with their respective competences, the implementing provisions of this article, having consideration for the need to for co-ordinating the supervisory functions and reducing the charges on the recipient parties to the minimum[168].

Article 4-duodecies [169]
Procedure for reporting to the Supervision Authorities

1. The Bank of Italy and CONSOB[170]:

a) receive, each for the matter they are competent for, form the personnel of the parties indicated in article 4-undecies, reportings that refer to infringements of the provisions of this decree, as well as of deeds of the European Union that can be directly applied in the same material;

b) bear in mind the criteria provided for by article 4-undecies, paragraph 2, letters a) and b), and can establish conditions, limits and procedures for the reception of the reports;

c) make use of the information contained in the reports, where relevant, exclusively in the exercise of the supervisory functions;

d) through a protocol of understanding they provide for the appropriate co-ordination measures for the carrying out of the activities relative to their respective competences, including the application of the relative sanctions, in such a way as to co-ordinate the exercise of supervisory functions and reduce the charges against the supervised parties to a minimum.

1- bis. Paragraph 1 shall apply to reports to CONSOB, whoever they are made by, of infringements of the Regulation (EU) no. 596/2014. The procedures are adopted by CONSOB in compliance with the provisions of  Enforcement Directive (EU) 2015/2392[171]

2. Documents relative to the reports referred to in paragraphs 1 and 1-bis are removed with the access planned by articles 22 of law no. 241 dated August 7 1990 and subsequent amendments [172].

Article 4-terdecies [173]
Exemptions

1. The provisions contained in part II do not apply:

a) to assurance companies nor to companies that provide the reinsurance and retrocession activities referred to in Legislative Decree no. 209 of 7 September 2005[174];

b) to parties that provide investment services exclusively to parent, subsidiary companies or companies subject to shared control;

c) to parties that provide investment services as an addition in the context of a professional activity governed by the legislative or regulatory provisions or by a code of professional ethics that admit the provision of these services, without prejudice to what is provided for in this decree for the intermediaries in the register required by article 106 of the consolidated banking law;

d) to parties that trade on their own account in financial instruments other than derivatives on commodities or by stakes of issue or relative derivative instruments and that do not provide other investment services or do not exercise other investment activities in financial instruments other than derivatives on commodities, by stakes of issue or relative derivatives, unless these parties:

1) are market makers

2) are members of or investors in a regulated market or multilateral trading facility or have direct electronic access to a trading venue, in accordance with what is provided for by delegated regulation (EU) 2017/565, with the exception of parties that are not traders that perform transactions in a trading venue of which it is objectively possible to measure the capacity of reducing the risks directly connected with the commercial activity or the financing activity of their own treasury or that of the group they belong to;

3) apply a high-frequency algorithmic trade technique, or

4) trade on their own account when carrying out orders of the clients.

The managers of UCI, Sicav, Sicaf and the relative depositories, the central counterparties and the exempted parties in line with the letters a), h), i) and l), are not required for the purpose of the exemption to satisfy the conditions enunciated in this letter.

e) to the operators subject to the obligations laid down in Directive 2003/87/EC that, when they concern emission stakes they do not carry out the clients’ orders and they do not provide investment services or activities other that trading on their own account, on the condition they do not apply high-frequency algorithmic trading techniques;

f) to the parties that provide investment services consisting exclusively of the management of worker participation systems;

g) to the parties that provide investment services consisting exclusively of managing working participation systems and providing investment services exclusively for their own parent company, their own subsidiaries or other subsidiaries of the parent company;

h) to the European Central Bank, the Bank of Italy, to other members of the SEBC and other national bodies that carry out similar functions in the European Union, to the Ministry of the Economy and Finance and to other public bodies that are charged or that take part in the management of the public debt in the European Union and international financial institutions created by two or more member states with the aim of mobilising resources and providing financial assistance to those, among their members, that are facing or are threatened by grave financial difficulties;

i) to pension funds, harmonised or otherwise by European Union law, as well as to their depositary parties;

l) to parties:

i) including market makers, that trade derivatives on commodities or emission stakes or derivatives from the same on their own account excluding those that trade on their own account while carrying out client orders; or

ii) that provide investment services other than trading on their own account, in derivatives on commodities or emission stakes or derivative instruments form the same to clients or providers of their principal activity;

providing:

1) for each of these cases, considered both singularly and in aggregate format, it concerns an additional activity to their main activity considered in the context of the group, providing this principal activity does not consist of the provision of investment services pursuant to this decree, banking activities pursuant to consolidated banking law or in market making activities in relation to derivatives on commodities;

2) these parties do not apply a high-frequency algorithmic trade technique; and

3) these parties formally notify CONSOB by December 31st each year, of whether they are using this exception and, at the request of CONSOB, on what basis they consider that their activity pursuant to points i) and ii) is additional to the principal activity.

The date the loss of the requirements specified for the exemption of this letter occurred must be communicated without delay to CONSOB by the interested parties that may continue to perform the trading of derivatives on commodities or issue allowances or of derivatives from the same providing within six months of the abovementioned date, they make an authorisation application as per the norms provided for in this decree[175];

m) to the parties that provide investment consultancy while performing another professional activity not contemplated by directive 2014/65/EU, providing this consultancy is not specifically remunerated;

n) to the foreign exchange agents whose activities and functions are governed by article 201 of this decree;

o) to the managers of the transmission system as defined in article 2, section 4, of directive 2009/72/EC or in article 2, section 4, of directive 2009/73/EC, when they perform their functions in compliance with the abovementioned directives or (EC) regulation no. 714/2009 or (EC) regulation no. 715/2009 or of the network codes or of the approaches adopted by a provision of said regulations, to the people that act in the capacity of providers of services on their behalf to fulfil their tasks pursuant to said legislative acts or the network codes or of the approaches adopted by a provision of said regulations, or to any manager or administrator of an energy, network or behaviour system balancing mechanism, for balancing energy supply and consumption when they perform said task. This exemption is applied to the people who carry out the activities mentioned in this letter only when they perform investment activities or provide investment services relative to the derivatives on commodities for the purpose of carrying out said activity. This exemption is not applied in relation to the management of a secondary market, including platforms for secondary financial transmission rights trading;

p) to the central depositaries authorised pursuant to the (EU) regulation no. 909/2014, except for what is specified in article 79-noviesdecies.1 of this decree.

PART II
REGULATION OF INTERMEDIARIES

TITLE I
GENERAL PROVISIONS AND POWERS OF SUPERVISION[176]

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 provisions[177].

2. For the pursuance of objectives indicated in paragraph 1, the Bank of Italy shall be responsible for risk containment, asset stability and the sound and prudent management of intermediaries[178].

3. For the pursuance of objectives indicated in paragraph 1, CONSOB shall be responsible for the transparency and correctness of conduct[179].

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 paragraphs 2 and 3[180].

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 paragraphs 2 and 3;

b) the exchange of information, also with reference to irregularities discovered and measures adopted in the exercise of supervisory activities[181].

5-ter. The protocol of understanding referred to in paragraph 5-bis was made public by the Bank of Italy and by CONSOB in the ways established by them[182].

Article 6
Regulatory powers [183]

01. In the exercise of its regulatory powers, 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 competition[184].

02. The Bank of Italy and CONSOB can maintain or impose obligations in the regulations that are additions to those provided for by article 16, sections 8, 9 and 10, of directive 2014/65/EU and by relative delegated acts, as well as by article 24 of the same directive, only in exceptional cases where said obligations are objectively justified and proportioned, having taken account of the need to deal with specific risks for the protection of investors or the well-being of the market that are particularly significant in the context of the structure of the Italian market[185].

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 paragraph 02 for the purposes of notifying the European Commission[186].

1. The Bank of Italy, after consulting CONSOB, shall issue a regulation on:

a) obligations of SIMs and SGRs in terms of capital adequacy, limitation of risk in its various forms and equity interests, and information to be provided to the public on the same matters and on corporate governance, administrative and accounting procedures, internal controls and remuneration and incentive systems[187];

b) the obligations of the investment companies, the companies of non-EU countries, the Sgrs, as well as the financial intermediaries in the register required by article 106 of the Consolidated banking law, Italian banks authorised to provide investment services or activities, regarding methods of deposit and sub-deposit of financial instruments and money belonging to the clients[188];

c) the rules applicable to Italian UCIs regarding:

1) the criteria and bans relative to the investment activity, also regarding group agreements;

2) the prudential provisions for risk containment and fractioning, in the case of UCIs other than reserved AIFs. The Bank of Italy may contemplate the application to Italian reserved AIFs of a financial lever ceiling and of prudential provisions to ensure the stability and integrity of the financial market;

3) the layout and drafting procedures of the accounting statements which asset management companies, SICAVs and SICAFs must periodically produce;

4) the methods for the calculation of the value of the UCI units or shares;

5) the criteria and procedures for evaluating the assets and valuables in which the capital is invested and the frequency of said evaluation. For the evaluation of assets not traded on regulated markets, the Bank of Italy may contemplate the use of the services of independent experts and may request their intervention also in the case of purchases and sales of the assets on the part of the manager;

6) the conditions for delegation to third parties of the evaluation of the assets in which the UCI capital is invested and the calculation of the value of the relative units and shares[189].

c-bis) the obligations of the parties qualified to provide investment services and activities and for the collective management of Assets, regarding:

1) corporate governance and general organisational requirements, including the implementation of article 4-undecies;

2) systems of remuneration and of providing incentives;

3) continuity of the activity;

4) administrative and accounting organisation, including the institution of the compliance with the regulations monitoring function;

5) business risk management;

6) internal audit;

7) liability of the senior management;

8) externalisation of essential or important operating functions or services or activities[190].

1-bis. The provisions pursuant to paragraph 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 authorities[191].

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, order implementation strategies and bundled selling practices[192];

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;

3-bis) the information obligations towards the investors of Italian AIFs, EU AIFs and non-EU AIFs[193];

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, including therein cases bundled selling practices[194];

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 received[195].

b-bis) provision of investment activities and services and collective Assets management, relative:

1) to procedures, of internal auditing, for the correct and transparent provision of investment activities and services, including those for:

a) The regulation of financial instruments and structured deposits;

b) the receipt or payment of incentives;

2) to procedures, of internal auditing, for the correct and transparent provision of collective Assets management, including those for the receipt or payment of incentives;

3) to the methods for performing the monitoring of compliance with the regulations function;

4) to the treatment of complaints;

5) to personal transactions;

6) to the management of conflicts of interest potentially damaging to the client including those deriving from the remuneration and incentive systems;

7) to the conservation of the registrations;

8) to the knowledge and skill of the natural persons that provide consultancy to the clients regarding stakes or information about financial instruments, investment services or additions on behalf of the qualified parties[196].

2-bis. With reference to the matters indicated paragraph 1, letter c-bis), numbers 1), 2), 3), 7) and 8), the Bank of Italy gains the agreement of CONSOB on significant aspects of regulation for the purposes referred to in article 5, paragraph 3. With reference to matters indicated in paragraph 2, letter b-bis), number 6), CONSOB gains the agreement of the Bank of Italy on significant aspects of regulation for the purposes referred to in article 5, paragraph 2. The aspects of regulation significant for the purposes of competence of the Bank of Italy and CONSOB are specified in the protocol specified in article 5, paragraph 5-bis. For the exercising of supervision pursuant to this part, the following are competent: the Bank of Italy for compliance with the provisions adopted pursuant to paragraph 1, letter c-bis), numbers 1), 2), 3), 7) and 8), and CONSOB for compliance with the provisions adopted pursuant to paragraph 2, letter b-bis), number 6); furthermore, the Bank of Italy and CONSOB, in relation to the aspects over which they have provided the agreement and for the purpose referred to in article 5, paras 2 and 3, can:

a) exercise the powers of information and survey supervision attributed to them by this chapter even adopting for the purpose the intervention provisions for which they are competent, in the ways indicated in the protocol;

b) communicate irregularities encountered to the other authority for the purpose for adopting the provisions of competence[197].

2-ter. …omissis… [198]

2-quater. By regulation and after consulting the Bank of Italy, CONSOB shall identify:

a) …omissis…[199];

b) the conditions in which authorised persons shall not be obliged to observe regulatory provisions pursuant to paragraph 2, paragraph b), subparagraph 1), when they provide services pursuant to Article 1, paragraph 5, paragraphs b) and e);

c) the specific discipline applicable to relations between authorised persons and professional customers;

d) the standards of behaviour that do not apply to the relations between the qualified parties that provide the services referred to in article 1, paragraph 5, letters a), b) and e), and qualified counterparties, meaning:

1) investment firms, EU Investment companies, banks, insurance companies, UCIs, managers, pension funds, financial intermediaries in the register specified in article 106 of the Consolidated banking law, companies referred to in article 18 of the consolidated banking law, electronic money institutions, banking foundations, national governments and their corresponding offices, including the public bodies tasked with managing the public debt, the central banks and supranational organisations of a public nature;

2) the other categories of private parties found with regulation by CONSOB, having consulted the Bank of Italy, in respect of the criteria referred to in the directive 2014/65/EU and the relative measures of implementation;

3) the categories corresponding to those of numbers 1) and 2) of parties from countries not belonging to the European Union[200] / [201] .

2-quinquies. CONSOB, having consulted Bank of Italy, specifies with regulation:

a) professional private customers[202];

b) the criteria for identifying the private parties that on request can be treated as professional clients and the relative application procedure[203].

2-sexies. the Ministry of the Economy and Finance, having consulted with the Bank of Italy and CONSOB, identifies with regulation:

a) the public professional customers [204];

b) the criteria for identifying the public parties that on request can be treated as professional clients and the relative application procedure [205].

2-septies. The provisions on remuneration and incentive systems issued pursuant to paragraph 1 letter c-is number 2), may provide that certain decisions regarding remuneration and incentives are referred to the competence of the shareholders' meeting, even in the dualistic administration and control model, establishing quorums in derogation of laws[206].

2-octies. Any agreement or provision not in conformity with the provisions on remuneration and incentive systems issued pursuant 1, letter c-bis), number 2), or contained in directly applicable acts of the European Union, is void. The invalidity of the clause does not lead to the nullity of the contract. Where possible, the provisions contained in the voided clauses are replaced by law with the parameters indicated in the above provisions in the values closest to the original agreement[207].

2-novies. The shareholders and directors of qualified subjects, without prejudice to the obligations under Article 2391, first paragraph, of the Italian Civil Code, shall refrain from deliberations in which they have a conflicting interest, on their own behalf or that of third parties[208].

Article 6-bis
Informative and investigatory powers

1. The Bank of Italy may ask the qualified parties, as far as it is competent to do so, to provide it with data and news and for documents and deeds to be sent in the way and under the terms that it establishes. The Bank of Italy, may ask for information from the personnel of qualified parties , as far as it is competent to do so, including through said qualified parties.

2. The obligations provided for in paragraph 1 are also applied to those to which the qualified parties have externalised essential or important functions as well as their personnel.

3. The powers provided for under paragraph 1 can be exercised with regard to the party tasked with auditing the books.

4. CONSOB, in the contest of its competences, can:

a) ask anyone to send it data and information and send it documents and deeds in the ways and under the terms that it specifies, that may be pertinent to the purposes of the exercise of its powers of supervision;

b) hold a personal hearing with anyone who may be in possession of pertinent information.

5. CONSOB, within the context of its competences, may also, with regard to the qualified parties:

a) proceed with searches in the ways specified in article 33 of the decree of the President of the Republic no. 600 dated September 29 1973, and by 52 of the decree of the President of the Republic no. 633 dated October 26th 1972;

b) ask for records, existing regarding telephone conversations, electronic communications or exchange of data kept by a qualified party;

c) ask for records kept by a telecommunications operator concerning the telephone communications and exchanges of data of a qualified party;

d) take advantage of the help from public authorities by asking of the communication of data and information also in derogation the prohibitions referred to in article 25, paragraph 1, of the legislative decree no. 196 dated June 30, 2003, and access the IT system of the tax registry in the ways provided for in articles 2 and 3, paragraph 1, of the legislative decree no. 212 dated 12th July 1991;

e) request the communication of personal data also in derogation of the prohibitions referred to in article 25, paragraph 1, of the legislative decree no. 196 dated 30 June 2003;

f) take advantage, where necessary, of data contained in the registry of accounts and of the deposits referred to in article 20, paragraph 4, of the law no. 413 dated December 30th 1991, as well as acquire, even through direct access, the data contained in the file indicated in article 13 of decree-law no. 625 dated 15 December 1979,, converted, with modifications, by law no. 15 dated February 6th 1980;

g) access directly, through appropriate electronic connection, to the data contained in the Bank of Italy Risks central database;

h) take advantage, where necessary, even through electronic connection , of the data contained in the appropriate section of the tax registry referred to in article 7, sixth paragraph, of the decree of the President of the Republic no. 605 dated September 29th 1973,;

f) proceed with seizure of assets that might form the subject of confiscation pursuant to article 187–sexies of this decree. Paras 9, 10 and 11 of article 187-octies of this decree are applied.

6. This is without prejudice to the application of the provisions of articles 199, 200, 201, 202 and 203 of the code of criminal procedure, where compatible.

7. The powers referred to in paragraph 5, letters a), c) and o), are exercised after the authorisation of the public prosecutor of the Republic.

8. In the cases provided for by paragraph 4, letter b), paragraph 5, letters a) and i), and paragraph 9 a report is drawn up of the data and the information acquired or of the facts ascertained,

the seizures made, and the declarations made by those involved, who are asked to sign the report and have the right to have a copy thereof.

9. In the exercising of the powers provided for by paras 4 and 5 CONSOB may make use of the Guardia della Finanza (Finance Police)that carries out the investigations requested acting with the powers of investigation given to it for the purpose of the assessment of the value added tax and on income tax.

10. All the information, and the data acquired by the Guardia della Finanza in performing the tasks provided for by l paragraph 9 are covered by professional secrecy and are communicated exclusively to CONSOB without delay.

11. The Bank of Italy, within the scope of its competence, may exercise the power provided for in paragraph 4, letter b), in with regard to officers and personnel of the qualified parties. In this case paragraph 8 is applied[209].

Article 6-ter
Powers of inspection

1. The Bank of Italy and CONSOB may, within the context of their respective competences and in compliance with European regulations, carry out inspections and request the production of the documents and the fulfilment of the deeds considered necessary with regard to the qualified parties and those to whom the qualified parties have externalised essential or important corporate functions and to their personnel. Paras 9 and 10 of article 6-bis are applied.

2. For the purpose of checking compliance of a qualified party with the provisions referred to in this part, CONSOB, after authorisation from the public prosecutor of the Republic, may exercise the power referred to in paragraph 1 even with regard to parties, other than those indicated to therein, that have had relations of a capital or professional nature with the qualified party.

3. CONSOB may request the parties tasked with the legal auditing of the accounts of the qualified parties to provide information. When there are particular needs and it is not possible to do so with its own resources, CONSOB may also authorise legal auditors or auditing firms to make checks or inspections on its behalf. The party authorised to proceed with the aforementioned checks and inspections acts in the capacity of a public official.

4. In the cases provided for by l paragraph 2 CONSOB draws up a report of the data and of the information acquired or the facts ascertained and the declarations made by those involved, who are asked to sign the report and have the right to a copy thereof.

5. Each authority communicates the inspections ordered to the other authorities, which may ask for investigations with their own specifications.

6. Bank of Italy and CONSOB may ask the competent authorities of an EU state to conduct investigations at branches of investment firms, of Sgrs and of banks established on the soil of said state or agree other methods for the checks.

7. The competent authorities of one EU State after informing the Bank of Italy and CONSOB, may inspect, even through their representatives, the branches of EU investment companies, EU banks, EU management companies and EU AIFM authorised by the same, established on the soil of the Republic. If the authorities of a State in the European Union so requests, the Bank of Italy and CONSOB, within the context of their respective competences, proceed directly with the investigation or agree other ways for the checks to be made.

8. The Bank of Italy and CONSOB may agree methods for the inspection of investment company branches, Italian banks and companies of non-EU established within the respective territories, within the context of their respective competences, with the competent authorities of the non-EU States[210].

Article 7
Powers of intervention over the qualified parties [211]

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, auditors and staff[212];

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);

1-bis. The Bank of Italy and CONSOB, within their respective competences, may also convene the directors, auditors and staff of those to whom the qualified subjects have outsourced essential or important business functions[213].

1-ter. The Bank of Italy and CONSOB, within the context of their respective competences, may publish warnings to the public[214].

1-quater. CONSOB tells the qualified parties not to make use of, in performing their activities and for a period of no longer than three years, of professional activities of a party where it might be damaging for the transparency and correctness of behaviour[215].

2. For stability purposes, the Bank of Italy can issue special provisions concerning the matters governed by Article 6, paragraph 1, letter a) and, where the situation so requires: adopt, after consulting CONSOB, restrictive or limiting measures concerning services, activities, operations and territorial structure; prohibit the distribution of profits or other elements of capital; with reference to financial instruments that can be calculated in capital for supervisory purposes and prohibit the payment of interest; set limits on the total amount of the variable part of remuneration in qualified subjects, when it is necessary for the maintenance of a sound capital base. The measures may be issued in respect of one or more qualified subjects, as well as one or more categories of them[216].

2-bis. The Bank of Italy, within the context of its competences, may order having consulted CONSOB, the removal of one or more corporate representatives of SIMs, asset management companies, SICAVs and SICAFs, if their tenure is of detriment to the sound and prudent management of the qualified subject; removal is not ordered when there are justified grounds for declaring disqualification pursuant to Article 13, unless there is an urgent need to take action[217].

2-ter. CONSOB, within the context of its competences, orders, after consulting the Bank of Italy, the removal of one or more corporate officers of investment firms, Italian banks, Assets management companies, Sicavs and Sicafs, if their being in office is harmful to the transparency and correctness of the behaviour of the qualified parties; the removal is not ordered where there are the conditions to pronounce disqualification pursuant to article 13, unless there is an urgency to take steps[218].

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.

3-bis. CONSOB orders the suspension for a period of no more than sixty days each time of the marketing or sale of financial instruments in the case of infringement of the implementation provisions of the article 6, paragraph 2, letter b-bis), number 1), letter a), and of the existence of harm to the protection of the investors[219].

Article 7-bis
Powers of intervention referred to in Title VII, Chapter I, of (EU) regulation no. 600/2014

1. The Bank of Italy and the CONSOB are the national authorities competent for the purposes of the application of the provisions referred to in Title VII, Chapter I, of (EU) regulation no. 600/2014. They exercise the powers and adopt the supervisory measures provided for by article 39, section 3, by article 42 and by article 43, section 3, of (EU) regulation no. 600/2014, also in conformance with what is established by the delegated acts issued pursuant to article 42, section 7, of the aforementioned regulation.

2. For the purposes referred to in paragraph 1, CONSOB is competent as far as the protection of the investors, the orderly functioning and soundness of the financial markets or of the commodity markets are concerned, as well as for the purposes referred to in article 42, section 2, letter a), point ii), of (EU) regulation no. 600/2014.

3. For the purposes referred to in paragraph 1, the Bank of Italy is competent as far as the stability of the whole or part of the financial system is concerned.

4. For the purpose of co-ordinating the exercise of the functions referred to in paragraph 1, the Bank of Italy and CONSOB established, based in part on the relevant protocol of understanding, the method of cooperation and the reciprocal exchange of information relevant for the purposes of the exercise of the aforementioned functions and the exercise by CONSOB of the point of contact functions pursuant to article 4 of this decree.

5. Without prejudice to the powers provided for by article 39, section 3, article 42 and article 43, section 3, of (EU) regulation no. 600/2014, the Bank of Italy and CONSOB, within the context of their respective competences, may also order the suspension for a period of not more than 60 days each time financial instruments or structured deposits are marketed or sold if the conditions referred to in articles 40, 41 or 42 of (EU) regulation no. 600/2014 are met.

6. Each authority exercise the powers and adopts the supervisory measures in conformance with the paras 1 and 5 of this article having consulted with the other authority[220].

Article 7-ter
Injunctive powers against national and non-EU intermediaries

1. In the case of infringement by Investment firms, companies of non-EU countries and of Assets management companies, Sicav, Sicaf, non-EU AIFM authorised in Italy and banks authorised for the provision of investment services and activities with offices in Italy of obligations deriving from provisions of Italian law and European Union law applicable to them on the subject of this decree, the Bank of Italy or CONSOB, within the context of their respective competences, may order the same, even by way of precaution, to temporarily or permanently cease said irregularities.

2. The supervisory authority that proceed, having consulted the other authority, prohibits the parties indicated in paragraph 1 to undertake new transactions, as well as imposing all other limitations concerning single types of transactions, single services or activities, even limited to individual branches or branch offices of intermediaries, when:

a) the infringements committed may harm the interests involved in the objectives of a general nature listed in article 5, paragraph 1;

b) in cases of urgency for the protection of the interests of the investors[221].

Article 7-quater
Powers of injunction over EU intermediaries

1. In the case of infringement by EU investment firms with a branch in Italy, EU management company, EU and non-EU AIFM authorised in a state of the EU other than Italy, EU banks with branch in Italy and financial companies provided for by article 18, paragraph 2, of the consolidated banking law, obligations deriving from provisions of Italian and European Law applicable to them on the subject of this decree, the Bank of Italy or CONSOB, within the context of their respective competences, may order the same to bring said irregularities to an end, giving communication thereof also to the supervisory authority of the member state in which the intermediary has its registered office for any provisions necessary.

2. The supervisory authority that is proceeding adopts the necessary provisions, having consulted the other authority, including the imposition of the prohibition against undertaking new transactions, as well as every other limitation concerning single types of transaction, single services or activities, even limited to individual branches or branch offices of intermediaries, single types of transactions, single services or activities even limited to individual branches or branch offices of the intermediary, or order the closure of the branch, when:

a) there are no provisions of the competent authority in the state where the intermediary has its registered office or they are inadequate;

b) they are infringements of the rules of conduct;

c) the irregularities committed may harm the interests inherent in the objectives of a general nature listed in article 5, paragraph 1;

d) in cases of urgency for the protection of the interests of the investors.

3. The provisions provided for by l paragraph 2 are communicated by the authority that has adopted them to the competent authority of the EU state in which the intermediary has its registered office.

4. If there is a grounded suspicion that an EU investment company or EU bank, operating under the free provision of services system in Italy, is not fulfilling the obligations deriving from the provisions of the European Union, the Bank of Italy or CONSOB informs the competent authority of the member state in which intermediary has its registered office for the necessary provisions. If, despite the measures adopted by the competent authority, the intermediary persists in such a way as to prejudice the interests of the investors or the good functioning of the market, the Bank of Italy or CONSOB, after informing the competent authority of the member state in which the intermediary has its registered office, adopts all the measures necessary including the imposition of the prohibition against undertaking new transactions in Italy. The Bank of Italy or CONSOB proceeds having consulted the other authority, and inform the European Commission of the measures adopted.

5. Paragraph 4 is also applied in the case of infringements, by EU investment companies or EU banks, with a branch in Italy, or EU management companies, EU and non-EU AIFMs authorised in a State of the EU other than Italy, of obligations deriving from provisions of the European Union for which the member state in which the intermediary has its registered office is competent.

6. If the infringement concerns provisions relative to the liquidity of the EU investment company or in any other case in which the liquidity situation of the same is deteriorating, the Bank of Italy may adopt the measures necessary for the financial stability or for the protection of the rights of the parties to which the services are provided, if those taken by the competent authority of the state of origin are lacking or inadequate; the measures to adopt are communicated to the competent authority of the state of origin[222].

Article 7-quinquies
Powers of injunction over EU OICVM, EU and non EU FIA with holdings or shares offered in Italy

1. When there are elements that allow the non-compliance by EU UCIS, EU and non EU AIF of obligations deriving from provisions of Italian and European Union law applicable to them regarding this decree to be assumed, the Bank of Italy or CONSOB, within the context of their respective competences, may suspend by way of a precaution, for a period not exceeding sixty days, the offer of the relative stakes or actions. In the case of the ascertained infringement, supervisory authorities, within the context of their respective competences, may temporarily suspend or prohibit the offer of the stakes or the shares of the UCI.

2. If there is a grounded suspicion that an EU UCI , an EU and non EU AIF whose stakes or shares are sold in Italy, or the manager of said UCI, is non compliant with the obligations deriving from provisions of the European Union for which the state of origin of the UCI is competent, the Bank of Italy or CONSOB shall inform the competent authority of said state so that it adopts the provisions necessary. If, despite the measures adopted by the competent authority, the UCI, or its manager, persists in acting in such a way as to prejudice the interests of the investors or the proper functioning of the markets, the Bank of Italy or CONSOB, after informing the authorities of the state of origin, adopts the measures necessary to protect the investors or ensure the proper functioning of the markets, including the prohibition against the offer of stakes or shares ]of the UCI[223].

Article 7-sexies
Suspension of the administrative bodies

1. The Chairman of CONSOB orders, as an urgent measure, where there are situations of danger for the clients of for the markets, the suspension of the administrative bodies of the investment firms and the appointment of a commissioner who takes over the management when there are serious irregularities in the administration or serious infringements of the legislative, administrative or statutory provisions. The order given by the Chairman of CONSOB is submitted to the approval of the Committee.

2. The commissioner remains in office for a maximum period of sixty days. The commissioner, in the exercise of its functions, is a public official. The Chairman of CONSOB may establish special precautions and limitations for the management of investment firms.

3. The indemnity to which the commissioner is entitled is determined by CONSOB on the basis of criteria it has established and is met by the company in special administration. Article 91, paragraph 1, last sentence, of the consolidated banking law is applied.

4. Civil actions against the commissioner, for acts performer while performing the duty are initiated after CONSOB’s authorisation.

5. This article also applies to Italian branches of Companies of non-EU countries other than banks. The commissioner assumes with regard to the branches the powers of the company’s administrative body.

6. This article also applies to Assets management companies and Sicavs. The Chairman of CONSOB orders the Provision, having consulted the governor of the Bank of Italy[224].

Article 7-septies
Precautionary powers that can be applied to autonomous financial consultants, financial advisory firms and financial consultants authorised to offer outside their offices

1. The supervisory body and keeper of the single register of financial advisors, in the case of necessity and urgency , orders, by way of a precaution, the suspension of the autonomous financial consultant, of the financial advisory firms and of the financial consultant qualified for door to door selling from exercising the activity for a maximum period of one hundred and eighty days, if there are elements that make it possible to presume the existence of serious infringements of law or of general or particular provisions issued under this decree.

2. The body referred to in paragraph 1 orders by way of precaution, for a maximum period of one year, suspension from exercising the activity when the subject in the register is subject to one of the personal precautionary measures in book IV, Title I, Chapter II, of the code of criminal procedure or assumes the capacity of accused pursuant to article 60 of the said code in relation to the following crimes:

a) crimes provided for in Title XI of book V of the civil code and in bankruptcy law;

b) crimes against the public administration, against public trust, against capital, against public order, against the public economy, or crimes of a tax nature;

c) offences specified in Title VIII of the consolidated banking law;

d) offences provided for by this decree[225].

Article 7-octies
Powers to counteract abuse

1. CONSOB may, with regard to anyone who offers or carries out investment services or activities through the Internet without being qualified therefor pursuant to this decree:

a) make public, even by way of a precaution, the circumstance that the party is not authorised to carry out the activity indicated by article 1, paragraph 5;

b) order that the infringement cease[226].

Article 7-novies
Capital reserve

1. The Bank of Italy adopts the measures regarding reserves of capital provided for by Chapter IV of Title VII of the directive 2013/36/EU, as well as those of a macroprudential nature provided for by (EU) regulation no. 575/2013, as the designated authority pursuant to said European regulation with regard to investment firms and the branches of companies of non-EU countries other than banks[227].

Article 7-decies
Supervision of compliance with EU provisions that can be directly applied

1. The Bank of Italy and CONSOB supervise, each according to its competence, pursuant to this part, the respect of the provisions dictated by (EU) regulation no. 600/2014, as well as by delegated acts and technical rules of regulation and implementation of the mentioned regulation and of the directive 2014/65/EU[228]

Article 8
Information requirements [229]

1. …omissis…[230]

1-bis. The UCITS which invest in credits participate in the Bank of Italy's Central Risks Bureau, as established by the Bank of Italy. The Bank of Italy may contemplate participation in the Central Risks Bureau through the banks and intermediaries registered on the list referred to under Article 106[231].

1-ter. …omissis…[232]

2. …omissis…[233]

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, of SICAVs or SICAFs. To this end the Articles of Association of Italian investment companies, asset management companies, the SICAVs or the SICAFs, independently of the system of management and control adopted, shall assign the related tasks and powers to the control body.[234].

4. The independent statutory auditors of Italian investment companies, asset management companies, of the SICAVs or of the SICAFs 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 disclaimer[235].

5. Paragraph 3, first sentence, and paragraph 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 , the SICAVs or the SICAFs pursuant to Article 23 of the Consolidated Law on Banking[236].

5-bis. …omissis…[237]

6. Paras 3, 4, 5 are applied to the banks just for the provision of investment activities and services[238].

Article 8-bis
Internal systems for reporting infringements (whistle blowing)

…omissis…[239]

 Article 8-ter
Reporting of infringements to the Bank of Italy and to CONSOB

…omissis…[240]

1. The Bank of Italy and CONSOB receive, each for the matters within their competence, from the staff of qualified subjects and their related parent company, reports that refer to violations relating to the rules in Part II, Title I, II and III of this Legislative Decree, as well as European Union acts directly applicable to the same matters.

2. The Bank of Italy and CONSOB shall take into account the criteria of Article 8-bis, paragraph 2, letters a) and b), and may lay down conditions, limits and procedures for receiving the reports.

3. The Bank of Italy and CONSOB shall make use of the information contained in the reports, when relevant, only in the exercise of supervisory functions and for the achievement of the purposes set out in Article 5.

4. In the case of access pursuant to Articles 22 and following of Law no. 241 of 7 August 1990, the document is shown in a manner that will safeguard the confidentiality of the informant. The provisions of Article 8-bis, paragraphs 3 and 4 shall apply.

Article 9 [241]
Legal audit

1. For Italian investment companies, asset management companies, to the SICAVs and to the SICAFs, article 159 paragraph 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 fund[242].

Article 10
Inspection supervision

…omissis…[243]

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) [244];

a-bis) indicates the provisions of Chapter II of this Title applicable to companies which control an investment company or an asset management company, as indicated by letter b);

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) and letter b-bis), 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 company[245];

1-bis. The group identified pursuant to paragraph 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 CONSOB[246].

Article 12
Supervision of groups

1. The Bank of Italy gives the company at the head of the group chosen pursuant to article 11, paragraph 1, letter b), provisions referring to all the parties identified pursuant to the same article, with the subject the contents of article 6, paragraph 1, letter a), and letter c-bis), numbers 1), 2), 3), 4) and 6), and paragraph 1-bis. Where stability needs are required, the Bank of Italy may issue special provisions in the same content[247].

1-bis. In line with EU regulations, the Bank of Italy shall identify options for exemption from the application of provisions adopted pursuant to paragraph 1[248].

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 supervision[249].

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)[250].

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, paragraph 1, paragraph b)[251].

4. ...omissis...[252]

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);

b-bis) carry out inspections at subjects to whom essential or important business functions have been outsourced by the subjects listed in letters a) and b), limited to the purposes referred to therein[253].

5-bis. In the exercise of supervisory activities on a consolidated basis, the Bank of Italy may issue provisions, pursuant to article 7, paragraph 2 with regard to persons pursuant to Article 11, paragraph 1, letter b)[254].

5-ter. The Bank of Italy may, if their tenure in office is of detriment to the sound and prudent management of the group, order the removal of one or more corporate representatives of the parent company; removal is not ordered when there are justified grounds for declaring disqualification pursuant to Article 13, unless there is an urgent need to take action[255].

5-quater. The Bank of Italy and CONSOB, within their respective competences, may even request information from the staff of the qualified subjects listed in paragraph 3, including by means of the latter[256].

5-quinquies. The obligations imposed by paragraphs 2 and 3 shall also apply to those to whom the qualified subjects have outsourced and essential or important business functions and to their staff[257].

5-sexies. Parent companies are subject to Articles 6, paragraph 2-septies and 2-octies, and 7, paragraphs 1 and 1-bis[258].

Chapter II
Corporate officers and shareholders

Article 13
Company representatives

1. Persons who perform administrative, managerial or control functions at SIMs, asset management companies, SICAVs and SICAFs must be suitable for the appointment.

2. For the purposes of paragraph 1, representatives shall have the requirements of professionalism, integrity and independence, meet criteria of competence and fairness and devote the time necessary for the effective performance of their duties.

3. The Ministry of Economy and Finance, with a regulation adopted after consultation with the Bank of Italy and CONSOB, identifies:

a) consistent integrity requirements for all representatives;

b) requirements of professionalism and independence, graduated according to principles of proportionality;

c) responsibility criteria, consistent with the office to be filled and the characteristics of the qualified subject, and adequate composition of the body;

d) the criteria of fairness for representatives of SIMs, with regard, among other things, to the business relations of the representative, their conduct in relation to the supervisory authorities and sanctions or corrective measures issued by them and restrictive measures related to the professional activities carried, as well as any other element that may affect the fairness of the representative;

e) the limits on the number of offices for representatives of SIMs, graduated according to principles of proportionality and taking into account the size of the intermediary;

f) the grounds for the temporary suspension from office and its duration.

4. The regulation referred to in paragraph 3 may define cases in which the requirements and criteria of suitability also apply to the heads of the main company functions in the subjects of greater importance referred to in paragraph 1.

5. The administration and control bodies of the subjects referred to in paragraph 1 shall assess the suitability of their members and the overall adequacy of the body, documenting the process of analysing and properly justifying the outcome of the assessment. In the event of specific and limited deficiencies related to the criteria established pursuant to paragraph 3, letter c), the same bodies may take measures necessary to address them. In all other cases, the lack of suitability or a violation of the limits to the number of offices shall result in disqualification from the office; this is pronounced by the body of membership within thirty days of the appointment or knowledge of the supervening defect or violation. For persons who are not members of a body, the assessment and pronouncement of disqualification are made by the body that appointed them.

6. The Bank of Italy and CONSOB, within their respective competences, in the manner and time established by joint regulation, also in order to minimize the costs incurred by the qualified subjects: assess the suitability of the representatives and compliance with the limits to the number of offices, including on the basis of the analyses carried out and any measures taken pursuant to paragraph 5; in the event of a defect or violation, they pronounce the disqualification from office[259].

Article 14
Shareholders

1. The shareholders referred to in Article 15 shall have the requirements of integrity and meet criteria of competence and fairness so as to ensure the sound and prudent management of the investee company.

2. The Ministry of Economy and Finance, with a regulation adopted after consultation with the Bank of Italy and CONSOB, identifies:

a) the requirements of integrity;

b) the criteria of competence, graduated in relation to the influence on the management of the company that the shareholder can exercise;

c) the criteria of fairness, with regard, among other things, to the business relations of the shareholder, their conduct in relation to the supervisory authorities and sanctions or corrective measures issued by them and restrictive measures related to the professional activities carried, as well as any other element that may affect the fairness of the shareholder.

3. For the purposes of the application of this Article and Article 15, for SICAVs and SICAFs, reference is made only to nominative shares and the provisions referred to in paragraph 2 lay down the cases in which, for the purpose of conferring the right to vote, such shares are regarded as bearer shares, with regard to the date of purchase.

4. For the purposes of paragraphs 1 and 2, shares held through subsidiaries, trust companies or third parties are also considered, as well as cases in which the rights arising from shares belong or are assigned to a person other than the owner of the holdings themselves or agreements exist concerning the exercise of voting rights.

5. Notwithstanding the provisions of Article 16, if the requirements and criteria set out in paragraphs 1 and 2 are not met, the voting rights and other rights that allow influencing the company, inherent in holdings exceeding the thresholds specified by Article 15, paragraph 1, may not be exercised.

6. In case of non-compliance with the prohibition, the resolution or other measure adopted by the vote or, in any case, the contribution of the shareholdings referred to in paragraph 1, may be challenged under the provisions of the Italian Civil Code. The shares for which the right to vote cannot be exercise are counted for the purposes of the regular constitution of the related shareholders' meeting.

7. The challenge may also be initiated by the Bank of Italy or CONSOB within one hundred and eighty days of the date of the resolution or, if this is subject to registration in the companies register, within one hundred eighty days of registration or, if it is subject only to filing at the companies register office, within one hundred and eighty days of the date of this.

8. Shareholdings exceeding the thresholds provided for in Article 15, paragraph 1, of persons without the requirements of integrity must be sold within the deadline set by the Bank of Italy or CONSOB[260].

Article 15
Acquisition and sale of shareholdings [261]

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 SICAFs, 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 company[262].

2. Within the term established pursuant to paragraph 5, letter, c), the Bank of Italy may prohibit the acquisition of the shareholding if it deems that conditions are not met to ensure a sound and prudent management of the intermediary, considering the quality of the potential buyer and the financial soundness of the proposed acquisition based on the following criteria: the reputation of the potential buyer in accordance with Article 14; the suitability, under Article 13, of those who, following the acquisition, will carry out administrative, management and control functions; the financial soundness of the potential buyer; the capacity of the intermediary to comply with provisions governing its activities following the acquisition; the suitability of the structure of the group of the potential buyer to allow effective supervision; the absence of reasonable suspicion that the acquisition is related to money laundering or terrorist financing. The Bank of Italy may establish a time limit for the acquisition as well as communicate, even before the expiration of the term, that it approves of the transaction[263].

3. Acquisitions and disposals referred to in paragraph 1 shall be notified upon completion to the Bank of Italy, CONSOB and the company[264].

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 paragraph 1, including cases in which voting rights are not calculated for the purpose of that paragraph, 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 paragraph 2[265].

Article 16
Suspension of voting rights, obligation to dispose of shareholdings[266]

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.[267]

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 in a SICAV or in a SICAF 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.[268]

3. In the event of non-compliance with the prohibitions referred to in the preceding paragraphs, 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.[269]

Article 17 [270]
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, to the SICAVs and to the SICAFs, 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[271];

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 in the SICAVs and in the SICAFs 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[272].

TITLE II
INVESTMENT SERVICES[273]

Chapter I
Persons and authorisation

Article 18
Persons

1. The professional provision of investment services and activities for the public is reserved for investment firms, EU investment companies, Italian banks, EU banks and companies of non-EU countries[274].

2. Asset management companies may professionally practice towards the public the services contemplated by article 1, paragraph 5, letters d) and f). Asset management companies may also professionally practise towards the public the service contemplated by article 1, paragraph 5, letter e), if authorised to provide the AIF management service. EU management companies may professionally practise towards the public the services contemplated by article 1, paragraph 5, letters d) and f), if authorised in the Home Member State[275].

3. Financial intermediaries entered in the register referred to in Article 106 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.[276]

3-bis. …omissis… [277]

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,[278] 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 operations[279] / [280];

b) shall adopt the rules implementing and integrating the reservations of activities provided for in this article, in compliance with the provisions of European law[281] / [282].

Article 18-bis
Independent financial advisors

1. The reservation of activities referred to in article 18 does not prejudice the possibility for natural persons, in possession of the requirements of professionalism, integrity, independence and capital established with the regulation adopted by the Ministry of the Economy and Finance, having consulted CONSOB, and entered in a special section of the register referred to in article 31, paragraph 4, to perform investment consultancy, relative to securities and stakes of collective investment bodies, without holding funds or securities belonging to clients. The requirements of professionalism for entry to the register are ascertained requirements of professionalism based on rigorous evaluation criteria that take into account previous professional experience that is validly documented or based on proficiency tests.

 2. The provisions established by CONSOB with the regulation referred to in article 31, paragraph 6 are applied to independent financial advisors[283]

Article 18-ter [284]
Financial advisory firm

1. The reservation of activities referred to in article 18 does not prejudice the possibility for company constituted in form of joint stock companies or companies with limited liability, in possession of the capital and independence requirements established with regulations adopted by the Ministry of the Economy and Finance, having consulted CONSOB, and entered in a special section register referred to in article 31, paragraph 4, of providing security-related investment consultancy and stakes of mutual investment bodies, without holding funds or securities belonging to clients[285].

2. The Minister of the Economy and Finance, having consulted CONSOB, establishes with the regulations the requirements of professionalism, integrity and independence that the corporate officers must possess[286].

3. …omissis…[287]

3-bis. The provisions established by CONSOB with the regulation referred to in article 31, paragraph 6 are applied to the financial advisory firms[288].

3-ter. Financial advisory firms are jointly liable for the damage caused to third parties by independent financial advisors that they use in the exercise of the activities, even if said damage follows liability ascertained criminal procedures[289].

Article 19
Authorisation

1. CONSOB, having consulted the Bank of Italy, authorises, within six months of the presentation of the complete application, the provision of investment services and activities by investment firms, when, in conformance with what is specified in the pertinent technical regulating and implementing norms issued by the European Commission pursuant to directive 2014/65/EU, the following conditions recur:

a) the joint stock company form is adopted;

b) the name of the company includes the words “stockbroking company ”;

c) the registered office and the general administration department are situated on Italian soil;

d) The paid up capital is at least that determined generally by the Bank of Italy[290];

e) all the information, including a programme of activities, that indicates in particular the type of transactions provided for and the organisational structure are provided;

f) the parties that perform administrative, management and control functions are suitable pursuant article 13;

g) the owners of the stakes indicated in article 15, paragraph 1, have the requirements and satisfy the criteria established pursuant to article 14 and the conditions for prohibition contemplated by article 15, paragraph 2 do not recur;

h) the structure of the group the company is part of is not such as to prejudice the effective exercise of supervision over the said company and at least the information required pursuant to article 15, paragraph 5 is provided;

i) for the management of multilateral trading facilities or of organised trading facilities the further requirements dictated in part III are complied with[291].

2. Authorisation shall be refused where verification of the conditions indicated in paragraph 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.[292].

3. CONSOB governs the authorisation of investment firm procedure[293].

3-bis. Investment companies shall inform CONSOB and the Bank of Italy of any significant change, after authorisation, to the conditions pursuant to paragraph 1[294].

3-ter. Consob, having consulted the Bank of Italy, disciplines the possibility of the authorisation of investment firms becoming null and void. CONSOB, having consulted the Bank of Italy, pronounces the nullification of the authorisation when investment firms have not begun to carry out the investment services and activities with the term of one year of the issue of the authorisation or forgoes them expressly[295].

4. The Bank of Italy, having consulted CONSOB, authorises the provision of investment services and activities by Italian banks and of Italian branches of banks of non-EU countries, as well as the provision of the services and activities indicated in article 18, paragraph 3, by financial intermediaries in the register specified in article 106 of the consolidated banking law[296].

4-bis. The Bank of Italy, having consulted CONSOB, pronounces the nullification of the authorisation if the bank has not begun to carry out the investment services and activities with the term of one year of the issue of the authorisation or forgoes them expressly[297].

4-ter. Paras 3-ter and 4-bis are also applied to Companies of non-EU countries authorised pursuant to articles 28 and 29-ter[298].

Article 20
Register

1. Without prejudice to the provisions of Title VIII of (EU) regulation no. 600/2014, CONSOB enters the investment firms and the companies of non-EU countries other than banks in a special register. EU Investment companies are included on a special list annexed to the register[299].

2. CONSOB shall communicate entries in the register to the Bank of Italy.

3. The persons referred to in paragraph 1 shall indicate the details of the entry in the register or list in their documents and correspondence.

Article 20-bis
Revocation of the authorisation

1. The provisions of this article are applied in cases where there are not the presuppositions for the application of articles 57, paragraph 1, and 60-bis.4, of this decree, as well as articles 17 and 20 of the legislative decree no. 180 dated November 16th 2015,, and article 80 of the consolidated banking law.

2. CONSOB, having consulted the Bank of Italy, revokes the authorisation for the provision investment services and activities of investment firms when:

a) the provision of the investment services and activities is broken by more than six months;

b) authorisation has been obtained by presenting false declarations or using any other illegitimate method;

c) the conditions to which the authorisation is subject no longer exist.

3. The revocation of the authorisation pursuant to paragraph 2 is the reason for the winding up of the company when it concerns all the investment services and activities which the investment company is authorised to provide. Within sixty days of the communication of the provision of revocation, the investment firms communicates to the Bank of Italy and to CONSOB the company’s winding up programme. CONSOB, having consulted the Bank of Italy, may also authorise at the same time as the revocation, the provisional provision of activities pursuant to article 2487 of the civil code. The liquidation body sends periodic reports on the progress of the liquidation to the Bank of Italy and, for the period of any provisional provision of activities, to CONSOB. The Bank of Italy supervises the proper execution of the liquidation procedure. With regard to the company in liquidation, the powers of the Ministry of the economy and finance, the Bank of Italy and CONSOB provided for in this decree remain unaltered.

4. The revocation of the authorisation to provide investment services and activities of banks, in the cases provided for by l paragraph 2, is ordered by the Bank of Italy, having consulted CONSOB.

5. This article also applies to companies of non-EU countries authorised pursuant to the articles 28 and 29-ter[300].

Chapter II
Performance of services[301]

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 activities[302];

1-bis. In the provision of investment activities and services and additional services, investment firms, the Companies of non-EU countries authorised in Italy, Sgrs, the non EU AIFMs authorised in Italy, financial intermediaries in the register specified in article 106 of the consolidated banking law and the Italian banks:

a) adopt all measures that can identify and prevent or manage conflicts of interest that could arise among said parties, including the senior management, employees and associated agents or the people directly or indirectly connected and their clients or between clients when any investment service or additional service or a combination of said services is provided;

b) maintain and apply effective organisational and administrative provisions for the purpose of adopting all the reasonable measures for preventing the conflicts of interest from negatively influencing the interest of their clients;

c) when the organisational and administrative provisions adopted as required by letter b) are not sufficient for ensuring, with reasonable certainty, that the risk of harming the interests of the clients is avoided, they clearly inform the clients, before acting on their behalf, of the general nature and/or the sources of the conflicts of interest as well as of the measures adopted to mitigate associated risks;

d) conduct independent, health and prudent management and adopt measures suitable for safeguarding the rights of the clients regarding entrusted assets[303].

1-ter. The provisions referred to in letters a), b) and c) of paragraph 1-bis are also applied to conflicts of interests determined by the receipt by investment firms, companies of non-EU countries authorised in Italy, Sgrs, non-EU AIFMs authorised in Italy, financial intermediaries in the register required under article 106 of the consolidated banking law and Italian banks of incentives paid by third parties or determined by the remuneration policies and incentive structures adopted by them[304].

2. In the performance of the investment services and activities it is possible act in one’s own name and on behalf of customers after the written consent of the latter[305].

2-bis. When the create financial instruments for sale to clients, the parties qualified for the provision of investment activities and services ensure that said products are designed to meet the requirements of a particular reference of end clients specified within the relative category of clients and that the strategy of distribution of financial instruments is compatible with the target client. The parties referred to in this paragraph also adopt reasonable measures to ensure that the financial instrument is distributed to the clients in the market target[306].

2-ter. The qualified party must know the financial instruments offered or recommended, assess their compatibility with the needs of the clients to whom it is providing investment services bearing in mind the reference market of end clients referred to in paragraph 2-bis, and act in such a way that the financial instruments are only offered or recommended when that is in the interests of client[307].

Article 22
 Separation of assets

1. In the provision of the investment services and additions, the financial instruments and the sums of money belonging to individual clients, held for any reason by investment firms, EU investment companies, companies of non-EU countries other than banks, Sgrs, EU management companies, EU AIFMs or financial intermediaries in the register required by article 106 of the consolidated banking law, as well as the financial instruments of the individual clients held by the bank for any reason, constitute capital that is separate for all intents and purposes from that of the intermediary and that of other clients. Actions in respect of such assets may not be brought by creditors of the intermediary or on behalf of such creditors, or 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.[308]

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 written consent is given by the client, investment firms, EU investment companies, companies of non-EU countries other than the bank, Sgrs, EU management companies, EU AIFMs or financial intermediaries in the register required by article 106 of the consolidated banking law and the bank may not use for their own interests or those of others, the financial instruments belonging to clients held by them for any reason. investment firms, EU investment companies, companies of non-EU countries other than the bank, Sgrs, EU management companies, EU AIFMs or financial intermediaries in the register required by article 106 of the consolidated banking law and the bank, the Sgrs, EU management companies and EU AIFMs may not use the cash and equivalents available belonging the investors that they hold for any reason for its own interests or those of other parties[309].

Article 23
Contracts

1. The contracts relative to the provision of the investment services, and, if relevant, the contracts relative to the provision of additional services, are drawn up in writing, in conformance with what is contemplated by the delegated acts of directive 2014/65/EU, and an example is given to the customers. CONSOB, having consulted the Bank of Italy, may require with a regulation that, for grounded reasons or in relation to the professional nature of the contracting parties, particular types of contract can or must be stipulated in other forms, ensuring with regard to retail clients an appropriate level of guarantee. In cases of non-compliance with the prescribed form, the contract is null[310].

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 paragraphs 1 and 2, nullity may be enforced only by the customer.

4. The provisions of the Title VI, of the consolidated banking law do not apply:

a) to the investment services and activities;

b) to the placement of financial products;

c) to transactions and to services that are components of financial products subject to the discipline of articles 25-bis and 25-ter or part IV, Title II, Chapter I. In any case, credit transactions as well as the services and payment accounts disciplined by chapters I-bis, II, II-bis and II-ter of the consolidated banking law are applied the relevant provisions of the Title VI of the consolidated banking law[311].

4-bis. In the provision of investment activities and services and accessory services financial guarantee contracts are not concluded with transfer of ownership with retail clients for the purpose of ensuring or hedging clients ‘present or future, effective or potential obligations. Contracts concluded in infringement of this disposition are null. CONSOB disciplines the way the activities referred to in this paragraph are carried out in the case of professional clients and qualified counterparties[312].

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)[313].

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
Portfolio management [314]

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 service provider 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 the service provider 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 CONSOB[315].

1-bis. In the provision of the portfolio management service fees, commissions or other cash or non-cash benefits paid or supplied by third parties or provided by third parties or anyone acting on behalf of third parties, with the exception of low-value non-monetary benefits that may enhance the quality of the service provided to the client and that, due to their size and nature, cannot be considered such as to prejudice compliance with the duty to act in the best interests of the clients. Said non-cash low-value benefits must be clearly communicated to the clients[316].

2. Agreements in conflict with the provisions of this article shall be null and void, nullity may be enforced only by the customer.

Article 24-bis
Investment advice

1. In the case of providing investment advice, the client is also informed, in good time before the provision of the service, of the following:

a) whether the advice is provided on an independent basis or not;

b) whether the advice is based on a deep or more restrictive analysis of the various types of financial instrument, and in particular whether the range is limited to the financial instruments issued or provided by entities that have together with the provider of service strict ties or other close legal or economic relationship, such as a contractual relationship that is so close as to entail the risk of compromising the independence of the advice provided;

c) whether the periodic assessment of the adequacy of the recommended financial instruments is given to the clients.

2. The following rules are applied in the provision of the investment advice service on an independent basis:

a) an assessment is made of an appropriate range of financial instruments available on the market that are sufficiently diversified in terms of type and issuer or product provider in such a way as to guarantee that the investment objectives of the customer are suitably satisfied and are not limited to the financial instruments issued or supplied:

i) by the service provider or by an entity that have strict links with it or

ii) by other entities that have strict links or legal or economic relations with the service provider, such a contractual relationship that is so close as to entail the risk of compromising the independence of the consultancy provided;

b) Fees, commissions or other cash or non-cash benefits paid or supplied by third parties or provided by third parties or anyone acting on behalf of third parties, with the exception of low-value non-monetary benefits that may enhance the quality of the service provided to the client and that, due to their size and nature, cannot be considered such as to prejudice compliance with the duty to act in the best interests of the clients. Said non-cash low-value benefits must be clearly communicated to the clients [317].

Article 25
 Trading activities in regulated markets, in the multilateral trading facilities and in organised trading facilities

1. Investment firms and Italian banks authorised to provide trading services and activities on their own account or through the filling of orders on behalf of customers may operate in the trading venues of Italy or of another member state of the European Union and in the markets outside the EU recognised by CONSOB pursuant to article 70[318].

Article 25-bis
Structured deposits and financial products, other than financial instruments, issued by banks

1. Articles 21, 23 and 24-bis are applied to the offer and t the consultancy regarding structured deposits and financial products, other than financial instruments, issued by banks. This is without prejudice to what is established pursuant to article 3 of legislative decree no. 30 dated February 15th 2016.

2. In relation to the products referred to in paragraph 1 and in the continuation of the purpose referred to in article 5, paragraph 3, CONSOB exercises over qualified parties and over banks not authorised to provide investment services or activities, without prejudice to the powers of the competent authorities of the member states of origin, the powers referred to in article 6, paragraph 2, with the exception, limited to the structured deposits, letter b), number 2), and paras 2-bis and 2-quater; in article 6-bis, paras 4, 5, 6, 7, 8, 9 and 10; in article 6-ter, paras 1, 2, 3 and 4; in article 7, except for the paras 2, 2-bis and 3; in article 7-bis, without prejudice to the powers of the Bank of Italy provided for by the same article[319].

Article 25-ter [320]
Insurance investment products[321]

1. The distribution of insurance investment products is governed by the provisions of Title IX of Legislative Decree no. 209 of 7 September 2005 and directly applicable European legislation[322].

2. In relation to the products referred to in paragraph 1 and in the continuation of the objective referred to in article 5, paragraph 3, CONSOB exercises over the parties qualified to distribute insurance products as per article 1, paragraph 1, letter w-bis), the powers referred to in article 6, paragraph 2, after consulting IVASS, as well as the powers referred to in article 6-bis, paras 4, 5, 6, 7, 8, 9 and 10; article 6-ter, paras 1, 2, 3 and 4; article 7, paras 1, 1-bis, 1-ter and 3-bis[323].

2-bis. With reference to insurance investment products, CONSOB exercises the power referred to in art. 6, para. 2, after consulting IVASS, in such a way to ensure uniformity of the rules applicable to the sale of insurance investment products, regardless of their distribution channel, as well as the overall efficiency and coherence of the supervision system for insurance investment products and the respect of directly applicable European legislation[324].

2-ter. CONSOB and IVASS agree on the ways to exercise their supervisory powers, according to their respective duties, so as to reduce the burden for supervised entities[325].

3. …omissis…[326]

4. …omissis…[327]

5. …omissis…[328]

6. …omissis…[329]

Chapter III
 Cross-border operations

Article 26
Branches and free provision of services by investment firms

1. Investment firms, after communication to CONSOB and in conformance with what is provided for by paragraph 4, may provide investment services and activities, with or without additional services, in other states of the European Union, in the exercising of the right of establishment through branches or associate agents established on the soil of the hosting member country.

2. CONSOB, having consulted the Bank of Italy, proceeds, in conformance with what is provided for by paragraph 4, with communicating to the competent authority in the host member state, the information subject of the communication referred to in paragraph 1, unless there are reasons to doubt that the organisational structure or financial, economic or asset situation of the investment firm involved is sufficient.

3. Investment firms, after notifying CONSOB and in conformance with what is provided for in paragraph 4, may provide investment services and activities, with or without additional services, in other states of the European Union under the free provision of services system, also through the use of associated agents established in Italy. CONSOB, having consulted the Bank of Italy, communicates to the competent authority of the hosting member state the use of associate agents in conformance with the provisions of paragraph 4.

4. The necessary conditions and the procedures that must be complied with so that the investment firms can provide in other states of the EU services admitted to the mutual recognition through the right of establishment or through the free provision of services are disciplined by CONSOB, in conformance with relative technical regulation and implementation regulations issued by the European Commission pursuant to directive 2014/65/EU.

5. Investment firms may provide the activity not admitted to mutual recognition in other states of the EU after authorisation of CONSOB, having consulted the Bank of Italy.

6. Investment firms, may operate in another non- EU State, even without having set up branches there after the authorisation of CONSOB after consulting the Bank of Italy.

7. In any case the existence of relevant collaboration agreements with the competent authorities in the host state constitute conditions for the issue of authorisations referred to the paras 5 and 6.

8. CONSOB, having consulted the Bank of Italy, establishes through the regulation:

a) the procedures provided for in the case where it does not proceed with the communication referred to in paragraph 2, if unless there are reasons to doubt that the organisational structure or financial, economic or asset situation of the investment firm involved is sufficient;

b) the conditions and the procedure for the issue of the Authorisation to investment firms to provide the activities not admitted to mutual recognition in other EU states and its services in non EU states[330].

Article 27
Investment companies of the European Union

1. The Investment companies of the EU may provide investment services and activities, with or without accessory additional services, in exercising the right of establishment through branches or associated agents on Italian soil. The first settlement is preceded by a communication to CONSOB by the competent authority of the state of origin, in conformance with what is provided for in the relative technical regulation and implementation regulations issued by the European Commission pursuant to directive 2014/65/EU. The branch or the associated agent begin the activity from the moment when they receive the relevant communication from CONSOB or, in the case of silence, after two months have elapsed from the communication to CONSOB from the authorities in the member state of origin.

2. The Investment companies of the EU may provide investment services and activities, with or without additional services, in the Italy under the free provision of services system, also by using associated agents established in the member of state of origin, who may not hold money and/or financial instruments of the clients or potential clients of the party for whom they work, on condition that CONSOB has been informed by the competent authority of the state of origin, in conformance with what is contemplated by the relative technical regulation and implementation regulations indicated in paragraph 1.

3. CONSOB, having consulted the Bank of Italy, disciplines with regulation the procedures relative to any requests of amendment by CONSOB of the provisions concerning the branches to be established in Italy[331].

4. CONSOB, having consulted the Bank of Italy, disciplines with regulation authorisation to practice the activities not admitted to the mutual recognition any way affected by the investment companies of the EU in Italy[332].

Article 28
Companies of non-EU countries other than banks

1. The establishment in Italy of branches by companies of non-EU countries other than banks is authorised by CONSOB, having consulted the Bank of Italy. Authorisation is subject:

a) to the existence, for the branch, of requirements corresponding to those provided for by article 19, paragraph 1, letters d) and f);

b) to the sending of all the information, including a programme of activities, that illustrate in particular the types of transactions planned for and the organisational structures of the branch, specified pursuant to paragraph 4;

c) to the authorisation, supervision and effective implementation in the state of origin of the investment services or activities and additional services that the applicant company intends to provide in Italy, as well as to the circumstance that the competent authority of the State of origin pays due attention to the recommendations of GAFI in the context of measures against money laundering the fight against the financing of terrorism;

d) to the existence of collaboration agreements among the Bank of Italy, CONSOB and the competent authorities in the State of origin, including provisions disciplining the exchange of information, for the purpose of preserving the soundness of the market and guaranteeing the protection of the investors[333];

e) to the existence of an agreement between Italy and the State of origin that fully respects the regulations referred to in article 26 of the OECD Model Tax Convention on Income and on Capital and ensures a proper exchange of tax-related information, including any multilateral tax agreements[334];

f) to the applicant company’s adhesion to a recognised indemnity system to protect investors pursuant to article 60, paragraph 2.

2. The Authorisation referred to in paragraph 1 is denied if the capacity of the branch of the non-EU country company other than a bank to respect the obligations applicable to it pursuant to this decree or contained in directly applicable deeds of the European Union is not guaranteed.

3. The Companies of non-EU countries other than banks may provide investment services and activities, with or without additional services, to retail clients or to professional clients on request as specified pursuant to article 6, paragraph 2-quinquies, letter b), and paragraph 2-sexies, letter b), of this decree exclusively through the establishment of branches in Italy, in conformance with paragraph 1.

4. CONSOB, having consulted the Bank of Italy, may govern the conditions for the issue of the authorisation for the performance of the services and of the activities referred to in paras 1 and 6.

5. Title VIII of (EU) regulation no. 600/2014 applies to the provision in Italia of investment services and activities, with or without additional services, in accordance to the free provision of services system, for qualified counterparties or professional clients as specified pursuant to article 6, paragraph 2-quinquies, letter a), and paragraph 2-sexies, letter a), of this decree, by companies of non-EU countries other than banks.

6. The Companies of non-EU countries other than banks may provide investment services and activities, with or without additional services, to qualified counterparties or professional clients as specified pursuant to article 6, paragraph 2-quinquies, letter a), and paragraph 2-sexies, letter a), of this decree, even without the establishment of branches in Italy, in the absence of a decision by the European Commission pursuant to article 47, section 1, of (EU) regulation no. 600/2014 or where said decision is no longer in force, providing the conditions contemplated by paragraph 1, letters b), c), d) and e) obtain, and a program concerning the activities that it is intended to perform in the country is produced. The authorisation is issued by CONSOB, having consulted the Bank of Italy.

7. CONSOB, having consulted the Bank of Italy, may indicate, in general terms, the services and the activities that, pursuant to paragraph 6, companies of non-EU countries other than banks may not provide in Italy without the establishment of Branches[335].

Article 29
Italian banks

1. Italian banks may provide investment services or activities, with or without additional services, in other states of the European Union, in exercising the right of establishment, through branches or associate agents established in the host member country. The establishment of branches is governed by article 15 of the consolidated banking law. The Bank of Italy may prohibit, having consulted CONSOB, the use of associate agents for reasons regarding the adequacy of the organisational structure or the financial, economic or capital situation of the bank. The Bank of Italy, having consulted CONSOB, communicates the use of associate agents to the competent authority of the host member country in conformance with what is contemplated by the provisions of paragraph 4.

2. The Italian banks may provide investment services and activities, with or without additional services, in other countries of the European Union, under the free provision of services system, even through the use of associate agents established in Italy pursuant to the provisions referred to in paragraph 4.

3. Articles 15 and 16 of the consolidated banking law apply to the provision of investment services and activities, with or without additional services, by Italian banks in non EU countries.

4. The Bank of Italy governs the methods and procedure for the provision of investment services pursuant to paras 1, 2 and 3, in conformance with the provisions contemplated by the Single Supervision Mechanism instituted pursuant to (EU) regulation no. 1024/2013[336].

Article 29-bis
Banks of the European Union

1. The banks of the European Union may provide investment services or activities, with or without additional services, in the exercise of the right of establishment through branches or associate agents established in Italy. The establishment of branches is governed by article 15 of the consolidated banking law. The provision of investment services through associate agents is preceded by a communication to CONSOB, in conformance with the technical regulation and implementation regulations indicated in article 27, paragraph 1.

2. The banks of the European Union may provide investment services and activities, with or without additional services, in Italy under the free provision of services system pursuant to article 16, paragraph 3, of the consolidated banking law, also taking advantage of associate agents established in the member state of origin, who may not hold the money and/or financial instruments of the clients or potential clients of the party for whom he or she work. preceded by a communication to CONSOB, in conformance with the technical regulation and implementation regulations indicated in article 27, paragraph 1[337].

Article 29-ter
Banks of non-EU countries

1. In the case where the performance of investment services or activities, with or without additional services is envisaged, the establishment of branches by banks by banks of non-EU countries in Italy is authorised by the Bank of Italy, having consulted CONSOB, when the conditions referred to in article 28, paragraph 1 obtain. This is without prejudice to the application of the articles 13, 14, paragraph 4, and 15, paragraph 4, of the consolidated banking law.

2. The Authorisation referred to in paragraph 1 is denied if the capacity of the branch of the bank of the non-EU country to respect the obligations applicable to it pursuant to this decree or contained in directly applicable deeds of the European Union is not guaranteed.

3. The banks of non-EU countries may provide investment services and activities, with or without additional services, to retail clients or professional clients on request as identified pursuant to article 6, paragraph 2-quinquies, letter b), and paragraph 2-sexies, letter b), exclusively through establishment of branches in Italy.

4. The Bank of Italy, having consulted CONSOB, may govern the conditions for the issue of the authorisation for the performance of the services and the activities referred to in paras 1 and 6.

5. The provisions of the Title VIII of (EU) regulation no. 600/2014 apply to the provision of investment services and activities, with or without additional services in Italy, under the free provision of services system for qualified clients or professional clients as specified pursuant to article 6, paragraph 2-quinquies, letter a), and paragraph 2-sexies, letter a) of this decree, by banks of non-EU countries.

6. The banks of non-EU countries may provide investment services and activities, with or without additional services, to qualified counterparties or professional clients as specified pursuant to article 6, paragraph 2-quinquies, letter a), and paragraph 2-sexies, letter a), of this decree even without the establishment of branches in Italy in the absence of a decision by the European Commission pursuant to article 47, section 1, of (EU) regulation no. 600/2014, or where this decision is no longer in force, providing the conditions obtain contemplated by article 28, paragraph 1, letters b), c), d) and e), and a programme of the activities that it is intended to carry out in Italy is presented. The authorisation is issued by the Bank of Italy, having consulted CONSOB.

7. The Bank of Italy, having consulted CONSOB, may indicate, generally, the services and the activities that the banks of non-EU countries, pursuant to para6, may not provide without the establishment of branches[338].

Chapter IV
Governing of door-to-door selling and supervision of its financial advisors
[339]

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 offerer 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 service[340].

2. The following are not considered door-to-door selling:

a) an offer to professional customers, as identified by article 6, paragraphs 2-quinquies and 2-sexies;

b) an offer of an issuer's own financial instruments addressed to the members of the board of directors or of the supervisory board, to employees, and to collaborators who are not employees of the issuer, of the holding company or of its subsidiaries, made in the respective offices or branches[341].

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 paragraph 5, paragraphs c) and c-bis) [342];

b) by asset management companies, EU management companies, SICAVs, SICAFs, EU and non-EU AIFMs, exclusively for UCI units or shares[343].

4. Investment firms, the EU investment companies, the companies of non-EU countries, banks, financial intermediaries in the register required by article 106 of the Consolidated banking law, Sgrs, EU management companies, EU and non EU AIFMs may carry out door to door selling of its investment services and activities. Where the offer has as its object services and activities performed by other intermediaries, the investment firms, EU investment companies, the Companies of non-EU countries and the banks must be authorised for the performance of services provided for by article 1, paragraph 5, letters c) or c-bis) [344].

5. Investment firms, EU Investment companies, companies of non-EU countries other than banks 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.[345]

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 financial advisors authorised to make off-premises offers. This possibility shall be mentioned in the forms given to the investor. Without prejudice to the application of the discipline of the first and second sentence to the investment services referred to in article 1, section 5, letters c), c-bis) and d), for contracts undersigned as from 1 September 2013, the same discipline also applies to the investment services referred to in article 1, section 5, letter a). The same rules shall apply to contract proposals effected outside the registered office or using distance marketing techniques pursuant to Article 32[346].

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. Paragraph 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 structured deposits, to financial products different from financial instruments issued by banks[347].

Article 30-bis
Method of providing the investment consultancy service by independent financial advisors and the financial advisory firms

1. The independent financial advisors, in the register referred to in article 31, paragraph 4, may promote and also provide

The investment consultancy service in places other than the elected address for service. Financial advisory firms, on the register referred to in article 31, paragraph 4, may also promote and provide the investment consultancy service in places other than the registered office, through independent financial advisors.

2. The efficacy of the consultancy contract concluded in a place other than the address for service or the registered office is suspended for a period of seven days from the day the retail client signs it. Within this time he client may communicated his or her withdrawal without costs or payment to the financial consultant or financial advisory firms; this power is indicated on the forms given to the retail client.

3. Non indication of the power of withdrawal on the forms means the relative contracts are null and void, that may only be enforced by the retail customer[348].

Article 31
Financial advisors qualified for door-to-door selling and supervisory body and keeping of the single register of financial advisors[349]

1. For door to door selling the qualified parties use financial advisors qualified for door-to-door selling. The financial advisors qualified for door-to-door selling established in Italy who the EU Investment companies use and the EU banks have equivalent status, for the purposes of the application of the rules of conduct as a branch constituted in Italy[350].

2. The activity of door to door selling promotes and places the investment services and/or the additional services with clients or potential clients, receives and transmits the instructions or the orders of the clients concerning investment services or financial products, promotes and places financial products, provides investment consultancy to clients or potential clients regarding said products or financial. The financial consultant qualified for door to door selling may promote and place contracts relative to the granting of loans or the provision of payment services on behalf of the qualified party in the interests of whom he or she is making door to door sales[351].

2-bis. The financial advisors qualified for door-to-door selling may not hold money and/or financial instruments of clients or potential clients of the party for whom they are Woking[352].

3. The authorised person conferring the appointment shall be jointly and severally liable for losses caused to third parties by financial advisors authorised to make off-premises offers, including cases where such losses are the consequence of a criminal offence resulting in conviction.[353]

3-bis. The parties qualified for door-to-door selling shall immediately tell any client or potential client in which capacity they are operating and which qualified party they represent. Qualified parties adopt all the necessary controls over the activities performed by the financial advisors qualified for door-to-door selling in such a way that the said qualified parties continue to comply with the provisions of this decree and the relative implementation regulations. The qualified parties that use financial advisors qualified for door-to-door selling shall verify that the same have the sufficient knowledge and skill to able to provide the investment services or the additional services and to accurately communicate all the information concerning the services proposed to the client or potential client. The qualified parties that appoint financial advisors qualified for door-to-door selling adopt measures adequate for avoiding any negative impact caused by their activities that do not fall within the field of application of directive 2014/65/EU of the European Parliament and the Council regarding the activities exercised by the same on the behalf of the qualified party[354].

4. The single register of financial advisors is constituted with three distinct sections: the financial advisors qualified for door-to-door selling, independent financial advisors and financial advisory firms. The supervisory body sees to keeping the overall register and of the individual register of financial advisors which consists of the professional association representative of the financial advisors qualified for door-to-door selling, independent financial advisors, financial advisory firms and of the qualified parties. A representative of CONSOB may be present at the meetings of the body. The body is a legal personality and is set up in the form of an association with organisational and statutory autonomy, in respect of the principle of organisation by territory of its facilities and activities. The body exercises the precautionary powers referred to in article 7–septies and the sanctioning powers referred to in article 196. The provisions of the body are published on its Internet site. The bylaws and the internal regulations of the Body, and their later amendments, are sent to the Ministry of the Economy and Finance per approval, after consulting CONSOB. The Ministry of the Economy and Finance appoints the chairman of body’s board of statutory auditors. Within the context of own financial autonomy the body determines and collects the contributions and the other sums due from the members, those applying for registration and those who intend to undergo the evaluation test referred to in paragraph 5, in to the extent necessary to guarantee the performance of their activities. The provision by which the body orders the payment of the contributions due has the effect of an enforcement order. After the term fixed for the payment has elapsed without result, the Body proceeds with the exaction of the due amounts on the basis of the regulation laid down for collection, through the role, of the state revenues, of the territorial agencies, of the public and social welfare agencies. It sees to entry onto the register after checking the necessary requirements, cancellation from the register in the cases established by CONSOB through the regulation referred to in paragraph 6, and it carries out every other activity necessary for keeping the register. The Body operates in compliance with the principles and criteria established through CONSOB regulations, and under the supervision of the said firms. The responsibility system, provided for the exercise of the monitoring functions by CONSOB pursuant to article 24, paragraph 6-bis, of the law 28 December 2005, no. 262 is applied to the Body, in the exercise of the supervision of the parties on the register[355].

5. The Minister of the Economy and Finance[356] shall establish the integrity and experience requirements for entry of the financial advisor qualified for door to door selling in the register referred to in paragraph 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.[357]

6. CONSOB shall lay down in a regulation the principles and rules concerning:

a) the setting up of the register provided for in paragraph 4 and the related forms of publicity;

b) the representative requirements for the professional associations of authorised to make off-premises offers of independent financial advisors, financial advisory firms and qualified intermediaries;

c) entry in the register provided for in paragraph 4 and the grounds for suspension, striking off and readmission;

d) the grounds for incompatibility;

d-bis) the supervision exercised over the Body;

e) the precautionary measures and sanctions governed respectively by Articles 7-septies 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 paragraph 4 regarding matters referred to in paragraph c);

g) the rules of presentation and conduct which financial advisors authorised to make off-premises offers, independent financial advisors and the financial advisory firms must comply with in their dealings with customers;

h) the arrangements for retaining the documentation regarding the activity performed by financial advisors authorised to make off-premises offer independent financial advisors and financial advisory firms;

i) the activities of the Body referred to in paragraph 4;

l) the method of professional development of the financial advisors qualified for door-to-door selling, of the independent financial advisors and of the parties that they perform, on behalf of the company referred to in article 18-ter, activities of Investment consultancy with regard to the clients[358].

6-bis. Per the financial advisory firms referred to in article 18-ter, CONSOB adopts the implementing provisions of the article 4-undecies[359].

7. The Body may ask the financial advisors qualified for door-to-door selling or to the parties that making use of said firms, to the independent financial advisors and financial advisory firms to communicate data and information and transmit deeds and documents fixing the relative terms. It may also make inspections and require the exhibition of documents and performance of the acts considered necessary as well as conduct personal hearings. During inspections, the Body may make use of, after communication to CONSOB, by the Guardia di Finanza that acts under the powers invested in it for investigations into Value Added and Income Taxes, using structures and personnel in place in such a way as not to lead to further costs. The content and the means of collaboration between the Body and the Guardia di Finanza are defined in the relevant protocols of understanding[360].

Article 31-bis
CONSOB supervision over the Body

1. CONSOB supervises the Body in the way that it established, in line with criteria of proportionality and inexpensiveness of the checks and with the purpose of verifying the adequacy of the internal procedures adopted by the Body for carrying out the tasks it has been entrusted with.

2. For the purposes indicated in paragraph 1, CONSOB may access the IT system that manages the register, ask the Body for periodic communication of the data and information and the transmission of acts and documents in the ways and under the terms it has established, carry out inspections, ask for the exhibition of documents and the completion of the actions considered necessary, as well as convene the members of the Body.

3. The Body promptly informs CONSOB of the deeds and the events of greatest significance relative to the exercise of its functions and by January 31 of each year transmits a detailed report on the activities carried out in the preceding year and the programme of activities for the year underway.

4. CONSOB and the Body collaborate with each other in part through the exchange of information, for the purpose of streamlining the performance of the respective functions.

5. All the news, information and data in possession of the Body due to its supervision activities are covered by professional secrecy. Exceptions are the cases provided for by law for the investigations relative to infringements with criminal sanctions. the Body may not raise the objection of professional secrecy with the Bank of Italy, IVASS, Covip and The Minister of the Economy and Finance.

6. The Ministry of Economy and Finance at the proposal of CONSOB, may decree the dissolution of the bodies of management and control of the body referred to in article 31 if there are serious irregularities in the administration, or serious infringements of the legislative, administrative or statutory provisions governing their activities. The Ministry of the Economy and Finance sees to the provisions required for the reconstitution of the bodies for the management and checking of the body, ensuring them operational continuity, if necessary also through the appointment of a Commissar. CONSOB may order the removal of one or more members of the management and checking bodies in the case of serious non-compliances with the duties to be assigned to them by law, bylaws or specific provisions and other instructions imparted by CONSOB, or in the case of proven inadequacy, ascertained by CONSOB, in the exercise of the functions that they have been set up for[361].

Article 32
Distance marketing of investment services and activities and financial instrument[362]

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 offerer or a person appointed by the offered.

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 19th August 2005, on the distance marketing of investment services and activities and financial products. [363]

Chapter IV-bis [364]
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 dispute resolution

1. The parties for whom CONSOB carries out its supervisory activities, to be identified through the regulation referred to in paragraph 2, must adhere to out-of-court dispute resolution systems with investors other than professional clients referred to in article 6, paras 2-quinquies and 2-sexies, of this decree. In the case of non-adhesion, the sanctions referred to in article 190, paragraph 1 are applied, and to natural persons referred to in article 18-bis the Sanctions referred to in article 187-quinquiesdecies, paragraph 1-bis, of this decree are applied.

2. CONSOB determines, through its regulation, in respect of the principles, the procedures and the requirements referred to in part V, Title II-bis, of legislative decree no. 206 of September 6th 2005, and successive modifications, the criteria by which the dispute resolution procedures referred to in paragraph 1 are carried out as well as the criteria for the composition of the decision-making body, in such a way that its impartiality and the representation of the interested parties are guaranteed[365].

3. Steps are taken to cover the relative functioning expenses without new or greater cost to the public purse, with the resources referred to in article 40, paragraph 3, of law no. 724 of 23 December 23rd 1994, and subsequent modifications, as well as that with the amounts charged to the user of the said procedure[366].

Article 32-ter.1
Fund for the out of court protection of the savers and investors

1. For the purposes of streamlining access by the savers and investors to the widest protection within the context of their procedures for the out-of-court resolution of the disputes referred to in article 32-ter, CONSOB sets up the fund in its accounts for the out-of-court protection of the savers and the investors, hereinafter called the “Fund”. The Fund is intended to guarantee the savers and investors other than the professional clients referred to in article 6, paras 2-quinquies and 2-sexies, of this decree, in the limits of the capacity of the said Fund, access to the out-of-court resolution procedure for the disputes referred to in article 32-ter of this decree, through the exoneration from the payment of the relevant amount for the administrative costs for initiating the procedure, as well as, for any residual parts, to permit the adoption of further measures in favour of the savers and of the investors, by CONSOB, also in with regard to financial education.

2. The Fund is financed with the deposit of half the amount of the pecuniary administrative sanctions collected for the infringement of the regulations governing the activities referred in part II of this decree, as well as, in the limit of Euro 250,000 annually starting from 2016, with the resources entered in the relevant chapter of the estimate of the Ministry of the Economy and Finance in relation to the deposits made on the State budget revenue for the payment of the tax on the government concessions referred to in the decree of the President of the Republic no. 641 of October 26 1972, for entry in the register referred to in article 31, paragraph 4, of this decree. the use of funds channelled into the fund, with regard to those relative to the infringement of the regulations that discipline the activities referred to in part II of this decree, is conditioned on the investigation, with final judgement or with an arbitration award that can no longer be challenged of the sanctioned infringement. In the case of the fund’s insufficiency the provisions of paragraph 3 of article 32-ter of this decree continue to apply. CONSOB adopts the necessary measures so that the amounts of the pecuniary administrative sanctions referred to in first sentence are channelled in due measure directly into CONSOBs accounts at the same time as the payment by the obliged party, to be destined for the Fund[367].

TITLE III
COLLECTIVE ASSETS MANAGEMENT

Chapter I[368]
Authorised subjects and contemplated businesses

Article 32-quater
Reserve assets

1. The professional practice of collective asset management is reserved to the asset management companies, the SICAVs, the SICAFs, the EU management companies which manage Italian UCITS, the EU and non-EU AIFMs which manage an Italian AIF, according to the provisions of this title.

2. The provisions of this title do not apply:

a) to the supranational institutions, such as the European Central Bank, the European Investment Bank, the European Investment Fund, the European Development Financial Institutions and bilateral development banks, the World Bank, the International Monetary Fund, and the other supranational institutions and similar international organisations, when such institutions or organisations manage AIFs for purposes of public interest;

b) to the national central banks;

c) to the States, the local public bodies and the other bodies which manage funds for the financing of social security and pension systems;

d) to holding companies, understood as companies which hold interests in one or more companies, with the purpose of executing entrepreneurial strategies to contribute to the increase of value in the long term, through the exercise of control, considerable influence and the rights deriving from their holdings and which:

1) operate on their own behalf and whose shares are traded on a regulated European Union market; or

2) are not established with the main purpose of generating profit for their own investors by the disposal of their holdings in the companies they control or over which they have considerable influence or in which they hold interests, as proven by their financial statements and other company documents;

e) to employee participation systems or employee Assets systems;

f) to credit securitisation companies;

g) to the pension forms contemplated by Italian Legislative Decree no. 252 of 5 December 2005.

3. The Bank of Italy, after consulting CONSOB, adopts by its own regulations the enactment provisions of this article, in compliance with the European Union provisions.

Article 33
Contemplated businesses

1. Asset management companies manage the equity and risks of the UCIs and they provide for the administration and marketing of the UCIs which they manage.

2. Asset management companies also:

a) provide the portfolio management service;

b) set up and manage pension funds;

c) perform connected or instrumental activities;

d) provide services complementary to those of Annex 1, Section B, number (1), exclusively for the units of the UCIs managed[369];

e) provide investment advisory services;

f) market units and shares of UCIs managed by third parties, in compliance with the rules of conduct established by CONSOB after consultation with the Bank of Italy;

g) provide the service of the reception and transmission of orders, if authorised to practice the AIF management service.

3. The SICAVs and the SICAFs provide the collective asset management service and the activities contemplated by paragraph 1 relative to the capital collected by the offer of their own shares; they can also carry out connected and instrumental activities.

4. Asset management companies, SICAVs and SICAFs can delegate to third parties specific duties relative to the performance of the services referred to in this chapter. Delegation is by means which avoid the complete depletion of the company's activities and it is exercised in respect of the provisions on outsourcing contemplated in the implementation of article 6, paragraph 1, letter c-bis), number 8), and paragraph 2-bis), the asset management companies, the SICAVs and the SICAFs always remaining responsible towards the investors for the actions of the delegated subjects[370].

5. The Bank of Italy, after consulting CONSOB, dictates by its own regulations the enactment provisions of this article, in compliance with the European Union provisions.

Chapter I-bis[371]
Discipline of authorised subjects

Section I
Asset management companies

Article 34
Authorisation of Italian asset management companies

1. The Bank of Italy, after consulting CONSOB, authorises the asset management companies to provide the collective asset management service for both UCITS and AIFs, and to perform the portfolio service, the investment advisory service and the service of the reception and transmission of orders, when the following conditions are fulfilled[372]:

a) the legal form adopted is that of a joint stock company;

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 and control functions are suitable under Article 13[373];

e) the shareholders indicated in article 15, paragraph 1, have the requirements and meet the criteria laid down by Article 14 and the disqualification conditions contemplated by Article 15, paragraph 2, do not exist[374];

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 asset management company.

2. Authorisation shall be denied where verification of the conditions indicated in paragraph 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 authorised.

4. The Bank of Italy, after consulting CONSOB, shall authorise the merger or division of Italian asset management companies.

Article 35
Register

1. The asset management companies are registered on a special list held by the Bank of Italy, separated into two sections for the management of UCITS and of AIFs. EU management companies and EU and non-EU AIFMs which have made the communication required by articles 41-bis, 41-ter and 41-quater, are listed in separate sections of a special list attached to the register.[375]

2. The Bank of Italy shall communicate entries in the register referred to in paragraph 1 to CONSOB[376].

3. The persons referred to in paragraph 1 shall indicate the details of the entry in the register in their documents and correspondence.

Section II[377]
SICAVs and SICAFs

Article 35-bis
Constitution

1. The Bank of Italy, after consulting CONSOB, authorises the constitution of the SICAVs and SICAFs if the following conditions are fulfilled:

a) the company is a joint stock company which complies with the provisions of this chapter;

b) the registered office and the general management of the company are located in the Italian Republic;

c) the share capital amounts to at least that determined as a general rule by the Bank of Italy;

d) the subjects which carry out administrative, management and control functions are suitable under Article 13[378];

e) the shareholders indicated in Article 15, paragraph 1 , have the requirements and meet the criteria laid down by Article 14 and the disqualification conditions contemplated by Article 15, paragraph 2, do not exist[379];

f) for SICAVs, the articles of association contemplate, as the exclusive purpose, collective investment of the capital obtained by the offer of its own shares; for SICAFs, the articles of association contemplate, as the exclusive purpose, the collective investment of the capital obtained by the offer of its own shares and of the financial instruments of its equity holdings indicated in the said articles.

g) the structure of the group to which the company belongs is not such as to prejudice the effective supervision of the company and at least the information requested by article 15, paragraph 5, is given;

h) together with the deed of constitution and the articles of association, a programme is also presented concerning the initial activity, as well as a report on the organisational structure.

2. After consulting CONSOB, the Bank of Italy, by regulation:

a) disciplines the authorisation procedure contemplated by paragraph 1 and the cases of lapse of the same;

b) specifies the documentation that the founding shareholders must present together with the authorisation application and the content of the project of the deed of constitution and of the articles of association.

3. The Bank of Italy checks that the deed of constitution and articles of association project complies with the prescriptions of law and of regulations and, for SICAVs and SICAFs other than reserved AIFs, with the general criteria predetermined by the same.

4. The founding partners of the SICAVs or SICAFs proceed with the constitution of the company and make the deposits of the initial capital underwritten within thirty days from the issue of the authorisation. The initial capital must be entirely deposited.

5. The name of the SICAV must contain an indication that it is a variable capital joint stock investment company. The name of the SICAF must contain an indication that it is a fixed capital joint stock investment company. The name must appear on all the company's documents. Articles 2333, 2334, 2335 and 2336 of the Italian civil code do not apply to SICAVs or SICAFs; for SICAVs, conferment in nature is not allowed.

6. In the case of multi-segment SICAVs and SICAFs, each segment represents an independent capital separate to all effects from the other segments. The assets of a single SICAV can be divided into segments composed exclusively of AIFs or of UCITS.

Article 35-ter
Registers

1. SICAVs and SICAFs authorised in Italy are listed on special registers held by the Bank of Italy. The SICAV register is divided into two separate sections, according to whether the SICAV is in UCITS or AIF form.

2. The Bank of Italy communicates to CONSOB the registrations referred to in paragraph 1.

3. The subjects contemplated by paragraph 1 indicate their registration details in their deeds and correspondence.

Article 35-quater
SICAV capital and shares

1. The capital of the SICAV is always equal to the net equity held by the company, as determined pursuant to article 6, paragraph 1, letter c), n.5).

2. Articles from 2438 to 2447-decies of the Italian civil code are not applicable to SICAVs.

3. The shares representing the SICAV capital must be entirely paid up and registered at the moment of their issue.

4. SICAV shares can be nominative or to bearer, as established by the articles of association. Shares to bearer attribute one vote only for each shareholder regardless of the number of such shares held.

5. The SICAV articles of association must indicate the method for determining the value of the shares and the issue and reimbursement prices, as well as the frequency at which they can be issued and reimbursed.

6. The SICAV articles of association must contemplate:

a) limits on the issue of nominative shares;

b) special restrictions on the transfer of nominative shares;

c) the existence of several investment segments for each of which a specific category of shares can be issued; in this case, the criteria for the division of the general expenses between the segments is also established;

d) the possibility of issuing fractions of shares, without prejudice to the fact that corporate rights and attributed and can be exercised only by those who hold at least one share, pursuant to the rulings of this chapter.

7. Articles 2346, paragraph six, 2348, paragraphs two and three, 2349, 2350, paragraphs two and three, 2351, 2352, paragraph three, 2353, 2354, paragraph three, numbers 3) and 4), 2355-bis and 2356 of the Italian civil code are not applied to SICAVs.

8. A SICAV cannot issue bonds or Assets shares, nor can it buy or hold treasury shares.

Article 35-quinquies
SICAF capital and shares

1. Articles from 2447-bis to 2447-decies of the Italian civil code are not applied to SICAFs.

2. SICAF shares can be nominative or to bearer, as established by the articles of association. Shares to bearer attribute one vote only for each shareholder regardless of the number of such shares held.

3. The SICAF articles of association must indicate the method for determining the value of the shares and of any participatory financial instruments issued.

4. The SICAF articles of association must contemplate:

a) limits on the issue of nominative shares;

b) special restrictions on the transfer of nominative shares;

c) the existence of several investment segments for each of which a specific category of shares can be issued; in this case, the criteria for the division of the general expenses between the segments is also established;

d) the possibility of issuing fractions of shares, without prejudice to the fact that corporate rights and attributed and can be exercised only by those who hold at least one share, pursuant to the rulings of this chapter.

e) in the case of reserved SICAFs and without prejudice to article 35-bis, paragraph 4, the possibility of making payments for the shares underwritten in several instalments, subsequent to the shareholder's promise to make the payments requested by the SICAF on the basis of the investment needs.

5. Articles 2349, 2350, paragraphs two and three, 2353 of the Italian civil code are not applied to SICAFs. Article 2356 of the Italian civil code is not applied to SICAFs not reserved to professional investors or to the investor categories indicated by the regulation of article 39.

6. SICAFs cannot issue bonds.

Article 35-sexies
The SICAV shareholders' meeting

1. The SICAV ordinary and extraordinary shareholders' meeting on second convocation are regularly constituted and empowered to pass resolution regardless of the share capital represented at the meeting.

2. The vote can be expressed by correspondence if this is contemplated by the articles of association. In such a case, the convocation notice must contain the full resolution proposal. Votes expressed in such a way shall not be taken into consideration is the resolution subjected to the vote of the shareholders' meeting does not conform to that contained in the convocation notice, although the relative shares are counted for the purpose of the regular constitution of the extraordinary shareholders' meeting. By regulation of the Ministry of Economy and Finance, after consulting the Bank of Italy and CONSOB, the procedures for voting by correspondence are established.

3. The notice contemplated by article 2366, paragraph two, of the Italian civil code is also published in the manner contemplated by the articles of association for the publication of the value of the company's equity and the unit value of the shares, the term indicated in the same article 2366, paragraph two, is thirty days.

Article 35-septies
Amendments to articles of association

1. The Bank of Italy approves amendments to the articles of association of SICAVs and non-reserved SICAFs.

2. Resolutions involving amendments to the articles of association of SICAVs and non-reserved SICAFs cannot be registered pursuant to and by effect of article 2436 of the Italian civil code unless they have been approved according to the terms and procedures contemplated by paragraph 1. The resolution is sent to the Bank of Italy within fifteen days from the date of the meeting; the deposit contemplated by article 2436 of the Italian civil code must be made within fifteen days from the date of receipt of the Bank of Italy's approval provision. "Article 2376 of the Italian Civil Code does not apply.

Article 35-octies
Winding up and voluntary liquidation

1. Article 2484, paragraphs one, numbers 4) and 5) of the Italian civil code is not applied to SICAVs. If the SICAV capital falls below the measure determined pursuant to article 35-bis, paragraph 1, letter c), and remains so for a term of sixty days, the company shall be wound up. The term is suspended if a merger procedure is initiated with another SICAV or a SICAF.

2. For SICAVs and SICAFs, the deeds which must be publicised pursuant to article 2484, paragraphs three and four, of the Italian civil code, are also published by the methods contemplated by the articles of association for the publication of the company's equity value, and communicated to the Bank of Italy within ten days from entry on the companies register. The issue and reimbursement of shares are suspended, in the cases contemplated by article 2484, paragraph one, number 6), of the Italian civil code, from the date of the adoption of the resolution, in the cases contemplated by article 2484 of the Italian civil code and, for SICAVs, in the cases contemplated by paragraph 1 of this article, from the moment of the adoption of the board of directors' resolution of from the moment of the entry in the companies register, of the decree of the chairman of the court. The board of director's resolution is also transmitted to CONSOB within the same terms.

3. The appointment, revocation and replacement of the liquidators falls within the competence of the extraordinary shareholders' meeting. Article 2487 of the Italian civil code, except for paragraph one, letter c), are article 97 of the Consolidated Banking Law are applied.

4. The disposal plan and the plan for dividing the proceeds are communicated in advance to the Bank of Italy. The liquidators liquidate the company's assets in compliance with the provisions laid down by the Bank of Italy.

5. The financial statement of the liquidation is submitted to the judgement of the subject appointed to provide for the certified audit of the accounts, and it is published in the daily newspapers indicated in the articles of association.

6. The custodian, on the liquidators' instructions, provides for the reimbursement of the shares in the percentage contemplated by the final liquidation statement.

7. For everything not contemplated by this article, the provisions of Book V, title V, chapter VIII, of the Italian civil code are applied to SICAVs and SICAFs as far as compatible.

Article 35-novies
Transformation

1. A SICAV in the form of a UCITS cannot be transformed into anything other than an Italian UCITS. A SICAV in the form of an AIF or a SICAF cannot be transformed into anything other than an Italian UCI.

Section III[380]
Common provisions and exceptions

Article 35-decies
Rules of conduct and voting rights

1. Asset management companies, SICAVs and SICAFs which manage their own assets:

a) must operate diligently, correctly and with transparency in the best interests of the UCIs managed, the relative investors and the integrity of the market;

b) they must be organised in a manner which reduces to a minimum the risk of conflicts of interests also between the assets management and, in the case of a conflict of interests, they must act in order to ensure, in any case, fair treatment of the UCIs managed;

c) they must adopt appropriate measures to safeguard the rights of the investors of the UCIs managed and they must have adequate resources and appropriate procedures to ensure the efficient performance of the services;

d) they must ensure equal treatment to all the investors of the same UCI in respect of the conditions established by CONSOB, after consultation with the Bank of Italy, in compliance with the law of the European Union. In the case of reserved AIFs, preferential treatment to one or more investors or investor categories is allowed in respect of Directive 2011/61/EU and the relative enactment provisions;

e) they must provide, in the investors' interests, for the exercise of the voting rights inherent to the financial instruments of the UCI managed, unless otherwise ruled by law.

Article 35-undecies
Exceptions for Italian AIFMs

1. For the purposes indicated by article 6, paragraph 01, in the case of reserved Italian AIFs, if the total value of the assets managed does not exceed Euro 100 million, or Euro 500 million if the UCIs managed do not take avail of the financial lever and do not allow investors to exercise the reimbursement right for 5 years after the initial investment, the Bank of Italy and CONSOB, within the scope of their respective competence, may exempt the authorised managers from applying the enactment provisions of article 6, paragraphs 1, 2 and 2-bis.

Article 35-duodecies
Assessment of credit rating

1. In order to assess the credit rating of the assets in which the UCITSs invest, the managers use systems and procedures that do not envisage the exclusive or mechanical reliance on the assessments of the credit ratings agencies.

2. Considering the nature, scope and complexity of the assets of the UCITSs, the Bank of Italy and CONSOB, each insofar as they are competent, verify the suitability of the systems and procedures adopted by the managers in accordance with paragraph 1 and assess whether or not, under the scope of the UCITS investment policies, references to credit ratings issued by the credit ratings agencies, are made in such a way as to reduce the exclusive or mechanical reliance on the same[381].

Chapter II[382]
Italian UCIs

Section I
Mutual investment funds

Article 36
Mutual investment funds

1. The mutual investment fund is managed by the asset management company which has set up the fund or by the management company which has taken over the management, in compliance with law and regulations.

2. The mutual investment fund participation agreement is disciplined by the fund regulation. The Bank of Italy, after consulting CONSOB, determined the general criteria for the drafting of the regulations of funds other than reserved AIFs and the minimum contents of the same, in addition to what is contemplated by article 39.

3. An asset management company which has set up the fund or the management company which has taken over the management acts independently and in the fund investors' interests, assuming towards these latter the mandating party's obligations and responsibilities.

4. Each mutual investment fund or each segment of such a fund represents an independent capital, separate to all effects from that of the asset management company and from that of each investor, as well as from any other assets managed by the same company; with regard to the obligations undertaken on behalf of the fund, the asset management company answers only with the assets of that fund. Claims on such assets on the part of the creditors' of the asset management company or in the interests of the same, or on the part of the creditors of the custodian or sub-custodian or in the interests of the same are not admitted. Claims of creditors of a single investor are admitted only on the units held by said investor. Under no circumstances may the asset management company use the assets of the funds managed in its own interests or those of third parties.

5. The units in mutual funds are named or bearer, as established by the fund regulation. The Bank of Italy, after consulting CONSOB, can establish as a general rule the characteristics of certificates and the initial face value of the units, also in view of the need to ensure the portability of the units.

Article 37
Fund regulations

1. The regulations of each mutual investment fund define the features of the fund, discipline the functioning of the same, identify the manager and the custodian, define the division of tasks between such subjects, and regulates the relationships between such subjects and the fund investors.

2. More precisely, the regulations establish:

a) the name and the duration of the fund;

b) the procedures for participation in the fund, the terms and procedures for the issue of the certificates, for reimbursement of units and for the liquidation of the fund;

c) the bodies responsible for the investment choices and for the criteria for dividing the investments according to those choices;

d) the type of assets, financial instruments and other valuables in which the capital of the fund may be invested;

e) the criteria for the determination of the income and of the management results and any systems for the sharing and distribution of the same;

f) the expenses borne by the fund and those borne by the asset management company;

g) the measure or criteria for determining the commission due to the asset management company and the costs charged to investors;

h) the means for publishing the unit value;

i) whether the fund is a feeder fund.

3. Pursuant to the regulations of closed-ended funds other than reserved AIFs, general meetings of investors may be held only to decide on a change of manager. The meeting is called by the management company's board of directors, also at the request of investors representing at least 5 percent of the value of the units issued, and resolutions are approved with the favourable vote of the absolute majority of the units represented at the meeting. However, the quorum for resolution may not be less than 10 percent of the value of all the units issued.

4. The Bank of Italy approves the regulations of funds other than reserved AIFs, as well as relative amendments, assessing in particular the completeness of the same and the compatibility with the general criteria determined pursuant to articles 36 and 37.

5. The Bank of Italy indicates the cases in which, according to the object of the investment, the investor category and the fund functioning rules, the regulations and relative amendments are understood as approved in general. In other cases, the regulations are understood as approved when the Bank of Italy adopts no provision of non-approval within the term established in advance by the same.

Section II
SICAVs and SICAFs under outsourced management

Article 38
SICAVs and SICAFs which appoint an external manager

1. The Bank of Italy, after consultation with CONSOB, authorises the constitution of SICAVs and SICAFs which designate an external manager for their assets in the following cases:

a) the company is a joint stock company which complies with the provisions of this chapter;

b) the registered office and the general management of the company are located in the Italian Republic;

c) the share capital amounts to at least that determined as a general rule by the Bank of Italy;

d) the persons performing administrative, management and control functions are suitable under Article 13[383];

e) the shareholders indicated in Article 15, paragraph 1, have the requisites of integrity and meet the criteria laid down by Article 14 and the disqualification conditions contemplated by Article 15, paragraph 2, do not exist[384];

f) the articles of association contemplate:

1) for SICAVs, the exclusive purpose is collective investment of the capital obtained by the offer of its own shares to the public; for SICAFs, the exclusive purpose is the collective investment of the capital obtained by the offer to the public of its own shares and of the financial instruments of its equity holdings indicated in the said articles.

2) the entire assets are entrusted to the an external manager, and the designated company is identified;

g) the stipulation of an agreement between the manager, if other than an asset management company, and the custodian, which ensures this latter access to the information necessary for the performance of its duties, as contemplated by article 41-bis, paragraph 2-bis.

2. Article 35-bis, paragraph 3, 4, 5 and 6 are applied.

Section III
Common provisions

Article 39
Structure of Italian UCIs

1. The Ministry of Economy and Finance, with regulations adopted after consultation with the Bank of Italy and CONSOB, determines the general criteria which Italian UCIs must respect regarding:

a) the object of the investment;

b) the investor categories to which the offer of units and shares are destined.

c) whether the fund is open-ended or closed-ended, and the participation procedures, particularly the frequency of unit issue and reimbursement, and any minimum subscription amount and the procedures to be followed;

d) the minimum and maximum duration, if any;

e) the conditions and procedures for acquiring or conferring assets, both during and after the constitution of the fund[385].

2. The regulations contemplated by paragraph 1 also establish:

a) the non-professional investor categories to which the Italian reserved AIFs can be offered, according to the procedures contemplated by article 43;

b) the accounting registrations, the statement and the periodic prospectuses which the asset management company must draw up, in addition to those required of commercial enterprises, as well as the obligations to publish the statement and periodic prospectuses;

c) the cases in which the asset management company must request admission for the listing of the fund units on a regulated market;

d) the requisites and remuneration of the independent experts referred to in article 6, paragraph 1, letter c), number 5).

Section IV
Master-feeder structures

Article 40
Authorisation and operating rules of master-feeder structures

1. The Bank of Italy authorises the investment of the Italian feeder UCI in the master UCI in the following cases:

a) there are agreements between, respectively, the managers, the custodians and the certifying auditors or auditing firms of master UCIs and feeder UCIs, which allow access to the documents and information necessary for the performance of their respective duties;

b) the master UCI and the feeder UCI have the same manager and this latter adopts internal rules of conduct that ensure the same access to documents and information as per letter a);

c) the master UCI and the feeder UCI have the same characteristics as envisaged by the regulations contemplated by paragraph 2.

2. After consultation with CONSOB, the Bank of Italy regulates:

a) the authorisation procedure for the investment of the feeder UCI in the master UCI and the information and documents to be presented with the authorisation request;

b) the content of agreements and internal rules of conduct pursuant to paragraph 1;

c) the specific requirements of master UCIs and feeder UCIs and the rules applicable to the same;

d) the specific rules applicable to feeder UCIs, in the event of liquidation, merger, spin-off, temporary suspension of re-purchase, redemption or subscription of the master UCI units and the rules applicable to the feeder UCI and the master UCI to coordinate timing for the calculation and publication of their net asset value;

e) disclosure obligations and the exchange of information and documents between the manager, the custodian and the certifying auditor or auditing firm, of the master UCI and the feeder UCI respectively, and between these subjects and the Bank of Italy, CONSOB and the competent authorities of the EU and non-EU master and feeder UCIs.

3. As far as compatible, the provisions of sections I, II, III and III-ter of this chapter to master and feeder UCIs.

4. EU master UCIs which do not offer their own units in Italy to subjects other than feeder UCIs, article 42, paragraphs 1, 2, 3 and 4 do not apply. EU and non-EU master AIFs are subject to the provisions of chapter II-ter.

5. Without prejudice to the provisions of article 9, the certifying auditor or certifying auditing firm appointed to audit the feeder UCI must specify in the audit report any irregularities pointed out in the audit report of the master UCIs and the impact of such irregularities on the feeder UCI. If the financial years of the master UCI and feeder UCI close on different dates, the certifying auditor or certifying auditing firm appointed to audit the master UCI must draw up a specific audit report at the closure of the financial year of the feeder UCI.

6. The Bank of Italy and CONSOB, in compliance with EU provisions, notify the feeder UCI manager or the competent authority of the harmonised EU feeder UCITS of the provisions taken, in the case of failure to comply with the provisions of this chapter, in respect of the subjects indicated in this article, and the information received pursuant to article 8, paragraph 4, relative to the master UCI manager and the master UCI.

7. The provisions of this article do not apply to Italian reserved AIFs.

Section V
Merger and spin-off of asset investment bodies

Article 40-bis
UCI merger and spin-off

1. The Bank of Italy notifies CONSOB and authorises the merger or spin-off of Italian UCIs on the basis of the relative projects, of the certificates of conformity issued by the custodians of the funds involved and of the information communicated to the investors which must enable them to prepare a justified opinion of the impact of the merger on the investment. The Bank of Italy may indicate the cases, according to the characteristics of the UCIs concerned by the operation or the content of the information to the investors, in which authorisation for the UCI merger or spin-off is generally issued.

2. The asset management companies make a report available to fund investors and the Bank of Italy, drawn up by the custodian or by an officially recognised auditor or auditing firm, which certifies the correctness of the criteria adopted to measure the fund’s assets and liabilities, any monetary balance, the calculation method and the effective exchange ratio at the reference date of the said report.

3. As far as compatible, the articles contained in book V, title V, chapter X, sections II and III of the civil code are applied to SICAVs and SICAFs involved in merger or spin-off operations. The merger or spin-off project, drawn up according to the requirements of the Bank of Italy Regulation pursuant to paragraph 4 and any general meeting resolutions amending the relative projects must be authorised in advance by the Bank of Italy. Without the authorisation referred to in paragraph 1, such operations cannot be entered in the companies register.

4. After consultation with CONSOB, the Bank of Italy regulates:

a) the authorisation procedure and the relative conditions;

b) the date of effect of the operation and the criteria for the allocation of the relative costs;

c) the information to be given to the investors;

d) the forms for which mergers and spin-offs are admitted;

e) the object of the certificates of conformity and the report contemplated by paragraphs 1 and 2;

f) the rights of the investors.

5. The provisions of this article do not apply to Italian reserved AIFs.

Article 40-ter
Cross-border UCI merger

1. Mergers of EU UCITS and Italian UCITS and those which involve Italian UCITS whose units are marketed in another EU state pursuant to article 41, paragraph 2, letter a) a), are subject not only to the provisions of article 40-bis but also to the provisions contained in this article.

2. If the UCITS resulting from the merger or the incorporating UCITS is not Italian, the merger authorisation is issued by the Bank of Italy in accordance with the provisions of EU legislation.

3. If the UCITS resulting from the merger or the incorporating UCITS is Italian, the Bank of Italy may request the said UCITS to amend its disclosure to investors in accordance with the provisions of EU legislation.

4. The Bank of Italy, after consulting CONSOB, defines by regulation the enactment provisions of this article, in compliance with EU provisions.

Chapter II-bis[386]
Management company cross-border operations

Article 41
Cross-border operations of asset management companies

1. Asset management companies can operate, also without having a stable organisation, in an EU or non-EU state, in conformity with the regulation contemplated by paragraph 2.

2. The Bank of Italy, after consulting CONSOB, establishes by regulation the enactment rules of the EU provisions on the conditions and procedures which the asset management companies must respect for:

a) performing in EU States the activities for which they are authorised pursuant to Directive 2009/65/EC and the relative enactment provisions, including the institution of UCITS;

b) cross-border operations in EU and non-EU States, in conformity with the provisions of Directive 2011/61/EU and of the relative enactment provisions, without prejudice to those of chapter II-ter.

3. The Bank of Italy, in the regulation contemplated by paragraph 2, also lays down the conditions and procedures on the basis of which the asset management companies are authorised by the Bank of Italy, in accordance with CONSOB, for cross-border operations in EU and non-EU States in the cases excluded from the application of Directives 2009/65/EC and 2011/61/EU. For asset management companies to operate in a non-EU state, appropriate collaboration agreements must exist with the competent authorities of the host State.

4. The provisions of this article also apply to SICAVs and SICAFs which manage their own assets.

Article 41-bis
EU management companies

1. For the practice of the activities for which they are authorised pursuant to European Union provisions, the EU management companies may establish branches in the Italian Republic. The first establishment must be preceded by a communication to the Bank of Italy and CONSOB on the part of the competent authorities of the Home State. The branch can start operations two months after the communication.

2. Without prejudice to the provisions of article 42, EU management companies may perform the activities for which they are authorised pursuant to EU provisions in the Italian Republic without establishing a branch, providing the Bank of Italy and CONSOB are informed by the competent authority of the Home State.

3. EU management companies which intend to manage an Italian UCITS must respect the provisions of chapter II, as well as the enactment provisions of article 6, paragraph 1, letter c). The Bank of Italy approves the fund regulations pursuant article 37 or authorises the SICAV, providing:

a) the fund or the SICAV complies with the provisions of this paragraph;

b) the EU management company is authorised to manage a UCITS in the Home State with similar characteristics to that approved;

c) the EU management company has stipulated an agreement with the custodian which ensures that the custodian has access to the information necessary for the performance of its duties.

4. Should the Bank of Italy intend to refuse fund regulation approval of SICAV authorisation referred to in paragraph 3, it consults the competent authority of the Home State of the EU management company.

5. After consulting CONSOB, the Bank of Italy regulates the conditions and procedures with which the EU management companies must comply in order to carry out the activities mentioned under paragraphs 1, 2 and 3 in the Italian Republic by the establishment of branches or as the free provision of services, and the content of the agreement between the EU management company and the custodian envisaged by paragraph 3, letter c).

6. EU management companies that perform the activities referred to in paras 1 and 3 in the Italy, through the establishment of branches, are required to comply with the rules of conduct laid down in article 35-decies. The Bank of Italy and CONSOB may request EU management companies, within the context of their respective competences, for the communication of data and information and the transmission of deeds and documents in the ways and under the terms they have established. The Bank of Italy and CONSOB, within the context of their respective competences, may also request information from the personnel of the EU management company through the latter[387].

Article 41-ter
EU AIFMs

1. Without prejudice to the provisions of chapter II-ter, EU AIFMs can perform the collective asset management for which they are authorised pursuant to the EU provisions in the Italian Republic as the free performance of services or by the establishment of branches, providing the Bank of Italy is notified by the competent authority of the Home State. The Bank of Italy immediately transmits copy of said communication to CONSOB.

2. EU AIFMs which intend to manage an Italian AIF must respect the provisions of chapter II, as well as the enactment provisions of article 6, paragraph 1, letter c), and the following conditions:

a) they must be authorised in the Home State for the management of AIFs with the same characteristics as those they intend to set up and manage in Italy;

b) the must have stipulated an agreement with the custodian which ensures the latter access to the information necessary for the performance of its duties.

3. The Bank of Italy, after consultation with CONSOB, disciplines by regulation the content of the agreement between the management company and the custodian contemplated by paragraph 2, letter b).

4. EU AIFMs that perform the activities referred to in paragraph 1 and chapter II-ter in the Italy, through the establishment of branches, are required to comply with the rules of conduct laid down in article 35-decies and the relative regulation and implementation regulations. The obligations related to the management of the conflict of interests adopted in implementation of article 6, paragraph 2, letter b-bis), number 6), and paragraph 2-bis. The Bank of Italy and CONSOB may request EU GEIFAs, within the context of their respective competences, for the communication of data and information and the transmission of deeds and documents in the ways and under the terms they have established. The Bank of Italy and CONSOB, within the context of their respective competences, may also request information from the personnel of the GEIFA company through the latter.[388].

Article 41-quater
Non-EU AIFMs

1. The Bank of Italy, in accordance with CONSOB, authorises non-EU AIFMs to manage Italian and EU AIFs or to market in the EU the AIFs managed, when Italy, pursuant to Directive 2011/61/EU, is the State of reference. The Bank of Italy immediately transmits to CONSOB copy of the authorisation application of such companies. The Bank of Italy lists non-EU AIFMs in a special section of the register contemplated by article 35. The Bank of Italy notifies CONSOB of such registrations.

2. Non-EU AIFMs authorised in another EU state which intend to manage an Italian AIF as the free performance of services or through established branches are subject, as far as compatible, to article 41-ter.

3. Non-EU AIFMs that perform the activities referred to in paragraph 1 and chapter in Italy, through the establishment of branches, comply with the rules of conduct laid down in article 35-decies and the relative regulation and implementation regulations as well as the obligations related to the management of the conflict of interests adopted in implementation of article 6, paragraph 2, letter b-bis), number 6), and paragraph 2-bis. The Bank of Italy and CONSOB may request the Italian branches of non- EU GEIFAs, within the context of their respective competences, for the communication of data and information and the transmission of deeds and documents in the ways and under the terms they have established. The Bank of Italy and CONSOB, within the context of their respective competences, may also request information from the personnel of the Italian branches of non-EU GEIFAs even through the latter[389].

4. After consulting CONSOB, the Bank of Italy lays down by regulation:

a) the conditions and the procedure for the issue of the authorisation referred to under paragraph 1;

b) the enactment provisions of the EU provisions concerning the conditions and procedures that the non-EU AIFMs authorised in Italy must respect in the case of cross-border operations in the EU states in conformity with the provisions of Directive 2011/61/EU and the relative enactment provisions, without prejudice to the provisions of chapter II-ter[390].

Chapter II-ter[391]
Marketing of UCIs

Article 42
Marketing in Italy of EU UCITS units and shares

1. The marketing in Italy of EU UCITS units and shares must be preceded by communication to CONSOB by the authority of the UCITS Home State, in accordance with the procedures set out by EU provisions and in compliance with the relevant enactment regulations adopted by CONSOB Regulation, after consulting the Bank of Italy. By the same regulation, CONSOB determines the methods by which the investors’ rights shall be exercised in Italy concerning activities related to payment, repurchase and reimbursement of units.

2. EU management companies intending to offer in Italy, without established branches, units of UCITS managed by the same are not subject to the provisions of article 41-bis.

3. After consulting CONSOB, the Bank of Italy, by regulation:

a) identifies the information to be given to the public within the sphere of the marketing of the units or shares in the Italian Republic or of the shares in the Italian Republic and the means by which such information must be given;

b) determines the method by which the issue or sale, repurchase or reimbursement price of the units or shares must be published[392].

4. The Bank of Italy and CONSOB, within the sphere of their respective duties, may request the issuers and those who provide for the marketing of the units and shares indicated in paragraph one, the communication, also periodically, of data and news and the transmission of deeds and documents.

Article 43
Marketing of reserved AIFs

1. The marketing of AIFs is the offer, also indirect, on the initiative or on behalf of the manager, of the AIF units and shares managed, addressed to resident investors or those which registered head office in the EU.

2. The marketing in Italy of units or shares of Italian reserved AIFs, EU AIFs and non-EU AIFs managed by an asset management company or by a non-EU AIFM authorised in Italy and the marketing in an EU state other than Italy, addressed to professional investors, of units and shares of Italian AIFs and non-EU AIFs managed by an asset management company or by a non-EU AIFM authorised in Italy, must be preceded no notification to CONSOB. CONSOB immediately transmits to the Bank of Italy the information contained in the notification and the documents attached to the same.

3. The notification shall contain:

a) the letter of notification accompanied by the business programme which identifies the AIF marketed and the Home State of the AIF;

b) the AIF regulations and articles of association;

c) the identify of the custodian of the AIF;

d) the description of the AIF and the other information made available to the investors pursuant to article 6, paragraph 2, letter a), no. 3-bis), and the relative enactment discipline;

e) indication of the Home State of the master UCITS if the UCITS marketed is a feeder UCITS;

f) if relevant, indication of the EU State other than Italy in which the AIF units or shares will be marketed;

g) the information on the procedures established to prevent the marketing of the AIF units or shares towards retail investors. For this purpose, the regulations or the statue and the documentation made available to investors contemplate that the AIF units or shares may be marketed only to professional investors.

4. If there is no reason for hindrance, CONSOB, in accordance with the Bank of Italy, within 20 working days from receiving the notification:

a) informs the asset management company or the non-EU AIFM that it can launch the marketing of the relative AIF units or shares in Italy. In the case of the marketing in Italy of an EU AIF, the notification is also transmitted to the competent authority of the AIF Home State;

b) transmits to the competent authority of the EU State other than Italy in which the asset management company or the non-EU AIFM intends to market the AIF, the notification dossier which includes the documentation contemplated by paragraph 3 and the certification referred to in paragraph 5. CONSOB immediately informs the manager of the transmission of the notification dossier.

The manager cannot start marketing before receiving this communication.

5. The Bank of Italy expresses its agreement on the profiles indicated in letters a), b), c) and e) of paragraph 3, and on the manager's adequacy for the management of the AIF in question. In the case of marketing in an EU State other than Italy, the Bank of Italy, when it issues its agreement, certifies that the manager is authorised to manage the AIF in question.

6. CONSOB, after consultation with the Bank of Italy, defines by regulation the procedures for the notification contemplated by paragraph 2.

7. In the case of relevant modifications to the information and documents indicated in paragraph 3, the manager communicates such modifications to CONSOB at least thirty days before entry into force or, in the case of modifications which cannot be planned in advance, as soon as they are issued. CONSOB immediately transmits to the Bank of Italy the information contained in the notification and the documents attached to the same. Within thirty days from receiving the communication, CONSOB and the Bank of Italy, within the scope of their respective competence, may ban the modification.

8. The marketing in Italy, to professional investors and to the categories of investors identified by the regulations referred to in article 39, of units of shares of Italian reserved AIFs, EU and non-EU AIFs managed by an EU AIFM or by a non-EU AIFM authorised in an EU State other than Italy, shall be preceded by a notification to CONSOB from the authority of the Home Member State for each AIF marketed. CONSOB immediately transmits to the Bank of Italy the information contained in the notification and the documents attached to the same. In the case of the marketing of Italian AIF units or shares, the provisions of article 41-ter, paragraphs 2 and 3 shall hold firm. CONSOB, after consultation with the Bank of Italy, defines by regulation the procedure for the notification contemplated by this paragraph.

9. The provisions of this article relative to asset management companies, EU AIFMs and non-EU AIFMs are also applicable to Italian AIFs and to EU and non-EU AIFs which manage their own assets.

Article 44
Marketing of non-reserved AIFs

1. The provisions of articles 35-bis, 37, 38 and 39 always holding firm, the marketing in Italy of units or shares of Italian non-reserved AIFs to the categories of investors referred to in article 43, is preceded by a notification forwarded by the manager to CONSOB for each AIF marketed.

2. The following documentation shall be attached to the letter of notification:

a) the prospectus destined for publication;

b) the regulations or the articles of association of the AIF to be marketed;

c) the document containing the additional information to be made available before the investment pursuant to article 6, paragraph 2, letter a), no. 3-bis), and the relative enactment provisions, which show the absence of preferential treatment to one or more investors or categories of investors.

3. CONSOB informs the manager that it can begin marketing to retail investors not falling within the categories of investors to which the reserved Italian AIFs can be marketed, the AIFs indicated in the notification within 10 working days from receiving the same when the completeness, coherence and comprehensibility of the information contained in the documentation attached to the letter of notification has been verified. The manager cannot begin marketing to the retail investors not included in the categories of investors to which the reserved Italian AIFs can be marketed, before receiving the communication.

4. CONSOB, after consultation with the Bank of Italy, disciplines the notification procedure contemplated by paragraph 1.

5. The managers of EU and non-EU AIFs which market in the Home State of the said AIFs the relative shares or units to retail investors and which intend to market such AIFs in Italy to retail investors not included in the categories of investors to which the Italian reserved AIFs can be marketed, shall present to CONSOB application for authorisation. CONSOB, in accordance with the Bank of Italy on the profiles referred to under letters b) and c), authorises the marketing if the following conditions are respected:

a) the managers have completed the procedures contemplated by article 43;

b) the functioning schemes and the risk mitigation and fractioning provisions for said AIFs are compatible with those contemplated for Italian AIFs;

c) the discipline of the AIF custodian is equivalent to that applicable to Italian non-reserved AIFs;

d) the AIF regulations or articles of association do not allow for preferential treatment to one or more investors or categories of investors pursuant to article 35-decies, paragraph 1, letter d), and the EU provisions in force which discipline the subject;

e) the organisational model adopted shall ensure the exercise in Italy of the investor's economic rights in compliance with the regulatory provisions dictated by CONSOB, after consultation with the Bank of Italy;

f) the information to be made available to retail investors before the investment must be complete, coherent and comprehensible;

6. CONSOB, after consultation with the Bank of Italy, defines by regulation the procedures for the issue of the authorisation contemplated by paragraph 5[393].

7. The offer to the public and the admission for the trading of the AIF units or shares marketed pursuant to this article are subject to the provisions contemplated by part IV, title II, chapter I and title III, chapter I and the relative enactment provisions.

8. In the case of AIFs subject to the discipline contemplated by part IV, title II, chapter I, section I, for the offer of which Italy is the Home Member State, the notification contemplated by paragraph 1 shall be considered as made also for the purposes and effects of article 94, paragraph 1, and the verification of the completeness, coherence and comprehensibility of the information contained in the document referred to in paragraph 2, letter c), is carried out during the course of the procedure contemplated by article 94-bis, paragraph 2. The communication contemplated by paragraph 3 is made with the provision of the approval of the prospectus.

9. CONSOB and the Bank of Italy exercise the powers provided for by articles 6-bis and 6-ter regarding foreign bodies indicated in paragraph 5 and relative managers. Article 8 also applies to said parties[394].

Chapter II-quater[395]
Obligations of the asset management companies the AIFs of which acquire relevant or or controlling interests of non-listed companies and of issuers

Article 45
Obligations relative to the acquisition of relevant or controlling interests of non-listed companies

1. The asset management companies inform CONSOB when they reach, exceed or reduce to below 10%, 20%, 30%, 50% and 75% the voting rights in a non-listed company consequent to the acquisition, holding or disposal of stakes in the share capital on the part of the Italian AIF or the EU or non-EU AIF managed by the same. The communication must be made within ten working days of the date of the operation.

2. The asset management companies whose Italian, EU or non-EU AIF acquire or hold, also indirectly through trust companies or proxies, the absolute majority of the voting rights which can be exercised in the shareholders' meeting of a non-listed company, shall report the acquisition of control within ten working days:

a) to the company;

b) to the shareholders whose identity and addresses are available to the asset management company or which can be made available through the non-listed company or through a register to which the asset management company may have access;

c) to CONSOB.

3. The provisions contained in paragraphs 1 and 2 also apply to:

a) the asset management companies whose AIFs acquire, also jointly, relevant interests in a non-listed company;

b) the asset management companies which manage one or more AIFs which, individually or jointly on the basis of an agreement, acquire control of a non-listed company;

c) the asset management companies which cooperate with other asset management companies or with EU or non-EU AIFMs, on the basis of an agreement pursuant to which the AIFs managed by the same jointly acquire control of a non-listed company;

d) the SICAVs and the SICAFs which directly manage their own assets and which are in the situations contemplated by letters a), b) and c).

4. For the purposes of this article, non-listed companies are those with registered office in the European Union and which have no shares admitted for trading on a regulated market, other than:

a) micro, small and medium companies as defined by article 2, paragraph 1, of the annex to Recommendation 2003/361/EC of the European Commission, of 6 May 2003;

b) vehicle companies whose purpose is the acquisition, holding or management of fixed assets.

5. CONSOB, in compliance with the provisions of Directive 2011/61/EU, establishes by regulation:

a) the procedures for making the communications contemplated by paragraph 1;

b) the content and the procedures for compliance with the information obligations towards the subjects indicated in paragraph 2, and those of the workers' representatives of the non-listed company or, in their absence, the workers themselves;

c) the content of the additional information to be included in the annual report of the non-listed subsidiary, as well as the procedures and terms according to which said report is made available by the governing body to the workers' representatives or, in their absence, to the workers themselves;

d) the obligations that the asset management company must fulfil to guarantee the protection of the capital and to prevent the unbundling of the activities of the non-listed company for a period of twenty-four months from the acquisition of control in the part of the UCIs managed[396].

Article 46
Obligations relative to the acquisition of a controlling interest of an issuer

1. The asset management companies whose Italian, EU and non-EU AIFs acquire a controlling stake of an issuer's capital communicated the information established by CONSOB in its own regulation, according to the procedures and terms established therein, to:

a) the issuer;

b) the shareholders whose identity and addresses are available to the asset management company or which can be made available through the issuer or through a register to which the asset management company may have access;

c) CONSOB[397].

2. For the purposes contemplated by paragraph 1, the acquisition of a controlling stake refers to the acquisition, on the part of an asset management company, individually or jointly with other asset management companies, and also indirectly through trustees or proxies, of a stake which attributes voting rights equal to or more than thirty percent of the capital of an issuer with registered office in Italy, or the diverse threshold determined pursuant to article 5, paragraph 3, of Directive 2004/25/EC, concerning public acquisition offers, according to the law of the Member State where the issuer has its head office.

3. This article also applies to:

a) the asset management companies which manage one or more Italian, EU or non-EU AIFs which, individually or jointly on the basis of an agreement, acquire control of an issuer;

b) the asset management companies which cooperate with other asset management companies or with EU or non-EU AIFMs, on the basis of an agreement pursuant to which the Italian, EU or non-EU AIFs managed by the same jointly acquire control of an issuer;

c) the SICAVs and the SICAFs which directly manage their own assets and which are in the situations contemplated by letters a) and b).

4. CONSOB, in compliance with the provisions of Directive 2011/61/EU, establishes by regulation:

a) the content and the procedures for compliance with the information obligations towards the subjects indicated in paragraph 1, and those of the workers' representatives of the issuer;

b) or, in their absence, the workers themselves;

c) the obligations that the asset management company must fulfil to guarantee the protection of the capital and to prevent the unbundling of the activities of the issuer for a period of twenty-four months from the acquisition of control in the part of the UCIs managed[398].

5. For the purposes of this article, issuers are companies with shares admitted for trading on a regulated market, other than:

a) micro, small and medium companies as defined by article 2, paragraph 1, of the annex to Recommendation 2003/361/EC of the European Commission, of 6 May 2003;

b) vehicle companies whose purpose is the acquisition, holding or management of fixed assets.

Chapter II-quinquies[399]
UCITS credit

Article 46-bis
Direct issue of loans by Italian AIFs

1. Italian AIFs may invest in loans, against the equity of the same, in favour of subjects other than consumers, in line with the rules of this decree and the relative implementation provisions adopted pursuant to articles 6 paragraph 1, and 39.

Article 46-ter
Direct issue of loans by EU AIFs in Italy

1. EU AIFs may invest in loans, against the equity of the same, to subjects other than consumers, in Italy with the following conditions:

a) the EU AIF is authorised by the competent authority of the member states of origin to invest in loans, including those issued against the equity of the same, in its country of origin;

b) the EU AIF has a closed structure and the operating model of the same, particularly regarding investment methods, is the same as that of the Italian AIFs that invest in loans;

c) the regulations of the country of origin of the EU AIF regarding containment and portioning of risk, including financial leverage limits, are equivalent to the regulations established for Italian AIFs that invest in loans. Equivalence with respect to Italian regulations can be checked also with reference only to the provisions of the by-laws or regulations of the EU AIF, providing that the competent authority of the member state of origin assures their observance.

2. The managers of EU AIFs which intend to invest in loans against the equity of the same in Italy inform Bank of Italy of this intention. The EU AIF may not begin operations until sixty days from this communication, within which time Bank of Italy may prohibit investment in loans against the equity of the same in Italy.

3. The Bank of Italy and CONSOB may request managers, within the context of their respective competences, to communicated data and information and transmit deeds and documents in the ways and under the terms they have established. The Bank of Italy and CONSOB, within the context of their respective competences, may request information from personnel of the managers, even through the latter. Article 8, paragraph 1 is applicable to the managers. Bank of Italy may provide for the participation of the EU AIFs at the Central Credit Register pursuant to paragraph 1, and may also provide that participation occurs via banks and intermediaries listed in the register pursuant to article 106 of Italian Legislative Decree no. 385 of 1 September 1993[400].

4. Italian provisions applicable to EU AIFs remain effective for the sale of shares and quotas and every other area not expressly regulated by this article.

5. Bank of Italy dictates the implementing provisions of the present article.

Article 46-quater
Other applicable provisions

1. Regarding loans issued in Italy by Italian AIFs and EU AIFs, against the equity of the same, the following find application: provisions on transparency of contractual terms and terms governing relationships with customers pursuant to Title VI, Chapters I and III, excluding article 128-bis, and the provisions on administrative sanctions pursuant to Title VIII, Chapters V and VI, of Italian Legislative Decree no. 385 of 1 September 1993, without prejudice to that provided for by article 23, paragraph 4 of this decree.

2. The AIF manager is bound to respect the obligations laid out by the provisions indicated in paragraph 1.

Chapter III[401]
Custodian

Article 47
Custodian mandate

1. For each UCI, the manager confers custodian mandate on a single subject, to which the assets of the UCI are entrusted as contemplated in this chapter.

2. The job of depositary may be performed Italian banks, Italian branches of EU banks and banks of non-EU countries, investment firms and Italian branches EU Investment companies UE and companies in non-EU countries, other than banks[402]

3. The Bank of Italy authorises the exercise of custodian functions and, after consulting CONSOB, the conditions for accepting the mandate.

4. The directors and auditors of the custodian report without delay to the Bank of Italy and CONSOB, each for its own competence, any irregularities found in the manager's management and in the management of the UCIs and, at the request of the Bank of Italy or CONSOB, gives information on facts and acts of which it gains knowledge in the performance of its custodian duties.

Article 48
The custodian's duties

1. The custodian acts independently and in the interests of the UCI investors. It adopts every appropriate measure to prevent potential conflicts of interests between the performance of its custodian duties and the other activities carried out.

2. The custodian fulfils the obligations of the custody of the financial instruments entrusted to the same and verification of ownership, and also the obligation to keep registers of other assets. Unless entrusted to other subjects, it also holds the available liquidity of the UCIs.

3. The custodian, in the performance of its duties:

a) verifies the legitimacy of the operations of sale, issue, repurchase, reimbursement and annulment of the fund units, as well as the destination of the revenues of the UCI;

b) ascertains the correctness of the calculation of the value on the part of the UCITS[403];

c) verifies, in operations relative to the UCI, that the counter-obligation is fulfilled within the established terms;

d) carries out the manager's instructions, providing they are not against the law, regulations or the prescriptions of the supervisory bodies;

e) monitors the UCI cash flows, if the liquidity is entrusted to the same.

3-bis. The custodian may carry out other activities for the provider, including the calculation of the value of the parties to the UCITS, without prejudice to the application of the law on outsourcing pursuant to article 6, paragraph 1, letter c-bis), number 8), and paragraph 2-bis and providing it separates, according to hierarchy and function, the execution of the duties of custodian from its other potentially conflicting duties and that the potential conflicts of interests are identified, managed, monitored and communicated to the UCITS investors[404].

4. The Bank of Italy, after consulting CONSOB, issues enactment provisions of this article, also with reference to the identification of subjects other than the custodian to which the available liquidity may be entrusted, the procedures for the deposit of such available liquidity, and the conditions for delegating custody and for the re-use of the UCI assets on the part of the custodian.

Article 49
The custodian's responsibilities

1. The custodian is responsible towards the UCI manager and investors for any prejudice they may suffer consequent to non-fulfilment of its obligations.

2. In the case of the loss of financial instruments in custody, unless the custodian can prove that the default was caused by accident or by force majeure, it shall be held to return, without undue delay, financial instruments of the same kind or a sum of the corresponding amount, and shall be held liable for any other loss sustained by the UCI or the investors consequent to failure to respect its obligations, whether intentional or due to negligence.

3. In the case of loss of financial instruments on the part of the third party to which custody has been delegated, the custodian shall always bear liability, unless written agreements have been stipulated between the manager, the custodian and the third party to which custody has been delegated, aimed at determining the exclusive assumption of liability on the part of the third party. For the possible stipulation of such agreements, the manager, the custodian and the third party shall adhere to the discipline, established by the Bank of Italy after consultation with CONSOB, which identifies the cases in which such agreements are allowed and their minimum content.

4. In the case of the exclusive assumption of liability on the part of the third party pursuant to paragraph 3, it shall answer pursuant to paragraph 2. The third party shall always remain liable if it, in turn, delegates the custody of the financial instruments to another subject, without prejudice to the possibility of agreements as contemplated in paragraph 3.

Article 50
Other applicable provisions

…omissis…[405]

Chapter III-bis[406]
Master-feeder structures

Article 50-bis
Authorisation and rules of operation of master-feeder structures

…omissis…[407]

Chapter III-ter[408]
Merger and spin-off of asset investment bodies

Article 50-ter
UCITS merger and spin-off

…omissis…[409]

Article 50-quater
Cross-border merger of harmonised UCITS

…omissis…[410]

Chapter III-quater[411]
Management of crowdfunding portals for the for the small and medium-sized enterprises and for the social enterprises[412]

Article 50-quinquies [413]
Management of crowdfunding portals for the for the small and medium-sized enterprises and for the social enterprises[414]

1. The portal manager is the subject that professionally manages the portal management service for the management of crowdfunding portals for the small and medium-sized enterprises and for the social enterprises and is entered in the register referred to in paragraph 2[415].

2. The management of crowdfunding portals for small and medium-sized enterprises and for social enterprises is reserved for investment firms, EU investment companies, companies of non-EU countries other than banks authorised in Italy, the managers referred to in article 1, paragraph 1, letter q-bis), for just the offer of stakes or shares of UCI that invest mainly in small and medium-sized businesses and banks, authorised to the relative investment services, as well as to the parties entered in the appropriate register kept by CONSOB, on the condition that they transmit orders for the subscription and the buying and selling of financial instruments representative of capital exclusively to banks, investment firms, EU investment companies and Companies of non-EU countries other than banks, and orders for shares or stakes of the UCI to the relative managers. The provisions of part II, title II, chapter II and of the article 32 are not applied to the parties entered in this register[416].

3. The following requisites are necessary for entry on the register referred to in paragraph:

a) The enterprise must be a joint stock company, a company with unlimited responsibility, a limited company or a cooperative society;

b) the registered and administrative head office or, for Community subjects, the permanent registered office must be located in the Italian Republic;

c) the company's purpose must be that contemplated in paragraph 1;

d) the controlling shareholders or the subjects who have power of administration, direction and control must have the integrity requirements established by CONSOB;

e) the controlling shareholders or the subjects who have power of administration, direction and control must have the professional requirements established by CONSOB;

e-bis) adhesion to system of indemnification to protect investors or taking out an insurance policy for professional responsibility that guarantees protection equivalent to clients according to the criteria established by CONSOB through its regulation[417].

4. The subjects on the register referred to in paragraph 2 may not hold sums of money or financial instruments belonging to third parties.

5. CONSOB determines, by regulation, the principles and criteria relative to:

a) the format of the register and the relative forms of publicity;

b) any other conditions for entry on the register, reasons for suspension, for being struck off and for reinstatement, and the measures applicable to those on the register;

c) any other causes of incompatibility;

d) the rules of conduct that portal managers must respect in their relations with investors, contemplating a simplified system for professional customers[418].

6. CONSOB supervises portal managers to check on compliance with the provisions of this article and the relative implementation rules. For this purpose, CONSOB call the managers, directors, statutory auditors and personnel, request the communication of data and of information and may request the communication of data and information and the transmission of deeds and documents, fixing the relative terms, and may also carry out inspections[419].

 6-bis. CONSOB adopts the implementing provisions of the article 4-undecies[420].

7. …omissis…[421]

TITLE IV
INJUNCTIVE REMEDIES AND CRISES

Chapter I
Injunctive remedies[422]

Article 51
Injunctive remedies vis-a-vis Italian and non-EU intermediaries

…omissis…[423]

Article 52
Special measures for EU intermediaries

…omissis…[424]

Article 53
Suspension of administrative bodies

…omissis…[425]

Article 54
Injunction orders on EU UCITS and EU and non-EU AIFs with stakes or shares offered in Italy

…omissis…[426]

Article 55
Precautionary measures applicable to the financial advisors authorised to make off-premises offers

…omissis…[427]

Chapter I-bis[428]
Recovery plans, group financial support and early intervention

Article 55-bis
Scope of application

1. This Chapter applied to investment companies whose registered office is in Italy and which provide one or more of the following services or investment activities:

a) trading on its own behalf;

b) subscribing and/or placement, with firm commitment or with guarantee towards the issuer;

c) management of multilateral trading facilities.

2. For the purposes of this Chapter, the definitions contained in article 69-bis of the Consolidated Law on Banking are applicable.

3. The Bank of Italy adopts provisions for the implementation of this Chapter, also to take into account the guidelines of the EBA.

Article 55-ter
Recovery plans

1. The investment companies shall adopt an individual recovery plan in compliance with article 69-quater of the Consolidated Law on Banking. The investment companies belonging to a banking group or to a group identified pursuant to article 11 are not held to provide themselves with an individual recovery plan unless they are specifically requested to do so by the Bank of Italy. For investment companies subject to surveillance consolidated in another Community State, the request for individual plans is made in compliance with article 69-septies of the Consolidated Law on Banking.

2. The leading company of a group as contemplated by article 11 shall adopt a group recovery plan in the cases and in the manner contemplated by article 69-quinquies of the Consolidated Law on Banking.

3. The Bank of Italy, after consulting CONSOB for the aspects of its competence, assesses the recovery plans indicated under paragraphs 1 and 2 according to the provisions of articles 69-sexies and 69-septies of the Consolidated Law on Banking. It may provide for simplified methods of fulfilling the obligations established by this article as contemplated by article 69-decies of the Consolidated Law on Banking.

4. Articles 69-octies and 69-novies of the Consolidated Law on Banking shall be applied.

Article 55-quater
Group financial support

1. Investment companies belonging to a group as contemplated by article 11 may conclude agreements with other members of the group for the supply of financial support if the conditions for early intervention pursuant to article 55-quinquies are met for one of them. The agreements are subject, as far as compatible, with articles 69-duodecies, 69-terdecies, 69-quaterdecies, 69-quinquiesdecies, 69-sexiesdecies and 69-septiesdecies of the Consolidated Law on Banking.

Article 55-quinquies
Early intervention

1. The Bank of Italy, after consulting CONSOB for the aspects of its competence, may issue the measures indicated under articles 69-noviesdecies and 69-vicies-semel of the Consolidated Law on Banking towards an investment company or a company at the head of a group pursuant to article 11 in the case of the conditions indicated by article 69-octiesdecies of the Consolidated Law on Banking. For this purpose the Bank of Italy exercises the powers indicated by articles 6-bis, paras 1, 2, 3, 11; 6-ter, paras 1, 5, 6, 7, 8; and 12, paragraph 5. The measures are adopted at the proposal of CONSOB when the infringements concerns provisions that it supervises. The measures are adopted by CONSOB proposal when the infringements regard provisions for which it supervises compliance[429].

2. The investment companies disciplined by this Chapter are not subject to article 56-bis.

Chapter II
Crisis procedures

Article 56
Special administration

1. The Bank of Italy, on its own initiative or on a proposal formulated by CONSOB within the sphere of its competence, may order the dissolution of the bodies which direct and control the investment companies, the asset management companies, the SICAVS [open-end investment companies] and the SICAFS [closed-end investment companies] when:

a) serious irregularities are found in the administration or serious breaches of the legislative, administrative or statutory provisions which discipline the activity, always if the action indicated by articles 55-quinquies or 56-bis, when applicable, are not sufficient to remedy the situation;

b) the company's capital has suffered serious losses;

c) winding up is requested with a reasoned request by the administrative bodies or by the extraordinary shareholders' meeting or by the commissioner appointed pursuant to article 7 sexies[430].

2. The measure provided for in paragraph 1 may also be adopted with respect to the Italian branches of non-EU investment companies other than banks and of non-EU AIFMs authorised in Italy. In this case the administrator and the oversight committee assume the powers of the company's administrative and control bodies with respect to such branches[431].

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, paragraphs 2, 3, 4 and 5, 71, 72, 73, 74, 75, 75-bis and 77-bis of the Consolidated Law on Banking are applicable, where such provisions shall be understood to refer to investors instead of depositors and to Italian investment companies, non-EU companies other than banks, asset management companies and to SICAVs, SICAFs and non-EU AIFMs authorised in Italy instead of banks; and the term "financial instruments" shall refer to financial instruments and cash[432].

3. The Bank of Italy shall be responsible for the conduct of the procedure and for all the related obligations. Articles 70, 2, 3, 4 and 5, 71, 72, 73, 74, 75, 75-bis and 77-bis of the Single Banking Act, as they are compatible, apply, as these are referred to investors in depositors, Sims, non-EU companies other than banks, savings management companies, Sicav, Sicaf and non-EU AIFM authorized in Italy in place of banks, and the term "financial instruments" referred to financial instruments and money.

4. Title IV of the Bankruptcy Law shall not apply to Italian investment companies or asset management companies or SICAVs and SICAFs[433].

4-bis. The procedure disciplined by this article is also applicable to the leading companies of investment company groups pursuant to article 11 and the other members of the group. Articles 98, 100, 102, 103, 104 and 105 of Italian Legislative Decree no. 385 of 1 September 1993 are applicable, the said provisions being understood as referring to investment companies instead of banks, and to the leading companies of groups pursuant to article 11 instead of the parent company. With reference to article 64 of Italian Legislative Decree no. 385 of 1 September 1993, contained in article 105 of Italian Legislative Decree no. 385 of 1 September 1993, it is understood that article 11 of this decree is implemented[434].

Article 56-bis [435]
Collective removal of the members of administrative and control bodies

1. The Bank of Italy after consulting CONSOB may order the removal of all members of bodies that administer and control SIMs, asset management companies and SICAVs and related parent company under the conditions specified in Article 56, paragraph 1, letter a). The provision is published in extract form in the Official Journal of the Italian Republic.[436]

2. The provision sets the date of removal of members of bodies. The Bank of Italy convenes the shareholders' meeting of the SIM, asset management company, SICAV or parent company with the renewal of the administrative and control bodies on the agenda.

3. The possibility remains of, at any time, having special administration in the cases provided for in Article 56, in the manner and with the effects laid down in this Title[437].

Article 57
Compulsory administrative liquidation

1. The Minister of the Economy and Finance,[438] 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, SICAVs and SICAFs, 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 serious. In the case of the investment companies indicated under article 55-bis, paragraph 1, liquidation is ordered in the case of the conditions indicated legislative decree 16 November 2015, no. 180, but that indicated under article 20 of the same decree for ordering the winding up does not exist[439].

2. Compulsory liquidation may be ordered in the manner provided for in paragraph 1 upon a reasoned request by the administrative bodies, the extraordinary shareholders' meeting, the provisional administrator appointed pursuant to article 7-sexies, the special administrators or the liquidators[440].

3. The Bank of Italy is responsible for directing the procedure and for fulfilling all the procedures connected to the same. As far as compatible, Article 80, paragraphs from 3 to 6, and Articles 81, 82, 83, 84, 85, 86 except for paragraphs 6 and 7, 87 paragraphs 2 and 3, 88, 89, 90, 91 except for paragraphs 1-bis and 11-bis, 92, 92-bis, 93, 94 and 97 of the Consolidated Law on Banking are applied, the above provisions being understood as referring to investment companies, asset management companies, SICAVS and SICAFS in place of banks, and the expression “financial instruments” is understood as referring to financial instruments and to cash. For the purposes of the application of Article 92-bis of the Consolidated Law on Banking to asset management companies, the provisions contained therein relative to customers entered in the separate section refer to funds or segments managed by the company[441].

3-bis. If the compulsory liquidation is arrange of an asset management company, the liquidators appointed with liquidate or dispose of the funds it manages and the related segments, to this end exercising the relevant administrative powers. Insofar as they are compatible, Articles 83, 86, with the exception of paragraphs 6 and 7, 87, paragraphs 2 and 3, 88, 89, 90, 91, with the exception of paragraphs 1-bis, 2, 3 and 11-bis, 92, 92-bis, 93 and 94 of the Consolidated Law on banking and paragraphs 4 and 5 of this Article shall apply. Investors in funds or segments have the exclusive right to the allocation of the net residue from liquidation proportionally to the respective investment shares held; from the date on which the compulsory administrative liquidation decree is issued, the functions of the fund bodies shall cease[442].

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 paragraph 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 and the SICAF 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 paragraph shall apply in the place of Articles 86(6) and 86(7) of the Consolidated Law on Banking[443].

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 paragraph 4, within fifteen days of receipt of the communication 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 paragraph 8 of such article. This paragraph shall apply in the place of Article 87(1) of the Consolidated Law on Banking[444].

6. If the compulsory administrative settlement regards a SICAV or a SICAF, 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[445].

6-bis. Should fund or segment activities not enable their obligations to be met and should there be no reasonable prospects that this situation will be overcome, one or more creditors or the asset management company may request the liquidation of the fund before the court of the place in which the asset management company has its registered office. The court, having consulted with the Bank of Italy and the legal representatives of the asset management company, where the risk of damages is considered grounded, orders the liquidation of the fund with sentenced resolved in the council chamber. In this event, the Bank of Italy shall appoint one or more liquidators who will order in accordance with the provisions of paragraph 3-bis; asset management companies or entities may also be appointed liquidators. The provision of the Bank of Italy is published in extract form in the Official Journal of the Italian Republic. Insofar as it is compatible, Article 84, with the exception of paragraphs 2 and 5, of the Consolidated Law on Banking shall apply to liquidators. If the asset management company managing the fund is subsequently subjected to compulsory administrative liquidation, the liquidators of the asset management company shall administer the fund on the basis of a situation of the accounts prepared by the fund’s liquidators. When the fund or the segment is without liquid resources or these are estimated by the liquidator as insufficient to satisfy the credits subject to pre-deduction before the closure of the liquidation, the liquidators pay, with priority in respect of all the other pre-deductible credits, the expenses necessary for the execution of the liquidation, the indemnities and expenses for fulfilling the liquidators' mandates, and the expenses for ascertaining the deficit, for maintaining and selling the assets, for the execution of the divisions and returns and for the closure of the liquidation itself, using first any liquid resources that may be available to the liquidation and then the sums made available by the asset management company which manages the fund or the segments, which sums will always be borne by the company itself. Article 92-bis, paragraphs 1, 2, 3, 4 and 5, of the Consolidated Law on Banking is not applied; paragraph 6 of the same article is applied if there is no prospects of profit from the sale of the assets of the fund or segment.

6-ter. The procedure disciplined by this article is also applicable to the leading companies of investment company groups pursuant to article 11 and the other members of the group. Articles 99, 101, 102, 103, 104 and 105 of Italian Legislative Decree no. 385 of 1 September 1993 are applicable, the said provisions being understood as referring to investment companies instead of banks, and to the leading companies of groups pursuant to article 11 instead of the parent company. With reference to article 64 of Italian Legislative Decree no. 385 of 1 September 1993, contained in article 105 of Italian Legislative Decree no. 385 of 1 September 1993, it is understood that article 11 of this decree is implemented[446].

Article 58 [447]
Branches in Italy of foreign investment companies and managers

1. In the case of the revocation of the authorisation for the business practice of a Community EU investment company, an EU management company, or an EU or non-EU AIFM authorised in a Member State of the EU other than Italy, on the part of the competent authority, the Italian branches may be subjected to enforced liquidation pursuant to the provisions of article 57, as far as compatible[448].

2. Italian branches of non-EU investment companies other than banks and of non-EU AIFMs authorised in Italy are subject to the provisions of article 57, as far as compatible[449].

Article 58-bis [450]
(Investment firms operating in the European Union) [451]

1. The recovery provisions and the liquidation procedures of investment companies indicated under article 55-bis, paragraph 1, and of EU investment companies which perform the activities indicated by the same article, are subject to the application of articles 95-bis, 95-ter, 95-quater, 95-quinquies and 95-septies of the Consolidated Law on Banking, the said provisions being understood as referring to investment companies and EU investment companies instead of banks[452].

2. For the purposes of paragraph 1:

a) the reference to article 79, paragraph 1, of the Consolidated Law on Banking contained in article 95-bis, paragraph 1-bis, of the same decree is understood as referring to article 7-quater, paragraph 1, of this decree[453];

b) the request referred to by article 95-quater, paragraph 2, of the Consolidated Law on Banking can be carried out subsequent to a CONSOB report in the case of the conditions contemplated by article 56, paragraph 1, letter a);

c) the Bank of Italy can issue provisions for the implementation of this article pursuant to article 95-sexies of the Consolidated Law on Banking.

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 Finance[454] after consulting the Bank of Italy and CONSOB[455] [456].

2. The Minister of the Economy and Finance,[457] after consulting the Bank of Italy and CONSOB, shall adopt a regulation on the organisation and operation of compensation systems.[458]

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 systems[459].

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, of EU management companies and EU and non-EU AIFMs authorised in an EU State other than Italy or EU 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[460]

2. Unless they are members of an equivalent foreign compensation system, branches of non-EU companies 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 companies operating in Italy belong can be considered equivalent to that provided by recognized compensation systems[461]

Article 60-bis [462]
Responsibilities of investment companies, asset management companies, SICAVs and SICAFs for administrative offences depending on crime[463]

1. Public prosecutors who enter an administrative offence involving an Italian investment company or management company or a SICAV or a SICAF 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[464].

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 a SICAV, or a SICAF 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 articles 7-ter, 7-quater, 7-quinquies, 7-sexies and Title IV, taking account of the nature of the sanction imposed and the primary aim of safeguarding stability and protecting the rights of investors[465].

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 and SICAFs. Neither shall Article 15 of Legislative Decree 231/2001 apply to such intermediaries[466].

5. This article shall apply to the Italian branches of EU investment companies and non-EU companies other than banks , of EU management companies, EU and non-EU AIFMs authorised in Italy and non-EU AIFMs authorised in an EU Member State other than Italy insofar as it is compatible[467].

Chapter II-bis[468]
Winding up of investment companies

Article 60-bis.1
Scope of application

1. This Chapter is applied to the investment companies indicated under article 55-bis, paragraph 1, and to the Italian branches of non-EU companies other than banks which perform the activities indicated by the same article, unless included within the scope of application of the legislative decree no. 180 of 16 November 2015[469].

2. The investment companies which fall within the scope of application contemplated by article 2 of legislative decree no. 18O of 16 November 2015 are equivalent to banks for the purposes of the application of the said decree[470]

3. In relation to what is disciplined by this Chapter, and also in derogation from articles 1, 2, 3, 4, 4-bis and 4-ter, articles 3, 4, 5 and 6 of legislative decree no. 18O of 16 November 2015 are applied as well as the definitions contained in article 1 of the same decree[471].

4. When reference is made in this Chapter to provisions of legislative decree no. 180 of 16 November 2015,, the provisions referring to banks are understood as referring to investment companies and those referring to the parent company are understood as referring to the company at the head of the group pursuant to article 11[472]

Article 60-bis.2
Winding up plans

1. The Bank of Italy, after consulting CONSOB for the aspects of its competence, prepares:

a) an individual winding up plan for each investment company not subject to surveillance on a consolidated basis as contemplated by article 7 of the decree [implementing Directive 2014/59/EU][473]; or

b) a winding up plan for the groups indicated by article 11, as contemplated by articles 8, 9 and 10 of the decree [implementing Directive 2014/59/EU][474].

2. The winding up plans are communicated to CONSOB.

3. Title III, Chapter I, of the decree [implementing Directive 2014/59/EU][475] and the provisions referred to therein are applied as far as applicable.

Article 60-bis.3
Winding-up possibility

1. The Bank of Italy assesses whether an investment company not belonging to a group can be wound up as contemplated by article 12 of the decree [implementing Directive 2014/59/EU][476] and by the provisions referred to therein.

2. The Bank of Italy assesses whether a group identified pursuant to article 11 can be wound up, when it is the authority for group winding up, in the cases and as contemplated by article 13 of the Decree [implementing Directive 2014/59/EU][477] and by the provisions referred to therein.

3. If, subsequent to the assessments carried out pursuant to paragraphs 1 and 2, substantial impediments are found against the winding-up of an investment company or a group, the Bank of Italy proceeds as contemplated by articles 14, 15 and 16 of the decree [implementing Directive 2014/59/EU][478], adopting, when opportune, the measures disciplined therein, after hearing CONSOB for the aspects of its competence.

Article 60-bis.4
Winding up and other crisis management procedures

1. Investment companies are subject to Titles IV and VI and to articles 99, 102, 103, 104 and 105 of the Decree [implementing Directive 2014/59/EU][479]. The provisions indicated under article 20 of the same legislative decree, which indicate the reduction or the conversion of shares, of other stakes and capital instruments, or the start-up of the enforced administrative winding up or liquidation are adopted after consulting CONSOB for the aspects of its competence.

2. For the purposes of paragraph 1, the references contained in the decree [implementing Directive 2014/59/EU][480] to the discipline on the purchase of qualified participation, extraordinary administration and enforced administrative liquidation contemplated by the Consolidated Act on Banking are understood as carried out under the corresponding provisions of this Legislative Decree.

PART III
REGULATION OF MARKETS
[481]

TITLE I[482]
COMMON PROVISIONS

Article 61
Definitions

1. This part gives the following definitions:

a) "Market making strategy": for the purposes of Articles 65-sexies and 67-ter, the strategy pursued by those carrying out algorithmic trading when, acting on own account as a member or participant of one or more trading venues, the strategy involves the issue of irrevocable and simultaneous purchase and sale, comparable and competitive prices relating to one or more financial instruments on a single trading venue or on several trading venues, with the result of providing regular and frequent liquidity to the market;

b) “Exchange-traded funds-ETF): UCIs with at least one particular category of shares or stakes traded for the full day in at least one trading venues, within the context of which one market-maker intervenes to ensure that the price of his or her shares or stakes in the trading venue has not deviated significantly from the respective net asset value nor, if it is the case from the indicative net asset value calculated in real time;

c) “certificates”: the tradable securities as defined in article 2, section 1, point 27), of (EU) regulation no. 600/2014;

d) “ structured financial instruments”: structured financial instruments as defined in article 2, section 1, point 28), of (EU) regulation no. 600/2014;

e) “wholesale trading venues”: state bonds or private and public debentures, other than state bonds, as well as of money market instruments and financial instruments derivatives on public bonds, on rates of interest and on foreign exchange that, on the basis of the rules adopted by the manager of the centre, exclusively allow trading between operators that use their own positions or , in the case of qualified parties, those in which the operator carries out orders of professional clients with their own positions;

f) “main operator”: the parties indicated in article 2, section 1, letter n), of (EU) regulation no. 236/2012, relative to short sales and some aspects of the derivative contracts the subject is which the hedging of risks of non-fulfilment of the issuer ( credit default swap);

g) “growth market for SMEs ”: a multilateral trading facility registered as a growth market for SMEs in conformance with article 69;

h) “small or medium-sized enterprise”: an enterprise defined by article 2, section 1, letter (f), of (EU) regulation 2017/1129.

Article 61-bis
Principles of regulation

1. The Bank of Italy and CONSOB exercise the regulatory powers provided for by in this part in the observance of the principles referred to in article 6, paragraph 01.

TITLE I–BIS[483]
RULES GOVERNING TRADING VENUES AND SYSTEMATIC INTERNALISATIONS

Chapter I
Purpose and recipients for supervision

Article 62
Supervision over trading venues

1. CONSOB supervises trading venues and, without prejudice to the powers and the attributions of CONSOB and the Bank of Italy pursuant to part II of this decree, the relative managers, ensuring for the purpose the transparency, the ordered conduct of the trading and the protection of the investors.

2. CONSOB makes sure that the regulation of the regulated market and the rules of the other trading venues, adopted by the relative managers, are suitable for ensuring the effective achievement of market transparency, the ordered conduct of the trading and the protection of the investors and may request the managers of the trading venues for the appropriate amendments suitable for eliminating the dysfunctions encountered.

3. In the case of need and urgency, CONSOB adopts the necessary provisions even taking the place of the operator of the regulated market, with relation to regulated markets and for the purpose indicated in paragraph 1.

4. The Provisions provided for by paragraph 3 may be adopted by the Chairman of CONSOB or by those who replace him in the case of his absence or inability to attend. These are immediately enforceable and are subject to the approval of the Commission that takes resolutions in the space of five days; the provisions lose their effect if not approved in this term.

Article 62-bis
Wholesale government securities trading venues and main operators

1. The Minister of the Economy and Finance, having consulted with the Bank of Italy and CONSOB, may by regulation establish specific requirements for the wholesale government securities trading venues and the relative managers, identifying further trading methods and/or types of operators admitted to said venues, as well as defining criteria for attributing the qualification of main operator to the parties operating on government securities trading venues.

Article 62-ter
Supervision over wholesale trading venues

1. Without prejudice to the competences and the powers of CONSOB pursuant to this decree, the Bank of Italy supervises the wholesale trading venues and, without prejudice to the powers and the attributions of CONSOB and of the Bank of Italy pursuant to part II of this decree, the relative managers, paying attention to the overall efficiency of the market and the ordered conduct of the trading.

2. The Bank of Italy ensures that the regulation of the regulated wholesale state bond market and the rules of the other wholesale state security trading venues, adopted by the relative managers, are suitable for ensuring correct and ordered trading and an efficient execution of the orders and may request the managers of the trading venues for the appropriate amendments suitable for eliminating the dysfunctions encountered.

3. In the case of need and urgency, the Bank of Italy adopts, with regard to the regulated markets and for the purpose indicated in paragraph 1, the provisions necessary, even replacing the operator of the regulated market.

4. The Bank of Italy and CONSOB, for the purpose of coordinating the exercise of their functions of supervising and of reducing the charges to the wholesale trading venues to the minimum, stipulate a protocol of understanding with as object the tasks of each of them and the methods of cooperation and exchange of information in the performance of their respective competences, even with reference to the operation in Italy of trading venues of other Member states that exchange state bonds wholesale, as well as the irregularities found and the provisions assumed in the exercising of supervision. The protocol of understanding is made public by the Bank of Italy and by CONSOB in the way they establish.

Article 62-quater
Supervision of the regulation and information of wholesale trading venues

1. The Bank of Italy with its own provision points up the obligations of information and communication of the managers of the wholesale state bond trading venues towards them, indicating also content, terms and methods of communication.

2. Per the wholesale trading venues of state bonds:

a) the regulatory powers provided for in the articles 64, paragraph 4; 64-bis, paragraph 6; 64-ter, paragraph 9; 65, paragraph 2; 65-quater, paragraph 5; 65-sexies, paragraph 7; 74, paragraph 2 and 76, paragraph 2, are exercised by CONSOB, in agreement with the Bank of Italy;

b) the attributions of CONSOB referred to in articles 64, paragraph 5; 64-quater, paras 1, 6, 7 and 9 and 64-quinquies, paragraph 1, are exercised by the Ministry of the Economy and Finance, having consulted with the Bank of Italy and CONSOB;

c) the attributions of CONSOB referred to in articles 64, paragraph 7; 64-bis, paras 5, 8 and 9; 64-ter, paragraph 7; 64-quinquies, paras 2, 4, 5 and 6; 65-sexies, paragraph 6; 67, paras 8 and 11 and 67-bis, paragraph 2, lie with the Bank of Italy; the right of access al book of Trade, pursuant to article 65-septies, paragraph 2, is attributed, as well as to CONSOB, to the Bank of Italy;

d) the information, communication and reporting provided for in articles 64-bis, paras 3 and 4; 64-ter, paragraph 8; 64-quater, paragraph 8; 65-bis, paragraph 3; 65-septies, paragraph 3; and 66-ter, paragraph 3, are transmitted to the Ministry of the Economy and Finance, the Bank of Italy and CONSOB;

e) the information and the communications provided for in the provisions included in the chapter II are transmitted to the Bank of Italy instead of CONSOB, with the exception of the communications provided for by article 65-septies, paras 4 and 5.

3. For the wholesale private and public debenture other than state bond trading venues, as well as of money market instruments and financial instruments derivatives on public securities, on rates of interest and on foreign exchange, the powers and the attributions referred to in articles 64, paras 4, 5 and 7; 64-bis, paras 5, 6, 8 and 9; 64-ter, paras 7 and 9; 64-quater, paras 1, 6, 7 and 9; 64-quinquies paragraph 1, 2, 4, 5 and 6; 65, paragraph 2; 65-quater, paragraph 5; 65-sexies, paragraph 7, are exercised by CONSOB, having consulted the Bank of Italy.

4. The Bank of Italy and CONSOB exchange the information and the communications acquired regarding the wholesale private and public debenture trading venues with each other including state bonds, as well as money market instruments and financial instruments derivatives on public securities, rates of interest and foreign exchange in accordance with the method established in the protocol of understanding referred to in article 62-ter, paragraph 4.

Article 62-quinquies
Supervision over compliance with directly applicable provisions of the European Union

1. CONSOB and the Bank of Italy supervise, each as per their competences, pursuant to this part, compliance with the provisions dictated by (EU) regulation no. 600/2014 as well as delegated acts, technical regulation and implementation regulations of the aforementioned regulation and of the directive 2014/65/EU.

Article 62-sexies
Supervision over energy and gas financial instrument trading venues

1. The provisions of this title are applied o the regulated markets for the Trade of financial instruments electricity and gas derivatives and companies that organise and manage said markets are applied, without prejudice to what is indicated in paras 2, 3, 4, 5 and 6.

2. The Provisions referred to in articles 62, paragraph 2; 64-bis, paras 5 and 8; 64-quater, paras 1, 2 and 6; 64-quinquies, paras 1 and 5; 67, paragraph 9; 70, paras 1 and 2; 90-quinquies, paragraph 2, letter b), and 90-sexies, paragraph 2, are adopted by CONSOB, in agreement with the electricity, gas and waterworks authorities.

3. The powers and the attributions of CONSOB provided for by article 67, paragraph 10, are exercised by CONSOB, having consulted the electricity, gas and waterworks authorities.

4. The electricity, gas and waterworks authorities exercise the powers provided for in this article according the general needs of stability, economic viability and ability to compete of the electricity and gas markets, as well as of the safety and efficient functioning of the national electricity and gas transport network.

5. In the exercise of the functions provided for by this article, CONSOB and the electricity, gas and waterworks authorities provide each other with help and work with each other partly through exchange of information, without conflicting with professional secrecy. CONSOB and the electricity, gas and waterworks authorities act in a coordinated manner, for this purpose stipulating appropriate protocols of understanding.

6. The electricity, gas and waterworks authorities inform the Ministry of Economic Development about the supervision carried out and irregularities encountered that may affect the functioning of the underlying physical markets of the products as well functioning of the national electricity and gas transport network.

Article 62-septies
Supervision of multilateral monetary deposit exchange in Euros

1. The Bank of Italy oversees the efficiency and proper functioning of the multilateral monetary deposit exchange systems in Euro, as well as the managers, and may request the appropriate amendments to the rules of the system suitable for eliminating the dysfunctions encountered.

2. The Bank of Italy, in the ways and under the terms it has, may request the communication, periodic or otherwise, of data, information, deeds and documents from the managers of the multilateral monetary deposit exchange systems in Euro and from the operators that participate in them. The Bank of Italy may carry out inspections at the same manager’s premises and request the exhibition of documents and the fulfilment of the deeds considered necessary. The same powers may be exercised with regard to other parties involved in the activities of the manager. To this end, the Bank of Italy may also hold personal auditions. The Bank of Italy may authorise the auditors of the accounts or experts to make checks at the manager’s premises; the relative costs are charged to the party inspected.

3. The Bank of Italy with its own provision specifies the managers information and communication obligations towards it , also indicating contents, terms and methods of communication.

4. The provisions dictated in this part for multilateral trading facilities are not applied to the swaps provided for by l paragraph 1.

Article 62-octies
Informative and investigatory powers

1. CONSOB and the Bank of Italy, within the context of their respective competences and in the pursuit of the purpose provided for in articles 62, paragraph 1, and 62-ter, paragraph 1, may:

a) request anyone to communicate data and information and transmit deeds and documents in the ways and under the terms they have established, even periodically;

b) conduct personal hearings with anyone who may be in possession of pertinent information;

c) request to the legal auditors or auditing firms of the trading venues to provide information.

2. In the case provided for in letter b) of paragraph 1, a report is drawn up of the data, information acquired and declarations made by the interested parties, who are asked to sign the report and have the right to have a copy of it.

3. CONSOB, within the context of its competences and in the pursuit of the purpose provided for by article 62, paragraph 1, may exercise the further powers provided for by article 187-octies with regard to anyone in accordance with the methods provided for therein.

4. For the purpose referred to in articles 62, paragraph 1, and 62-ter, paragraph 1, CONSOB and the Bank of Italy may with regard to the operators admitted to the trading venues, other than qualified parties, and distance investors, exercise the powers referred to in paragraph 1. In the case of distance investors, the competent authority of the member state of origin of the distance investor is informed.

Article 62-novies
Inspectional powers

1. Within the context of their respective competences and in the pursuit of the purpose provided for in articles 62, paragraph 1, and 62-ter, paragraph 1, CONSOB and the Bank of Italy may carry out inspections and request the exhibition of documents and fulfilment of the deeds considered necessary with regard to the managers of the trading venues and those to which the said managers have externalised essential or important operating functions and to their personnel. In the exercise of said powers by CONSOB paras 12 and 13 of article 187-octies are applied.

2. CONSOB may request the parties tasked with the legal auditing of the accounts of the regulated markets to provide information. When there are particular necessities and it is not possible act using its own resources, CONSOB may also authorise legal auditors or auditing firms to carry out checks or inspections on its behalf. The party authorised to carry out checks or inspections acts in the capacity of a public official.

3. The Bank of Italy may request the parties tasked with the legal auditing of the accounts of the wholesale state bond trading venues to provide information. When there are particular necessities and it is not possible act using its own resources, Bank of Italy may also authorise legal auditors or auditing firms to carry out checks or inspections on its behalf. The party authorised to carry out checks or inspections acts in the capacity of a public official.

4. For the purpose referred to in articles 62, paragraph 1, and 62-ter, paragraph 1, CONSOB and the Bank of Italy may, with regard to the operators admitted to the trading venues, other than qualified parties, and of the distance investors, exercise the respective powers referred to in paras 1, 2 and 3. In the case of distance investors, the competent authority of the member state of origin of the distance investor is informed.

5. In the cases provided for in this article, CONSOB draws up a report of the data, information acquired and declarations made by those involved, who are asked to sign the report and have the right to have a copy. The results of the inspections made by the Bank of Italy pursuant to this article are communicated in writing to the parties involved in the ways established by the Bank of Italy through its own provision.

Article 62-decies
(Powers of intervention)

1. For the purpose of ensuring compliance with the provisions of this part, CONSOB and the Bank of Italy, within the context of their respective competences and in the pursuit of the purposes provided for in articles 62, paragraph 1, and 62-ter, paragraph 1, may:

a) publish warnings to the public on the CONSOB or Bank of Italy websites;

b) instruct the managers of the trading venues not to make use, while carrying out their activities and for a period of no more than three years, of the professional labours of a subject where it might prejudice for the transparency, ordered conduct of trading, protection of the investors and the overall efficiency of the market;

c) order the removal of one or more corporate officers of the manager of a regulated market or, having consulted the other authority, of investment firms or the Italian bank that manages a multilateral trading facility or an organised trading facility, if by remaining in office is prejudicial to the pursuit of the purposes provided for in articles 62, paragraph 1 and 62-ter, paragraph 1; the removal is not order where there are the conditions to pronounce the fall pursuant to article 64-ter, unless there is an urgency to act;

d) the temporary or permanent ceasing of practices of or behaviour contrary to the provisions of this part against anyone including the operators, other than qualified parties, admitted to the trading venues, even as distance investors, order, even by way of precaution;

In the case of intervention with regard to distance investors, the competent authority of the member state of origin of the distance investor is informed.

2. In the case of need and urgency, CONSOB and the Bank of Italy may also adopt, within the context of their respective competences and in the pursuit of the purposes provided for in articles 62, paragraph 1, and 62-ter, paragraph 1, any measure suitable for the maintenance of ordered conditions of trade on the regulated markets, on multilateral trading facilities and on organised trading facilities.

Chapter II
The trading venues

Article 63
Multilateral Trading Facilities in financial instruments

1. Each multilateral trading facility in financial instruments operates as a regulated market, multilateral trading facility (MTF) or organised trade facility (OTF), in respect of the relative provisions of this part.

Section I
Authorisation of the regulated markets and operator requirements

Article 64
The activities of organisation and management of regulated markets

1. The activity of organisation and management of regulated markets of financial instruments is carried on by joint stock companies for or not for profit (operator of the regulated market).

2. The operator of the regulated market:

a) prepares the structure, provides the services of the market and establishes the payments due to it;

b) ensures and verifies compliance with the requirements of the regulated market provided for in this title;

c) orders the admission, exclusion and the suspension of the financial instruments from the listing and from the trading and operators from trading;

d) adopts all the deeds necessary for the ordered functioning of the regulated market;

e) adopts the provisions and deeds necessary for preventing and identifying insider trading and manipulation of the market;

f) under take any other tasks entrusted to it by the competent authority.

3. The operator of the regulated market exercises the rights that correspond with the regulated market and is responsible for guaranteeing the market managed meets, at the time of the authorisation and continuously, the requirements established by this part even if the carrying out of the essential operative functions is entrusted to other parties.

4. CONSOB, with a regulation:

a) specifies the connected and instrumental activities that may be carried out by the operator of the regulated market;

b) establishes the general organisational requirements of the operator of the regulated market;

c) adopts the implementing provisions of article 4-undecies[484].

5. CONSOB verifies that the statutory amendments of the managers of the regulated markets do not contrast with the requirements provided for by this chapter. The procedure for entering into the company register may not be started if this verification is not done.

6. The provisions of the part IV, title III, chapter II, section VI, with the exception of articles 157 and 158 are applied to the managers of the regulated markets.

7. The operator of the regulated market may manage a multilateral trading facility or an organised trading facility, after verifications by CONSOB that it complies with the pertinent provisions contained in the part III.

Article 64-bis
Obligations concerning those who exercise a significant influence over the management of the regulated market

1. Those who are in the position of directly or indirectly exercising significant influence over the management of the regulated market must respect the requirements of integrity established through the regulation of the Minister of the Economy and Finance, having consulted CONSOB and the Bank of Italy.

2. Acquisitions of stakes in the capital of the operator of the regulated market and the subsequent variations, made directly or indirectly, even by through subsidiary companies, trust companies or middleman, must be communicated by the purchasing party within twenty four hours to the market operator. In the case where the purchase means the possibility of the exercising of a significant influence, the purchaser transmits, also to the operator of the regulated market, the documentation certifying possession of the requirements specified pursuant to paragraph 1.

3. The managers of the regulated markets:

a) send CONSOB and make public the information on the ownership of the operator of the regulated market, and in particular the identity of the parties that are able to exercise a significant influence over its management and the size of their interests;

b) communicates to CONSOB and makes public any transfer of ownership that determines a change in the identity of those who exercise a significant influence over the functioning of the regulated market.

4. Anyone who, for any reason, directly or indirectly intends to buy or transfer an investment in the capital of the market operator that neither involves the control nor gives prior communication CONSOB.

5. CONSOB may oppose the change in the control framework within ninety days of the communication specified in paragraph 4 to when there are objective and demonstrable reasons to believe that said changes put at risk the healthy and prudent management of the of the market.

6. CONSOB disciplines with its regulation:

a) the criteria for the establishment of the cases and thresholds of investment that establish a significant influence pursuant to para1;

b) contents, terms and methods of the communications specified in paras 3 and 4;

c) contents, terms and methods of publication by the operator of the regulated market of the information relative to the investors in the capital and of every subsequent change in the identity of those who own an investment that entails the possibility of exercising a significant influence[485].

7. In the absence of the requirements of integrity or in the absence of the communications specified in paras 2 and 4, as well as in the case of opposition pursuant to para5, the voting right inherent in the shares exceeding the thresholds specified pursuant to para6, letter a), or to the investment purchased in infringement of the paras 4 and 5 may not be exercised.

8. In the case of non-compliance with the prohibition specified in paragraph 7, article 14, paragraph 6 is applied. The challenge may also be proposed by CONSOB within the period specified in article 14, paragraph 7.

9. CONSOB may lay down that the shares for which the voting right may not be exercised pursuant to paragraph 7 must be sold, fixing a term

Article 64-ter
Requirements of the corporate bodies of the operator of the regulated market

1. The entities that perform the functions of administration, direction and control in the operator of the regulated market must possess the requirements of integrity, professionalism and independence required by the Ministry of the Economy and Finance with its regulation, having consulted CONSOB and the Bank of Italy. With the same regulation, The Ministry of the Economy and Finance, after consulting CONSOB and the Bank of Italy, specifies the reasons that constitute the failure to comply with the requirements provided for in this article and that establish the temporary suspension or the loss of office.

2. The administrative body possesses adequate knowledge, competences and experience, has a composition such as to guarantee a sufficiently large addition of experience and the relative members devote enough time to the exercise of their functions.

3. The operator of the regulated market allocates human and financial resources that are adequate for the preparation and the training of the members of the administrative body.

4. The operators of significant regulated markets on the basis of their dimensions, internal organisation, and typology, reach and complexity of the activities, institute a committee for making appointments consisting of members of the administrative body that do not exercise executive functions with the operator of the regulated market involved.

5. The administrative body of a operator of the regulated market defines and monitors the application of corporate governance measures, also related to separation of the company functions and prevention of the conflicts of interest that guarantee healthy and prudent management and promote the integrity of the market. the administrative body monitors and periodically assesses the efficacy of the corporate governance measures of the operator of the regulated market and adopts suitable measures to remedy any shortcomings.

6. The parties that perform functions of administration and monitoring have adequate access to the information and the documents necessary to monitor and periodically assess the management’s decision making process.

7. The suspension or the loss of the corporate officers for the reasons specified in the regulation referred to in paragraph 1 are declared by the body belonged to within thirty days of the appointment or the knowledge of the cause that has occurred. For the parties that are not components of a body the declaration of the suspension or of the loss is made by the body that nominated it. In the case of inertia CONSOB will take the measures.

8. For the purposes of the verifications of the compliance with the requirements provided for in this article, the operator of the regulated market sends CONSOB the information relating to the corporate officers and the parties that effectively direct the activities and the transactions of the regulated market and of every subsequent change.

9. CONSOB, through its own regulation:

a) specifies the requirement provided for by i paras 2, 3 and 4, also regarding the number of tasks that the members of the administrative board can take on and the functions performed by the appointment committee;

b) establishes content, terms and methods of the communications specified by para 8[486].

Article 64-quater
Authorisation of the regulated markets

1. CONSOB issues the authorisation to operate in the capacity of regulated market to facilities that fulfil the previsions of this Title.

2. CONSOB creates a list of the regulated markets, making sure the relevant provisions of the European Union are complied with.

3. Authorisation is also subject to the ascertainment that:

a) The market operator complies with the requirements provided for in this title;

b) The regulation of the market complies with the government of the European Union and is suitable for ensuring the transparency of the market, the ordered conduct of the trading and the protection of the investors.

4. The regulation of the market establishes at least:

a) the conditions and the method of admission to the trading and exclusion from suspension by the trading of the operators;

b) the conditions and the methods of admission to the listing and trading and of exclusion and suspension from the listing and trading of financial instruments;

c) the conditions and the methods for the performance of the trading and any obligations of the operators and the issuers;

d) the method of ascertainment, publication and dissemination of the prices;

e) the types of contract admitted to the trading as well as the criteria for the establishment of the minimum quantities that can be traded;

f) the conditions and the methods for the offsetting and the regulation of the transactions concluded on the markets;

g) the methods of issuing the provisions of implementation of the regulation by the manager.

5. The regulation of the market is resolved by the ordinary shareholders’ meeting or by the surveillance council of the operator of the regulated market or, where it is so specified by the bylaws, the administrative body. If the shares of the operator of the regulated market are listed in a regulated market, the regulation of the market is resolved by the board of directors or by the management council of the said company.

6. CONSOB approves the amendments to the regulation of the regulated market.

7. Without prejudice to what is specified in paras 1 and 3, CONSOB also refuses authorisation if:

a) the parties that perform functions of administration, direction and control in the market operator do not respect requirements provided for by article 64-ter; or

b) there are objective and demonstrable reasons to believe that the administrative body of the market operator may jeopardise the effective, healthy and prudent management, and the integrity of the market.

8. The market operator provides CONSOB with all the information, including a program of activities that shows the type of activities provided for and the organisational structure necessary for checking that the regulated market has installed everything necessary for respecting the obligations established by this Title.

9. CONSOB pronounces the loss of authorisation issued to a regulated market when it does not use the authorisation within twelve months.

Article 64-quinquies
Revocation of the authorization, extraordinary provisions to protect the market and the crisis of the regulated market operator

1. CONSOB may revoke the authorisation of the regulated market when:

a) authorisation has been obtained by presenting false declarations or any other irregular means;

b) the conditions to which the Authorisation is subject no longer exist;

c) the provisions of this title relative to the regulated market or market manager have been infringed in a serious and systematic way;

d) it has ceased to function for more than six months or expressly forgoes the authorisation.

2. In the case of serious irregularities in the management of the regulated market or in the administration of the operator of the regulated market and anyway when the protection of the investors requires it, the Ministry of the Economy and Finance, at CONSO B’s proposal, orders the dissolution of the administrative bodies and the control of the market operator. The powers of the dissolved administrative bodies are attributed to a commissioner appointed with the same provision, that is exercised, based on the directives and under the control of CONSOB, up to the reconstitution of the bodies. The indemnity to which the commissioner is entitled is established by decree of the Ministry and is the responsibility of the operator of the regulated market. In as far as they are compatible, articles 70, paras 2, 3, 4 and 5, 72 with exception of paras 2, 2-bis and 8, and 75 of the consolidated banking law are applied, meaning the abovementioned provisions referring to CONSOB instead of the Bank of Italy, to the investors instead of the of the depositors and operator of the regulated market instead of the banks.

3. The procedure indicated al paragraph 2 may establish the revocation of the Authorisation specified in paragraph 1.

4. Within thirty days of the communication of the provision the revocation of the authorisation of the market, the administrators of the market operator or he commissioner appointed in paragraph 2 convene the assembly to amend the company purpose or to resolve the voluntary winding up of the market operator. If the convocation does not occur within this term or the meeting does not pass a resolution within three months of the communication of the provision of revocation, The Ministry of the Economy and Finance, at the proposal of CONSOB, may order the dissolution of the operator of the regulated market and appoint the receivers. The provisions regarding the liquidation of the joint stock company, referred to in book V, title V, chapter VIII, of the civil code, with the exception of those concerning the revocation of the receivers.

5. In the cases provided for in paras 1 and 2, CONSOB promotes the agreements necessary for ensuring the continuity of the trading. For this purpose it may order the temporary transfer of the management of the market to another manager, after the consent of the latter. The definitive transfer of the management of the market may also occur in derogation of the provisions of title II, chapter VI, of the bankruptcy law.

6. The initiatives for the declaration of bankruptcy or for the admission to the procedures of settlement with creditors or controlled receivership and the relative provisions of the court are communicated within three days to CONSOB by the registrar.

Section II
Organization and functioning of the trading venues

Article 65
Organisation requirements of the regulated markets

1. The regulated market orders:

a) measures to clearly identify and manage the potential negative consequences, for the functioning of the regulated market or for its members or investors, of any conflict among the interests of the regulated market, of the its owners or of the market operator and the its ordered functioning, in particular when said conflicts may be prejudicial for the performance of any function delegated to the regulated market by the competent authority;

b) procedures for managing the risks to which they are exposed, adequate devices and systems for identifying all the risks that may compromise its functioning and effective measures for lessening said risks;

c) measures to guarantee a healthy management of the technical operations of the system, including effective emergency measures to face up to the risks of system dysfunction;

d) transparent and non discretional rules and procedures that guarantee and order and proper trading process as well as objective criteria that allow the orders to be carried out properly;

e) effective measures for streamlining the efficient regulation of the transactions carried out within the context of their system;

f) financial resources sufficient for making its ordered functioning possible The functioning ordinate, bearing in mind the nature and entity of the transactions concluded in the market, as well as of the scope and degree of the risks to which it is exposed.

2. CONSOB may further detail, through its regulation, the organisational requirements of the regulated market and may dictate the methodology of establishing the entity of the financial resources specified in para1, letter f)[487].

3. Per the transactions concluded on a regulated market, the members and the investors are not required to mutually apply the obligations specifically indicated pursuant to article 6, paragraph 2. The members or the investors of a regulated market apply said obligations in as far as it concerns their clients when, while operating on behalf of the latter, orders are carried out on regulated market.

Article 65-bis
Requirements of the multilateral trading facilities and of the organised trading facilities

1. The operator of a multilateral trading facility or of an organised trading facility orders:

a) transparent rules and procedures that guarantee the correct and ordered trading process and as well as the objective criteria that allow the efficient execution of the orders;

b) measures to guarantee the sound management of the system’s operations, including effective emergency provisions for confronting the risks of system dysfunction;

c) measures suitable for promptly intervening and managing the potential negative consequences of the operation of the systems managed by it or for their members or investors and clients of any conflicts between the interests of the multilateral trading facility, the organised trading facility, their owners, the operator of the multilateral trading facility or the organised trading facility and the healthy functioning of the systems;

d) at least three members or investors or clients concretely active, each of who with the possibility of interacting with all the others over price formation.

2. The operator of a multilateral trading facility or of an organised trading facility also adopts the measures necessary to facilitate the efficient regulation of the transactions concluded in the multilateral trading facility or organised trade system and clearly informs the members or investors or clients of their respective responsibilities as far as the regulation of the transactions effected in the system are concerned.

3. The operator of a multilateral trading facility or of an organised trading facility provides CONSOB with:

a) a detailed description of the functioning of the system including, without prejudice to what is specified by article 65-quater, paras 2, 3 and 4, any links or the investment of a regulated market, a multilateral trading facility, an organised trading facility or a systematic internaliser owned by the said operator;

b) a list of the members, investors or clients.

Article 65-ter
Specific requirements for multilateral trading facilities

1. The operator of a multilateral trading facility, in addition to meeting the Requirements referred to in article 65-bis, orders of:

a) non discretionary rules for the execution of orders in the system;

b) procedures for managing the risks to which the system exposed, mechanisms and systems for identifying the risks that could jeopardise the functioning of the system and effective measures for lessening said risks;

c) sufficient financial resources for assuring the ordered functioning, having taken into account the type of transactions concluded on the market and the relative volumes, as well as of the scope and the degree of risk to which the system is exposed.

2. The obligations identified pursuant to article 6, paragraph 2, are not applied to the transactions concluded on the basis of the regulations that govern a multilateral trading facility between the members of the same or the its investors or between the multilateral trading facility and its members or investors in relation all use of the multilateral trading facility. The members of the multilateral trading facility or its investors comply with said obligations with regard to their clients when, on acting on their behalf, carry out their orders through the systems of a multilateral trading facility.

Article 65-quater
Specific requirements for organised trading facilities

1. Without prejudice to what is ordered by article 65-bis and in respect of the obligations identified pursuant to article 6, paragraph 2, letter b), number 2), in an organised trading facility the orders are carried out on a discretionary basis. The operator of an organised trading facility exercises its power of discretion when deciding whether:

a) place or withdraw an order on its facility; or

b) not to bundle the specific order of a client with the other orders available in the facility in a given moment, providing this happens in compliance with the specific instructions received by the client, as well as the obligations seen pursuant to article 6, paragraph 2, letter b), number 2).

1-bis. The operator of an organised trading facility that bundles the clients’ orders may decide whether, when and to what extent to bundle two or more orders in the system. Without prejudice to the compliance with what is specified in this article and by article 65-quinquies, the operator of an organised trading facility may make trading between clients easier, in such a way as to make two or more potentially compatible trading interests coincide in one operation.

2. The operator of an organised trading facility may not also operate as a systematic internaliser. An organised trading facility is not connected to a systematic internaliser in such a way as to allow the interaction between its orders and the orders or quotations in a systematic internaliser, nor is it connected with another organised trading facility in such a way as to allow the interaction between the orders of the different systems.

3. The operator of an organised trading facility may use an investment company to perform the activities market maker in such a system on an independent bias on the condition that there are no strict links with the said operator.

4. The operator of an organised trading facility establishes mechanisms for prevent clients’ orders in the system in direct exchange with the operator or with an entity of the same group as the operator.

5. CONSOB establishes through its regulation the information that an investment firm or an Italian bank or a operator of the regulated market can provide, to demonstrate compliance with the specific requirements dictated by this article, at the time of authorisation for the management of an organised trading facility or for the purposes of the verifications required by article 64, paragraph 7[488].

6. The relevant the obligations seen pursuant to article 6, paragraph 2 are applied to transactions concluded in an organised trading facility.

Article 65-quinquies
«Matched principal» trading

1. The operator of an organised trading facility may carry out «matched principal» trading only in the case where:

a) the client has consented to it; and

b) trading occurs on debentures, structured financial instruments, issue stakes and derivative instruments not belonging to a category of declared derivatives subject to the obligation of off-setting in conformance of the article 5 of (EU) regulation no. 648/2012.

2. The performance of «matched principal» trading must not generate conflicts of interest between the operator and its clients.

3. The operator of an organised trading facility may carry on trading in its own account other than «matched principal» trading with regard to sovereign debt securities without a liquid market.

4. For the purposes of paragraph 3, liquid market means the market of a financial instrument or a category of financial instruments in which there are sellers and buyers ready and available on a continuous basis, evaluated in conformance with the criteria listed below, having taken account of the specific market structures of the particular financial instrument or of the particular category of financial instruments:

a) the frequency and average sizes of the transactions in a set of market conditions, having taken into account the nature and life cycle of the products of the category of financial instruments;

b) the number and type of investors in the market, including the relationship between the investors in the market and the traded instruments in relation a given product;

c) the average dimensions of the differentials between the buying and selling, where available.

5. The operator of a regulated market or a multilateral trading facility may not carry out the orders in direct exchange in the system, nor carry out «matched principal» trading.

Article 65-sexies
Operational requirements of the trading venues

1. The regulated markets and the operators of a multilateral trading facility or of an organised trading facility have facilities, procedures and effective mechanisms for ensuring that the trading facilities:

a) are resilient and have a sufficient capacity for managing the peaks of volume of orders and messages;

b) are able to guarantee ordered trading in critical market conditions;

c) are fully tested to guarantee compliance with the conditions referred to in letters a) and b);

d) are subject to effective provisions related to operating continuity to guarantee the continuity of the services in the case of malfunctioning.

2. The regulated markets and the operators of a multilateral trading facility or a organised trading facility have effective facilities, procedures and mechanisms:

a) to guarantee that the algorithmic trading facilities used by the members investors or clients cannot create not contribute to creating abnormal trading conditions on the trading venue and for managing any abnormal trading condition caused by the same;

b) to identify, through the reporting of members or investors or clients, the orders generated through algorithmic trade, the different algorithms used for the creation of the orders and the corresponding people that initiate said orders;

c) to refuse orders that exceed pre-established price and volume limits or are clearly wrong;

d) to suspend or temporarily limit trading if a significant swing is detected in the price of a financial instrument in the managed market or in a market correlated in a short space of time;

e) in exceptional cases, to cancel, amend or correct any operation;

f) to check the orders inserted, including the cancellations and the transactions carried out by their members or investors or clients, to identify the infringements of the rules of the system, the abnormal trading conditions or the deeds that may indicate behaviour prohibited by (EU) regulation no. 596/2014 or the dysfunctions of the system in relation to a financial instrument.

3. The regulated markets and the operators of a multilateral trading facility or an organised trading facility sign binding written agreements with the members or investors or clients that pursue market making strategies on the system, and work until a sufficient number of parties adhere to said agreements, by virtue of which they are required to send irrevocable quotations at competitive prices, with the result of providing liquidity to the market on a regular and foreseeable basis, if this requisite is enough for the nature and sizes of the trading in the trading venues in question.

4. The regulated markets and the operators of a multilateral trading facility or of an organised trading facility have effective measures and procedures, including the necessary resources, for the regular checking of compliance with its rules.

5. The regulated markets and the operators of a multilateral trading facility or an organised trading facility:

a) synchronise, together with their members or investors or clients, the clocks use to record the date and time of the events that may be subject of trading;

b) adopt transparent, fair and non-discriminatory rules related to services of co-placement;

c) adopt a committee structure, including the transaction execution committees, the accessory commissions and transparent, fair and non-discriminatory reimbursements;

d) adopt facilities related to dimensions of the trading tick for shares, receipts of deposit, quoted exchange traded funds, certificates and other similar financial instruments.

6. CONSOB approves the agreements that the operator of a trading venue intends to conclude for the externalisation to third parties of all or part of the critical operating functions relative to the facilities of the centre it manages that allow algorithmic trading, critical operating functions meaning those indicated by article 65, paragraph 1, letters b), c) and e).

7. CONSOB specifies with its own regulation the specific operational requirements which the trading venues must equip themselves with concerning:

a) The minimum content of the written agreements required pursuant to para3 and the checking obligations of the operator of the trading venue regarding the same;

b) the facilities, the procedures and the devices related to algorithmic trading facilities provided for in l paragraph 2, letters a) and b);

c) the criteria on the basis of which to fix the parameters for the suspension of trading and the relative methods of management;

d) requirements per the direct electronic access to the trading venues;

e) the requirements of the structure of the commissions referred to in paragraph 5, letter c);

f) the parameters to calibrate the facilities relating to dimensions of the tick trading indicated in paragraph 5, letter d)[489].

8. The provisions referred to in paragraph 7, letter b), are adopted by CONSOB, having consulted the Bank of Italy, for multilateral trading facilities and the organised trading facilities that are managed by investment firms and Italian banks.

Article 65-septies
Informative and communication obligations

1. CONSOB, with its own regulation, specifies the information and communication obligations with regard to the operators of the trading venues, indicating their content, terms and methods of fulfilment[490].

2. The trading venues place at CONSOB’s disposal, if so requested, the data relative to the trade book, even through access to it.

3. Without prejudice to the obligations provided for by l paragraph 1, the operators of the trading venues tell CONSOB immediately of the significant infringements of the rules of the market or abnormal trading conditions or dysfunctions of the system in relation to a financial instrument, as well as the consequent measures taken.

4. The operators of the trading venues also immediately tell CONSOB of actions that may indicate prohibited behaviour pursuant to (EU) regulation no. 596/2014.

5. The operators of the trading venues tell CONSOB immediately of pertinent information for the investigations and enquiries into market abuses in the facilities managed, and offer full assistance in relation to market abuses committed in their facilities or through them.

6. The operators of the trading venues place at the public’s disposal at least once a year and free of charge, data relative to the type of transactions executed, including data concerning the price, the costs, speed and probability of the execution for the individual financial instruments.

Section III
Admission, suspension and exclusion of financial instruments from listing and trading

Article 66
General criteria for admission to the listing and trading

1. The regulated markets:

a) are equipped with clear and transparent rules concerning the admission of the financial instruments to the listing and to trading;

b) adopt and maintain effective mechanisms per checking that the issuer of the securities admitted to the trading in the regulated market comply with the obligations to which they are parties pursuant to the European Union law related to initial, continuous and specially issued information;

c) have mechanisms suitable for making it easier for their members and their investors to access the information published on the basis of European Union law.

2. The rules referred to in paragraph 1, letter a), ensure that the financial instruments admitted to trading a regulated market can be traded correctly be, in an orderly and efficient way and, in the case of securities, can be freely traded. In the case of derivative instruments, said rules ensure in particular that the characteristics of the derivative contract are compatible with an ordered process of formation of its price as well as with the effective regulation conditions.

3. The operators of a multilateral trading facility or of an organised trading facility:

a) institute transparent rules concerning the criteria for the determination of the financial instruments that may be traded within the context of their own system;

b) supply or ascertain that the public has access to enough information to allow their clients to make a judgement about investments, bearing in mind both the category of the clients and the types of instruments negotiated.

4. The trading venues are equipped with the mechanisms necessary for regularly checking compliance with the requirements for admission for financial instruments admitted to the listing and to trading.

5. A transferrable security, once admitted to trading in a regulated market and in compliance with the pertinent provisions of regulation 2017/1129/EU may be admitted to the trading, even without the consensus of the issuer, in other regulated markets, which inform the issuer thereof.

6. When a financial instrument that has been admitted to trading in a regulated market it is also traded in a multilateral trading facility or in an organised trading facility without the consent of the issuer, said issuer is not subject to any obligation regarding this system as far as it concerns the initial, continuous or specially issued financial information.

Article 66-bis
Conditions for listing of certain companies

1. The regulation of the regulated market may establish that the shares of parent companies, the assets of which are largely made up of direct or indirect stakes in one or more companies with shares quoted in regulated markets, are traded in a distinct segment of the market.

2. CONSOB establishes with its own regulation:

a) the criteria of accountancy transparency and the adequacy of the organisational structure and the system of the internal audit that subsidiary companies, incorporated and regulated by the law of states not belonging to the European Union, must comply with so that the shares of the parent company can be quoted in an Italian regulated market. The notion of control referred to in article 93 is applied;

b) the conditions which when present means the shares in subsidiary companies subjected to the activities of direction and coordination of other companies;

c) the criteria of transparency and the limits for admission to the listing on the Italian financial company stock market, the assets of which consist exclusively of stakes[491].

Article 66-ter
Provisions for the admission, suspension and exclusion of financial instruments from the listing and the trading adopted by the operator of the trading venues

1. Without prejudice to CONSOB’s power referred to in article 66-quater, paragraph 1, to request the suspension or the exclusion of a financial instrument from the trades, the operator of a trading venue may suspend or exclude the financial instruments that cease to comply with the rules of the system from trading, unless said suspension or exclusion risks causing significant damage to the interests of the investors or the ordered functioning of the market.

2. The operator of a trading venue that suspends or excludes financial instrument from the trading, also suspends or excludes the derivative financial instruments referred to in Annex I, Section C, points 4 to 10, relative or referring to said financial instrument, if necessary for supporting the purpose of the suspension or the exclusion of the underlying financial instrument.

3. The operator of a trading venue makes the decisions of admission to the listing and the trading public, as well as the suspension and exclusion from the listing and the trading, of financial instruments and communicates them immediately to CONSOB.

4. In the case of regulated markets, the execution of the decisions of admission to the listing of ordinary shares, debentures and of other financial instruments issued by parties other than member states of the European Union, by EU banks and companies with shares quoted in a regulated market, as well as the decisions to exclude shares from trading, is suspended until the term indicated in paragraph 6 has elapsed.

5. The suspension indicated in paragraph 4 does not apply in the case of admission to the listing of financial instruments under the system of exemption from the obligation to publish the prospectus or based on a prospectus for which Italy is a host member state as well as for the admission of supplementary batches of shares already admitted to the trading.

6. CONSOB:

a) may prohibit the enforcement of decisions for admission to the listing and exclusion from the trading referred to in paragraph 4, or order the revocation of decision to suspend the financial instruments from trading, within five open market days from the receipt of the communication referred to in paragraph 3 if, based on the information different from that assessed, pursuant to the regulation of the market, by the market managing the course of its discovery, considers the decision contrary to the purpose referred to in article 62, paragraph 1;

b) may request the operator of the regulated market to provide all the information that it considers useful for the purposes referred to in letter a).

Article 66-quater
Provisions of suspension and exclusion of financial instruments from trading at CONSOB’s initiative

1. CONSOB may suspend or exclude a financial instrument from trading or request that the operator of a trading venue do it. For this purpose CONSOB may request the said operator for all the information that it considers useful. For the wholesale state bond trading venues, the powers referred to in this paragraph are exercised by the Bank of Italy, that gives timely communication of the fact to CONSOB, for the purposes of the communications specified by paragraph 3.

2. In the case where a operator of a trading venue suspends or excludes a financial instrument from trading, pursuant to article 66-ter, paras 1 and 2, CONSOB orders that the other trading venues and the systematic internalisations that trade said financial instrument or the derivative financial instruments referred to in Annex I, Section C, points from 4 to 10, relative or referring to said financial instrument, also suspend or exclude said financial instrument or said derivative instruments from trading , if the suspension or the exclusion is due to presumed market abuses, a public purchase offer or to the failure to divulge inside information about the issuer or the financial instrument in infringement of articles 7 and 17 of (EU) regulation no. 596/2014, unless said suspension or exclusion could cause damage relevant to the interests of the investor or the ordered functioning of the market.

3. Unless this could cause damage to the interests of the investors or ordered functioning of the market, CONSOB orders the trading venues and systematic internalisations to suspend or exclude a financial instrument from trading in cases where said financial instrument has been the subject of a suspension or exclusion provision by competent authorities of other member states or a decision taken by competent authorities of other Member states in relation to the suspension and exclusion decisions adopted by the operators of the trading venues they supervise, if the suspension or the exclusion is due to presumed market abuse, a purchase offer or the failure to divulge inside information or the financial instrument in infringement of the articles 7 and 17 of (EU) regulation no. 596/2014.

4. If the suspension or the exclusion pursuant to paragraph 3 has to be ordered with regard to a wholesale public and private debenture other than state bond trading venue as well as money market instruments and derivative financial instruments on public securities, rates of interest and foreign exchange, CONSOB’s decision is adopted having consulted the Bank of Italy. If the suspension or the exclusion pursuant to paragraph 3 has to be ordered with reference to a wholesale state bond trading venue, the decision is adopted by the Bank of Italy; For this purpose, CONSOB informs the Bank of Italy of the decisions taken by the competent authorities of the other member states.

5. Paras 2, 3 and 4 are also applied in the case the suspension from the trading of a financial instrument or of the derivative financial instruments referred to in Annex I, Section C, points 4 to 10, relative or referring to said financial instrument.

6. The notification procedure referred to in this article also applies in the case where the decision of suspend or exclude Trade the financial instrument or the derivative financial instruments referred to in Annex I, Section C, points 4 to 10 relative or referring to said financial instrument is adopted by CONSOB pursuant to para1.

Article 66-quinquies
Trade of financial instruments issued by the operator of the regulated market

1. CONSOB orders the admission, the exclusion and the suspension from the listing and from the trading of the financial instruments issued by a market operator in a regulated market managed thereby.

2. CONSOB determines the amendments to make to the regulation of the regulated market to ensure the transparency, ordered conduct of the trading and protection of the investors, as well as to regulate the hypotheses of conflict interests. Admission to listing and Trading is subject to the adjustment to the regulation of the regulated market.

3. CONSOB oversees the respect of the provisions of the regulation of the market regarding the financial instruments referred to in paragraph 1by the operator of the market.

Section IV
Access to the trading venues

Article 67
General operator access criteria

1. The operator of a regulated market or a multilateral trading facility or an organised trading facility establishes, implements and maintains transparent and non discriminatory rules, based on objective criteria, that discipline access in the capacity of members or investors or clients.

2. Investment firms, Italian banks, EU Investment Companies, EU banks and the companies of non-EU countries authorised to provide trading services or activities on their own account or executing orders on behalf of the clients pursuant to articles 28 and 29-ter may access the regulated markets and multilateral trading facilities in the capacity of members or investors.

3. EU Investment companies, EU banks and companies of non-EU countries authorised to provide trading services or activities on their own account or executing orders on behalf of the clients pursuant to articles 28 and 29-ter may be admitted in the capacity of members or investors of the regulated markets or multilateral trading facilities established in Italy

in accordance with the following methods:

a) directly, by establishing a branch;

b) by becoming distance members or having distance access to the regulated market or multilateral trading facility, when the procedures and the trading facilities of the centre in question do not require a physical presence for the conclusion e of transactions.

4. the following may also access regulated markets and multilateral trading facilities, having regard to the rules adopted by the operator of the trading venue if:

a) they have a sufficiently good reputation;

b) they have a sufficient level of trading capacity, competence and experience;

c) they have adequate organisational devices;

d) they have sufficient resources for the role they have to perform, having regard to the various finance provisions that might be fixed by the regulated market to guarantee the adequate regulation of the transactions.

5. The operator of a regulated market or of a multilateral trading facility specifies, within the context of their rules specified by para1, criteria for the direct or distance investment in the regulated market and the obligations imposed on the members or investors deriving:

a) from the institution and management of the trading venue;

b) from provisions concerning transactions performed in the trading venue;

c) from professional standards imposed on the personnel of members or investors that operate on the trading venue;

d) from the conditions established, pursuant to paragraph 4, for members or investors other than investment firms, Italian banks, EU investment companies, EU banks and companies of non-EU countries authorised to exercise trading services or activities on their own account or in the execution of orders on behalf of the clients pursuant to the articles 28 and 29-ter;

e) from the regulations and procedures for the offsetting and regulation of transactions concluded in the regulated market.

6. The members or investors in the regulated markets and multilateral trading facilities and the clients of the organised trading facilities behave with diligence, honesty and transparency for the purpose of not compromising the integrity of the markets.

7. The Ministry of the Economy and Finance and the Bank of Italy are admitted to trading on the wholesale state bond trading venues.

8. The operator of a trading venue advises CONSOB of the Member state in which it intends to set up appropriate devices to facilitate access and trading for the members, investors or repose clients established there. CONSOB transmits said information to the member state in which it intends to set up said devices, within one month. At the request of the competent authority of the host member state, CONSOB gives timely communication of the identity of the members, investors or clients, the trading venue that has established its devices in the territory of the other member state.

9. The operator of a trading venue of another member state may equip itself with appropriate devices, in the Italy, to facilitate access and trading to its members, investors or distance clients established there, on the condition that CONSOB has received prior communication from the competent authority of the member state of origin of the trading venue. CONSOB may request the competent authority of the member state of origin to communicate the identity of the members, investors or clients of the trading venues that have their devices in Italy.

10. CONSOB, for the purpose of assuring transparency, ordered conduct of the trading and the protection of the investors, stipulates agreements with the supervisory authorities of the member state of origin of the trading venues of other Member states referred to in paragraph 9 that have acquired a substantial importance for the functioning of the Italian financial market and the protection of the investors in Italy, suitable for ensuring the coordination of supervision and the exchange of information on a cross-border bias . Said agreements are stipulated by CONSOB together with Bank of Italy, after information is given to the Ministry of the Economy and Finance, If the trading venues of other Member states have acquired a substantial importance for the functioning of the Italian financial market as well as for the ordered conduct of the trading and the overall efficiency of the wholesale state bond trading venues. The Ministry of the Economy and Finance may request the Bank of Italy to give the information acquired pursuant to the aforementioned agreements.

11. CONSOB also stipulates the cited agreements of cooperation with the supervisory authorities of the host member state of Italian trading venues that have acquired a substantial importance for the functioning of the financial market of said member state and the protection of the investors therein.

12. When there are clear and demonstrable reasons for believing that a regulated market, a multilateral trading facility or an organised trading facility that are equipped with devices in Italy, pursuant to paragraph 9, infringe the obligations deriving from the provisions of this part, CONSOB informs the competent authority of the member state of origin of the trading venue. If, however the measures adopted by the competent authority of the member state of origin or by way of the inadequacy of said measures, the trading venue continues to act in a way that clearly jeopardises the interests of the domestic investors or the good functioning of the markets, CONSOB, after informing the competent authority of the member state of origin, adopts all the measures adequate and necessary for protecting the investors and ensuring the good functioning of the markets, that include the possibility of preventing said trading venue from making their devices accessible to the members or distance investors established in Italy. The measures adopted pursuant to this paragraph, that include sanctions or restrictions of the activities of an investment company or of a regulated market are suitably justified and communicated to the investment company or the regulated market involved.

Article 67-bis
Admission, suspension and exclusion of operators from a regulated market

1. The operator of the regulated market immediately notifies CONSOB of its decisions concerning the admission, exclusion and suspension of operators from trading.

2. CONSOB may:

a) order the revocation of a decision suspending operators from trading, within five days of the receipt of the communication referred to in paragraph 1 if, based on information different from that evaluated, pursuant to the regulation of the market, by the operator of the regulated market during its investigation, it believes the decision to be against the purpose of ensuring transparency, the ordered conduct of the trading and the protection of the investors;

b) ask the operator of the regulated market for all the information that it considers useful for the purposes referred to in the letter a);

c) ask the operator of the regulated market for the exclusion or suspension of operators from trading.

Article 67-ter
 Algorithmic trading, direct electronic access, participation in central counterparties

1. The Investment firms and the Italian banks that perform algorithmic trade:

a) establish checks of the facilities and the effective risks and suitable in the light of the activities exercised on the trading venues, aimed at guaranteeing that the algorithmic trade facilities are resilient and have sufficient capacity, are subject to appropriate trading thresholds and limits, prevent wrong orders or anyway jeopardise the ordered conduct of the trading from being sent;

b) establish effective checks of the facilities and of risks in order to guarantee that the algorithmic trading facilities cannot be used for purposes that contradict (EU) regulation no. 596/2014 or the rules of the trading venue;

c) have effective operative continuity mechanisms to remedy malfunctions of the algorithmic trading facilities and take the steps necessary so that their facilities are subject to adequate verifications and monitoring to guarantee conformity with requirements of this paragraph.

2. The Investment firms and Italian banks that effect algorithmic trading notify it to CONSOB and, if different, to the competent authority of the member state of the trading venue in which the algorithmic trading is carried on as members or investors or clients of the trading venue. Notification is also given to the Bank of Italy for the wholesale state bond trading venues.

3. Without prejudice to the prudential supervision competence of the Bank of Italy, CONSOB supervise the compliance with the requirements provided for in this article by investment firms and Italian banks that perform algorithmic trading. To this end CONSOB may ask the above mentioned parties on a regular or ad hoc basis:

a) for a description of the nature of the algorithmic trading strategies;

b) for details about the trading parameters or limits to which the system is subject;

c) for the checks of conformity and risks carried out to ensure that the conditions established in paragraph 1 are met;

d) for the details about the verifications of the facilities;

e) for further information about the algorithmic trade carried out and the facilities used

4. CONSOB sends the Bank of Italy the information that it receives pursuant to paragraph 3 either from the competent authority of the member state of origin of the EU bank or the EU investment company, when said information refers to members or investors or clients that carry out algorithmic trading in wholesale state bond trading venues.

5. Investment firms and Italian banks may provide direct electronic access to a trading venue on condition that set up effective checks of the facilities and risk.

6. CONSOB, having consulted the Bank of Italy, governs with its regulation:

a) the registration obligations to which the parties referred to in paragraph 1 that set up algorithmic trade technique are liable;

b) the conditions on the basis of which the investment firms and the Italian banks may provide direct electronic access to the trading venue and the characteristics of the conformity and of risks checks carried out to ensure that the conditions established in paragraph 1 are satisfied;

c) Obligations of notification, information and registration for which investment firms and the Italian banks that provide direct electronic access to trading venue are liable;

d) Obligations of investment firms and Italian banks that carry on algorithmic trade to pursue market making strategies are liable[492].

7. CONSOB, at the request of the competent authority of the trading venue of another member state in which investment firms or an Italian bank performs algorithmic trade or provides direct electronic access, communicates in timely fashion to the same the information received pursuant to paragraph 3.

8. The provisions referred to in this article are also applied:

a) to the members or investors of regulated markets and multilateral trading facilities that are not required to be authorised pursuant to the article 4-terdecies, paragraph 1, letters a), e), g), i) and l) or that are operators of UCIs, Sicavs or Sicafs;

b) to the companies of non-EU countries authorised to provide trading services or activities on own account or by executing orders on behalf of the clients pursuant to articles 28 and 29-ter.

8-bis. CONSOB dictates with its regulation the requirements referred to in paragraph 6 applicable to parties referred to in paragraph 8 when they carry on algorithmic trade and/or provide direct electronic access to trading venues[493].

9. Investment firms and the Italian banks and the companies of non-EU countries authorised to carry out investment services and activities, with or without additional services, pursuant to the articles 28 and 29-ter, that act in the capacity of investors to central counterparties on behalf of their clients:

a) establish effective controls and facilities to guarantee that only people suitable can benefit from the offsetting services and that said people are subject to requirements appropriate for reducing the risks for investment firms or for the bank and for the market;

b) ensure that there is a binding written agreement between them and the person for whom they act with regard to the essential rights and obligations deriving from the provision of the service.

Section V
Position limits and controls over the management of the positions in derivatives on commodities

Article 68
Limits to the positions in derivatives on commodities

1. For the purpose of preventing abuses of the market and favour ordered conditions of price formation regulation of the transactions, CONSOB establishes and supervises the application of the position limits on the size of a net position that may be held by a persona at any moment for each derivative contract on commodities negotiated in trading venues, and economically equivalent contracts traded off the list (OTC), according to what is specified in its regulation, conforming with the calculation methodology determined by AESFEM[494].

2. CONSOB approves the requests for exemption from the application of the position limits laid down pursuant to paragraph 1, that may be presented by non-financial entities with reference to the positions of the same held, directly or indirectly, that have the objectively measurable capability of reducing the risks directly linked to the commercial activities of said non-financial entity.

3. CONSOB informs AESFEM of the position limits that it intends to establish for the purpose receiving the opinion of the authorities with regard to the compatibility of the position limits with the purpose expressed in paragraph 1 and with the calculation methodology determined by AESFEM. If necessary CONSOB amends the position limits in conformance with the opinion of the AESFEM or provides the latter with reasons why it does not believe it necessary to modify them, making public in timely fashion the reasons for these decisions on its website.

4. If large quantities of the same derivative instrument on commodities are traded at trading venues in several Member states, CONSOB, in the case where it is the competent authority of the centre in which the highest quality is traded (central competent authority) it is specified, according to what is with the regulation referred to in paragraph 1, the single limit position to be applied to all the trades relative to said derivative instrument on commodities contract. In this case CONSOB consults the competent authority of the other centres in which a large number of derivatives in question is traded, regarding the single position limit to be applied and any review of said limit.

5. Following the reception, by CONSOB, of the communication of a central competent authority, regarding the applicable position limits applicable to a derivative instrument on commodities contract traded for large quantities in trading venues subject to its supervision, CONSOB, in the case of dissent, shows in writing the complete and detailed reasons for which it does not consider the requirements outlined in paragraph 1 met.

6. CONSOB concludes cooperation agreements with the other competent authorities of the centres where the same derivative instrument on commodities is traded on a centre subject to its supervision, and with the competent authorities of the owners of positions in which the derivative instrument, for the purpose contemplates the reciprocal exchange of pertinent data and for the purpose verifies and enforces the limit of the single position.

7. In exceptional cases, CONSOB may impose more restrictive limits than those adopted pursuant to paragraph 1 that are duly justified and proportioned, taking into account the liquidity and ordered functioning of the specific market. The decision to impose more restrictive position limits is valid for a period that may not exceed six months starting from the date of the relative publication on CONSOB’s website and may be extended by six months in six months, if the reasons that led to the restriction continue to exist. In the absence of an express extension, once the period of six months has elapsed the more restrictive limits cease automatically.

8. On its website, CONSOB publishes the decisions adopted pursuant to para7, including information on the more restrictive position limits and communicates them to AESFEM, together with the reasons leading to the adoption of the said decisions so that these authorities can express themselves on the need for the more restrictive position limits in the light of the exceptional nature of the case. If CONSOB imposes limits in contrast with the opinion of AESFEM, it immediately publishes a communiqué on its website in which it explains the reasons which have led it to taking said decision.

Article 68-bis
Checks by the trading venues operator regarding positions in derivatives on commodities

1. The operator of a trading venue that trades derivatives on commodities is equipped with a system of controls on the management of the positions that include at least the power of the operator to:

a) check the open positions of the people;

b) obtain from the people access to the information, including all the relevant documentation, in relation to the extent and the of a position or exposure taken, information about actual or underlying owners, any concerted measure and any assets and liabilities in the underlying market;

c) imposing on a person to close or reduce a position temporarily or permanently according to the specific case and to unilaterally adopt the appropriate measures for closure or the reduction in the case where the person does not comply; and

d) if applicable, demand that the person put liquidity into the market again at an agreed price and in an agreed volume, with the explicit intent to attenuate the effects of a high or dominant position.

Article 68-ter
Characteristics of limits and checks on the management of the positions and information obligations

1. The position limits and the checks into the position management are transparent and non discriminatory, they specify how they are applied to people and take into account the nature and composition of the members and investors in market and the use that they make of the contracts presented at the trade.

2. The operator of the trading venue gives CONSOB detailed information about checks made on position management, in accordance with the methods and in the terms established by this with its regulation[495].

Article 68-quater
Notification of holders of positions by category

1. The operator of a trading venue in which commodity derivatives or issue quotas of or derivative instruments are traded on the same publishes a weekly report indicating the aggregate positions held by the different categories of people for the different financial instrument derivatives on commodities or issue quotas or derivative instruments on the same, traded on the trading venue, when either the number of people or their open positions exceed minimum thresholds, distinguishing among the positions identified as suitable for reducing the risks directly connected with the commercial activities and the other positions in an objectively measurable way. This relationship is transmitted to CONSOB and AESFEM.

2. Investment firms and Italian banks that trade derivatives on commodities or issue quotas or their derivative products outside a trading venue provide CONSOB or the competent central authority, if different from CONSOB, in the cases where the instruments mentioned are exchanged in more than one jurisdiction, the disaggregated data of their positions in derivatives on commodities or issue quotas or derivative instruments on the same traded in a trading venue and OTC contracts that are the equivalent in economical terms, distinguishing among the positions identified as suitable for reducing he risks directly connected with the commercial activities and the other positions in an objectively measurable way.

3. The members or investors in the regulated markets and the multilateral trading facilities and the clients of the organised trading facilities give the manager of the trading venue detailed information regarding their positions held through contracts traded in the trading venue in question, on at least a daily basis, including the positions of their clients, and the clients of said clients, until reaching the final client.

4. With its own regulation CONSOB provides for:

a) the times and ways by which the operator of the trading venue sends the disaggregated data inherent in the positions of all the people, including the members or investors and the relative clients in the trading venue;

b) the methods of classification, by operators of the trading venues, for the purposes of the information to be given pursuant to this article, the people that hold commodity derivative positions or issue quotas or derivative instruments of the same[496].

Article 68-quinquies
CONSOB’s powers and obligations to collaborate

1. In performing the supervisory tasks pursuant to this section, CONSOB exercises the powers provided for by articles 62-octies, 62-novies, 62-decies and may also:

a) ask anyone for information, information, data or the exhibition of documents, in the original or as a copy, regarding the extent and the purpose of a position or open exposure through a derivative instrument on commodities and any assets and liabilities in the underlying market;

b) limit the possibility of anyone to conclude a derivative contract on commodities, even by the introduction of limits on the extent of a position said person may hold at any time pursuant to the article 68;

c) ask anyone to adopt measures to reduce the extent of a position or exposure in derivatives on commodities.

2. CONSOB provides the competent authorities of the other Member states with information relative to:

a) any requests for a reduction of the extent of a position or exposure, pursuant to para1, letter c);

b) any limitations to the possibility of people to open a position in a derivative on commodities, pursuant to paragraph 1, letter b).

2-bis. The notification, if applicable, including detailed information regarding the request or application, pursuant to paragraph 1, letter a), including the identity of person or people to whom it has been addressed and the reasons adopted, as well as the scope of the limitations introduced pursuant to paragraph 1, letter b), including the person involved, the applicable financial instruments, any limits to the extent of the positions that any person may hold at any time, and exemptions granted pursuant to paragraph 2 and the reasons adopted. The notification is given at least twenty four hours before the planned coming into effect of the interventions or measures. In exceptional circumstances, the notification may given less than twenty four hours before the measure comes into effect if it is not possible to respect that term. If the measures adopted pursuant to paragraph 1, letters b) or c) are relative a wholesale energy products, CONSOB also informs the agency for collaboration among the national energy regulations instituted pursuant to (EC) regulation no. 713/2009. CONSOB also sends notification in compliance with this paragraph when it intends to adopt the measures referred to in letters b) and c) of paragraph 1.

3. CONSOB, following the reception of a notification by competent authorities in other member states, of measures to reduce the extent of a position or exposure or limitation to the possibility of people of opening a position in a derivative in commodities, may adopt measures in compliance with paragraph 1, letters b) or c), when said measures are necessary for achieving the aim of the competent authority of another member state that has sent the notification.

Section VI
SME growth markets

Article 69 [497]
SME growth markets

1. CONSOB, on application by the operator of a multilateral trading facility, registers a system as a SME growth market if the requirements referred to in paragraph 2 are met.

2. Without prejudice to compliance with the other obligations of this decree relative to the management of a multilateral trading facility, the multilateral trading facility puts in place rules, facilities and effective procedures, suitable for guaranteeing that the following conditions are met, for the purposes of the registration referred to in paragraph 1:

a) at least 50 percent of the issuers whose financial instruments are admitted to trading on the system are SMEs, either at the time of registration as SME growth market of later, with reference to each calendar year;

b) appropriate criteria are established for admission to trading in financial facilities on the system and remaining there;

c) at the time of admission to trading a financial instrument on the market sufficient information has been published to allow investors to make an informed choice regarding the investment. Said information may consist of an appropriate admission document or a prospectus of the requirements referred to in regulation 2017/1129/EU are applicable with regard to the public offer presented together with admission to trading the financial instrument on the multilateral trading facility;

d) on the market there is adequate periodic financial information, made available by the issuer or by someone else on its behalf, that includes at least the annual financial report subject to review;

e) the issuers, the parties who exercise responsibility for management and the parties closely associated with them, as specified respectively in 21), 25) and 26) of article 3, section 1, of (EU) regulation no. 596/2014, Comply with the requirements applicable to them dictated by the said regulation;

f) the regulated information concerning the issuers is kept and publicly disseminated;

g) there are effective facilities and checks aimed at preventing and showing up market abuses pursuant to the provisions of (EU) regulation no. 596/2014.

3. The operator of a SME growth market may provide for additional regulations over and above those provided for by l paragraph 2.

4. CONSOB may revoke the registration of a multilateral trading facility as a growth market for SMEs at the request of the operator or when the system does not comply with paragraph 2.

5. A financial instrument of an issuer admitted to trading on a growth market for SMEs may also be traded on another SME growth market only if the issuer has been informed beforehand and has not raised objections to the trading on another market. In this case the issuer is not subject to any obligation relative to the corporate governance or initial, continuous or ad hoc information with regard to this growth market for SMEs.

Section VII
Market recognition

Article 70
Market recognition

1. CONSOB, upon stipulating agreements with the corresponding authorities, may recognise extra-EU financial instrument market, for the purpose of extending their operation in Italy.

2. The operators of the regulated markets that intend to extend market operations that it manages to non EU States communicate the fact to CONSOB, that issues its clearance upon the stipulation of agreements with the corresponding authorities. For the regulated wholesale state bond markets communication is given to the Bank of Italy, that issues its clearance upon the stipulation of agreements with the competent foreign authorities and it informs CONSOB thereof.

3. In the cases referred to in paras 1 and 2, CONSOB or the Bank of Italy, according to their respective competences, check that the information regarding the financial instruments and the issuers, the methods of price formation, the methods of liquidation of the contracts, the regulations of supervision over markets and over intermediaries are equivalent to those provided for in the regulations currently in force in Italy with reference to the regulated markets, and anyway able to ensure adequate protection of the investors.

4. CONSOB may specify, with regulation, the methods and the conditions to recognise extra-EU financial instrument markets.

Chapter III
Systematic internalisations

Article 71
Obligations of the systematic internaliser

1. The investment company that exceeds the limits established in the delegated regulation (EU) 2017/565, in relation to the frequent, systematic and substantial method for the the application of the systematic internalisation system or that anyway chooses to subject itself to that system informs CONSOB of the fact.

2. For the purposes of the verification for remaining of the characteristics required by the definition of systematic internaliser, CONSOB may request the systematic internalisations, in the ways and under the terms it has established to provide it with the communication periodic and otherwise of data, information, deeds and documents.

3. Article 65-septies, paragraph 6 applies to the systematic internalisations.

Chapter IV
Obligations of trading, transparency and signaling transactions in financial instruments

Article 72
Determination of the competent authority

1. The Ministry of The Economy and Finance, CONSOB and the Bank of Italy are the national authorities competent pursuant to article 2, section 1, point 18), of (EU) regulation no. 600/2014, pursuant to what is provided for under this Chapter.

Article 73
Supervision

1. CONSOB supervises compliance with the provisions referred to in the Titles II, III and IV of (EU) regulation no. 600/2014, the trading obligations provided for by the articles 23 and 28 of (EU) regulation no. 600/2014, as well as non discriminatory access to the references indices and with reference to granting a licence for the same, according to what is specified by article 37 of the same regulation, as well as with reference to the compliance with the associated technical regulation and implementation regulations. To this end use is made of the powers provided for by the articles 62-octies, 62-novies and 62-decies.

Article 74
Exemptions from the pre-trade transparency requirements of trading venues

1. Without prejudice to what is specified in paragraph 4 and in conformance what is specified by articles 4, section 1, and 9, sections 1 and 2, of (EU) regulation no. 600/2014, CONSOB may exempt the operator of a trading venue from the obligations of publishing the pre-trade information pre-Trade established by articles 3 and 8 of the cited regulation as well as revoking the exemptions granted.

2. CONSOB governs through its own regulation the content and the methods for presenting the application for exemption by the operator of a trading venue[498].

3. CONSOB adopts the Provisions of suspension of exemptions granted, pursuant to article 5, sections 2 and 3, of the regulation indicated in the first paragraph.

4. The provisions for exemption from the pre-trade transparency obligations are adopted by CONSOB, in agreement with the Bank of Italy, with regard to the operators of the wholesale state bond trading venues. Said provisions are adopted by CONSOB, having consulted the Bank of Italy, with regard to the operators of the wholesale public and private debenture other than state bond trading venues, as well as securities normally traded on the money market and derivative financial instruments on public bonds, on rates of interest and on foreign exchange.

5. The Ministry of the Economy and Finance and the Bank of Italy are informed by CONSOB of the applications for exemption from the pre-trade transparency obligations on state bonds received, as well as the adoption of the provisions of exemption from the pre-trade transparency obligations concerning state bonds.

Article 75
Provisions of temporary suspension of the pre-trade transparency obligations

1. When the conditions specified by article 9, section 4, of (EU) regulation no. 600/2014 occur CONSOB adopts provisions for the temporary suspension of obligations to publish the pre-Trade information established in article 8 of the cited regulation, for financial instruments not representing capital.

2. Provisions referred to in paragraph 1 are adopted by the Ministry of the Economy and Finance, at the proposal of the Bank of Italy in agreement with CONSOB, relative to the obligations of publication concerning the state bonds. The same provisions are adopted by CONSOB, having consulted the Bank of Italy, relative to obligations of publication concerning the public and private debentures other than state bonds, as well as the securities normally traded on the money market and the derivative financial instruments on public securities, rates of interest and foreign exchange.

Article 76
Deferred publishing permissions

1. Without prejudice to what is specified in paragraph 3 and in conformance with what is specified in articles 7, 11, 20 and 21 of (EU) regulation no. 600/2014, CONSOB has the power to:

a) authorise the operator of a trading venue or an investment company that concludes, also as systematic internaliser, on its own account or on account of the clients, transactions in financial instruments, to defer the publication of the information post-Trade on transactions, established by articles 6 and 10 of the cited regulation;

b) apply the measures specified by article 11, section 3, of the said regulation;

c) revoke the authorisation granted pursuant to this paragraph.

2. CONSOB governs through its own regulation the content and the methods of presenting the application for authorisation to defer the publication[499].

3. The provisions of authorisation for deferred publication of the information post-Trade are adopted by CONSOB, in agreement with the Bank of Italy, with regard to the operators of the wholesale state bond trading venues. The same provisions are adopted by CONSOB, having consulted the Bank of Italy, with relation to the operators of the wholesale private and public debenture other than state bond trading venues, as well as securities normally traded on money markets and derivative financial instruments on public securities, rates of interest and foreign exchange.

4. The Ministry of the Economy and Finance and the Bank of Italy are informed by CONSOB of the application for authorisation for deferred publication of information post-Trade on transactions in state bonds received, as well as the adoption of provisions for the authorisation for deferred publication of the information post-Trade concerning state bonds.

Article 77
Provisions of temporary suspension of the obligations of transparency post-trade

1. When the conditions specified by article 11, section 2, of (EU) regulation no. 600/2014 occur CONSOB adopts the provisions of temporary suspension of the obligations to publish information post-Trade established by article 10 of the cited regulation, for financial instruments not representing capital.

2. The provisions referred to in paragraph 1 are adopted by the Ministry of the Economy and Finance, at the proposal of the Bank of Italy in agreement with CONSOB, relative to the obligations of publication of the information post-trade concerning state bonds. The same provisions are adopted by CONSOB, having consulted the Bank of Italy, relative to the obligations governing the publication of the information post-trade concerning the private and public debentures other than state bonds as well as the securities normally traded on the money market and the derivative financial instruments on public securities, rates of interest and foreign exchange.

Article 78
Information to be provided for the transparency and performance of other calculations and publication obligations

1. For the purposes of the application of the requirements of transparency pre and post-Trade required under articles 3 to 11 and 14 to 21 of (EU) regulation no. 600/2014 and the implementation of the regime specified by article 32 of the same regulation in connection with the trading of derivative instruments obligation, as well as to establish whether an investment company is a systematic internaliser, CONSOB, with the methods and the terms it has established through its regulation, may request information:

a) from trading venues;

b) from the authorised publication devices; and

c) from the providers of a consolidated publication system.

2. Publication obligations imposed by the provisions contained in titles II and III of (EU) regulation no. 600/2014 and by the associated technical regulation and implementation regulations are carried out by CONSOB through the making data and information available on its website.

3. The information necessary for carrying out the functions assigned to the Bank of Italy under this Chapter, obtained pursuant to paragraph 1, are transmitted by CONSOB to the Bank of Italy in accordance with the content, the methods and times established in the protocol of understanding specified by article 62-ter, paragraph 4.

TITLE I-TER[500]
DATA COMMUNICATION SERVICES

Article 79
Determination of the competent authority

1. The provision of data communication services is subject to CONSOB’S prior authorisation.

2. CONSOB supervises data communication service providers and regularly checks that they respect the provisions contained in this title. To said end CONSOB exercises the powers provided for by the articles 62-octies, 62-novies and 62-decies, paragraph 1, letters a), b) and d).

Article 79-bis
Authorisation and revocation

1. Authorisation is granted on condition that the applicant satisfies all the requirements deriving from this Title. The operator of a trading venue may manage the data communication services after verifying that it complies with the provisions of this Title. The service is included in the authorisation of the operator of the trading venue.

2. Without prejudice to what is specified by paragraph 1, CONSOB also refuses authorisation if it considers the parties actually directing the activities data communication services provider do not possess the requirements of integrity and professionalism or where there are objective and demonstrable reasons to believe that they are capable of jeopardising the sound and prudent management and do not allow the adequate account to be taken of the interests of the clients and of the soundness of the market.

3. The data communication services provider provides all the information, including a programme of activities that includes the types of service provided and the organisational structure, necessary to permit CONSOB to make sure said provider adopted all the measures to fulfil the obligations deriving from the provisions of this title, at the time of the initial authorisation.

4. CONSOB governs through its own regulation the content and the method of presenting the authorisation application and records the parties authorised for data communication services in a register that the public can access and is updated regularly[501].

5. The authorisation specifies the services that the data communication service providers are authorised to provide. An authorised party that intends to expand its business by adding other data communication services presents an application for the extension of the authorisation.

6. The authorisation issued pursuant to this article is valid throughout the European Union.

7. CONSOB pronounces the loss of authorisation issued to a data communication services provider when it has not made use of the authorisation within twelve months.

8. CONSOB may revoke the authorisation specified in para1 when:

a) The data communication services provider has obtained authorisation by presenting false declarations or by any other irregular means;

b) The data communication services provider no longer meets the conditions to which the authorisation is subject;

c) The data communication services provider has infringed provisions of this title in a serious and systematic manner;

d) The data communication service is interrupted by more than six months or the provider expressly forgoes the authorisation.

Article 79-ter
Requirements for subjects performing administrative functions at the data communication service provider

1. The members of the data communication services provider’s administrative body meet the requirements of integrity, professionalism and independence, they have adequate knowledge, skills and experience adequate and devote sufficient time to the performance of their duties.

2. If a market operator asks for authorisation for managing an APA, a CTP or an ARM and the parties that perform functions of administration, direction and management in the APA, CTP or ARM are the same as those that perform the same functions in the regulated market, said parties are required to comply with the requirements provided for al paragraph 1.

3. The administrative body of a data communication services provider:

a) has collectively knowledge, skill and experience adequate for being able to understand the activities of the data communication services provider;

b) defines devices of corporate governance that guarantee effective and prudent management, including the organisational separation of the corporate functions and the prevention of conflicts of interests, in such a way as to promote the soundness of the market and the interests of its clients.

4. CONSOB, through its own regulation:

a) specifies the requirements of the data communication services supplier’s administrative body and relative members, provided for by l paragraph 1;

b) establishes content, terms and methods of communication of information to CONSOB by the data communication services provider relative to parties that perform functions of administration, management and control and to the parties that actually direct the activities and operations of the service and every subsequent change[502].

Article 79-ter.1
Organisational requirements of the data communication service providers

1. The data communication service providers have, at the moment of authorisation and continuatively:

a) effective devices for the purpose of avoiding conflicts of interest with the clients. In particular, an APA or an ARM that also operates a operator of the regulated market or as investment company or a operator of the regulated market or an APA that also manages a CTP deals with all the information gathered in a non discriminatory way and applies and maintains adequate devices for keeping the different areas of activity separate;

b) adequate resources and back-up devices for the purpose can offer and maintain its services at any time.

2. CONSOB dictates through its regulation:

a) the specific organisational arrangements of the publication mechanisms (APA), the consolidated publication systems (CTP) and the reporting mechanisms (ARM);

b) the minimum elements that the information made public by APA and information consolidated by the CTP must report;

c) the implementing provisions of the article 4-undecies[503].

3. If a trading venue reports transactions in financial instruments on behalf of an investment company, pursuant to what is specified in article 26 of (EU) regulation no. 600/2014, it complies with the provisions specified in paragraph 1, letter b), as well as the provisions issued by CONSOB pursuant to paragraph 2, letter a).

TITLE II[504]
REGULATION OF CENTRAL COUNTERPARTIES[505]

Article 79-quater
Definitions

…omissis… [506]

Chapter I[507]
Central counterparties

Article 79-quinquies
Identification of the national competent authorities with regard to central counterparties

1. The Bank of Italy and CONSOB are the competent authorities for the authorisation and supervision of the central counterparties, pursuant to Article 22, sub-section 1, of Regulation (EU) no. 648/2012, pursuant to the provisions of the following paragraphs and of Article 79-sexies.

2. CONSOB is the competent authority, pursuant to article 22, sub-section 1, of the regulation referred to in paragraph 1, for the coordination of the cooperation and of the exchange of information with the European Commission, the European Securities and Markets Authority (ESMA), the competent authorities of the other Member States, the European Banking Authority (EBA) and the relevant members of the European system of central banks, pursuant to articles 23, 24, 83 and 84 of the regulation referred to in paragraph 1.

3. The Bank of Italy establishes, manages and controls the authorisation board contemplated by Article 18 of the regulation referred to under paragraph 1.

4. The Bank of Italy and the competent authority pursuant to Article 25, sub-section 3, letter a), of the regulation referred to under paragraph 1, within the sphere of the procedure for the recognition of the central counterparties of third countries. The Bank of Italy, in accordance with CONSOB, transmits the opinion to the ESMA.

Article 79-sexies [508]
Authorisation and supervision of central counterparties

1. The Bank of Italy authorises the performance of the clearance services in the capacity of central counterparty on the part of legal entities established in Italy, pursuant to articles 14 and 15 and according to the procedure contemplated by article 17 of Regulation (EU) no. 648/2012. The same authority revokes the authorisation to perform services on the part of a central counterparty in the case of the conditions indicated in article 20 of the said regulation. Article 79-octiesdecies and Article 79-vicies are applied.

2. The Bank of Italy, in the capacity of chairperson of the authorisation board contemplated by Article 18 of the regulation referred to under paragraph 1, can submit the question for the adoption of a common negative opinion on the authorisation of a central counterparty to the ESMA, as contemplated under Article 17, sub-section 4, of the same regulation, interrupting the terms of the authorisation procedure.

3. The supervision of the central counterparties is exercised by the Bank of Italy, taking into account the stability and the containment of the systemic risk, transparency and investor protection. For this purpose the Bank of Italy and CONSOB, within the sphere of their respective duties and powers, can, in respect of the central counterparts and participants:

a) request the communication, including regular data and information and the transmission of records and documents, in the manner and within the time limits set out by it;

b) hold personal hearings;

c) carry out inspections;

d) request the exhibition of documents and the execution of deeds deemed necessary.

In the case contemplated under letter b) of this paragraph, the Bank of Italy and CONSOB draw up a report on the data, the information acquired and the statements rendered by the subjects concerned, who are invited to sign the report and who are entitled to receive copy of the same. CONSOB draws up the report also in the case contemplated by letter c) of this paragraph. The procedures for the exercise of the information supervisory powers are disciplined by regulations adopted by the Bank of Italy, in accordance with CONSOB; under the same regulations, additional requisites may be established for the execution of the central counterparty's services, pursuant to the regulation referred to under paragraph 1. The Bank of Italy and CONSOB, within the sphere of their respective duties and powers and in pursuit of the purposes contemplated by this paragraph, may oblige the counterparty to adopt the actions and measures necessary to assure respect for the regulation contemplated under paragraph 1, of the relative delegated deeds, of the technical regulation and implementation provisions, and this title.

4. In the case of need and urgency, the Bank of Italy, for the purposes indicated under paragraph 3, adopts the necessary provisions, also substituting the central counterparty. The Bank of Italy immediately informs CONSOB, the ESMA, the authorisation board referred to under paragraph 2, the relevant authorities of the European Central Banks System and the other authorities concerned of the provisions adopted, pursuant to Article 24 of the regulation referred to under paragraph 1.

5. The Bank of Italy exercises the powers and duties specifically indicated under Articles 41, sub-section 2, 49, sub-sections 1, and 54, sub-section 1, of the regulation referred to under paragraph 1 and adopts, in accordance with CONSOB, the provisions required pursuant to Articles 31, sub-sections 1 and 2, and 35, sub-section 1, of the same regulation.

6. Pursuant to Article 32, sub-section 4, of the regulation referred to under paragraph 1, the Bank of Italy and CONSOB identify and disclose the information necessary to carry out the assessment contemplated by the same article.

7. The Ministry of Economy and Finance, after consulting the Bank of Italy and CONSOB, determines by regulation the requisites of integrity, professional skill and independence of the subjects who perform the duties of administration, governance and control in the central counterparty, in accordance with the provisions of Article 13. The lack of the requirements shall result in disqualification from office. It is declared by the board of directors, the supervisory board or the management board within thirty days of the appointment or knowledge of the supervening defect. In the case of lack of action, disqualification is pronounced by the Bank of Italy or CONSOB.".

8. The regulation required by paragraph 7 shall establish the grounds for the temporary suspension from office and its duration. Paragraph 7, sentences three and four, apply.

9. In the case of violation of the provisions contemplated by Article 31 of the regulation referred to under paragraph 1 for the transfer of qualified shareholdings in the central counterparties, the voting rights inherent to the equity held cannot be exercised.

10. In case of non-compliance with the prohibition pursuant to the preceding paragraph, the resolution or diverse measure adopted by the vote or, in any case, the determining contribution of the shareholdings referred to under the sane paragraph, may be challenged under the provisions of the Italian Civil Code. The shares for which the voting right cannot be exercised are counted for the purposes of the regular constitution of the related shareholders' meeting.

11. The challenge may also be initiated by the Bank of Italy or CONSOB within one hundred and eighty days of the date of the resolution or, if this is subject to registration in the companies register, within one hundred eighty days of registration or, if it is subject only to filing at the companies register office, within one hundred and eighty days of the date of this.

11-bis. The Bank of Italy may adopt the provisions of article 4-undecies, paragraph 4 in agreement with CONSOB[509].

12. Unless otherwise specified by this decree, the powers contemplated by the regulation referred to under paragraph 1 on the supervision of central counterparties are exercised by the Bank of Italy and CONSOB, each within the sphere of its own competence.

13. The Bank of Italy and CONSOB, by a memorandum of understanding, establish the cooperation procedures for the performance of their respective duties, with particular reference to the positions represented within the sphere of the boards and for the management of emergency situations, as well as the procedures for the reciprocal exchange of relevant information, also regarding the irregularities reported and the provisions adopted in the exercise of their respective functions, taking into account the need to reduce to a minimum the charges bearing on the operators and the economics of the action of the supervisory authority. The memorandum of understanding is rendered public by the Bank of Italy and CONSOB in the manner established by the same.

Article 79-septies
Guarantees acquired in the performance of the central counterparty's activity and prevalence of the provisions on the segregation and portability of the positions and of the customers' guarantees

1. The margins and the other performances acquired by a central counterparty as guarantee for fulfilment of the obligations deriving from the clearance activity carried out in favour of its own participants cannot be subject to executive or precautionary actions on the part of the creditors of the single participants or of the subject which manages the central counterparty, also in the case of the opening of insolvency procedures. The guarantees acquired may be used only as contemplated by Regulation (EU) no. 648/2012. The opening of an insolvency procedure against a participant does not prejudice the adoption and effectiveness of the measures contemplated under Article 48 of the aforesaid regulation by the central counterparty, in compliance with the same article, aimed at the management of the positions of the insolvent participant and in pursuit of the portability of the same or the return of the latter to the customers, as contemplated by the aforesaid regulation. Such measures cannot be declared ineffective in virtue of the application of other legal provisions.

2. In the case of the opening of an insolvency procedure against an Italian participant of a central counterparty authorised pursuant to the regulation referred to under paragraph 1 but established in another Member State, the enforceability against the procedure of the measures adopted by the central counterparty pursuant to article 48 of the regulation referred to under paragraph 1 is disciplined by the law which regulates the system, pursuant to Article 7 of Italian Legislative Decree no. 210 of 12 April 2001.

3. In the case of the opening of an insolvency procedure against an Italian participant of a central counterparty established in a third country but recognised pursuant to Regulation (EU) no. 648/2012, the protective measures contemplated under paragraph 1 apply.

Chapter II[510]
Competent national authorities for the exercise of additional supervisory powers

Article 79-octies
Identification of the competent national authorities for the exercise of additional supervisory powers pursuant to Regulation (EU) no. 648/2012

1. CONSOB is the national authority with competence as regards compliance with the obligations pursuant to Article 4, sub-section 3, of Regulation no. 648/2012 and the relative technical regulatory provisions on the part of subjects that act in the capacity of participants of the central counterparties or as customers of the latter, as defined under Article 2, point 15), of the said Regulation, and the obligations pursuant to Article 38, sub-section 1, and Article 39, sub-sections 4, 5, 6 and 7 of the same Regulation, on the part of subjects that act as participants of the central counterparties.

Article 79-octies.1
Determination of the national authorities competent for the exercise of further supervisory powers pursuant to (EU) regulation no. 600/2014

1. CONSOB is the competent authority for compliance with the obligations referred to in article 29, sections 1 and 2, of (EU) regulation no. 600/2014 by trading venues, investment firms, Italian banks, as well as companies of the non-EU countries authorised pursuant to article 28 or of the article 29-ter of this decree, that operate in the capacity of participants with the central counterparties.

2. CONSOB is the competent authority for compliance with the Obligations connected with the agreements stipulated, pursuant to article 30 of the regulation referred to in paragraph 1, by parties that act in the capacity of participants with the central counterparties or in the capacity of clients of the latter, as defined by article 2, point 15), of (EU) regulation no. 648/2012.

3. CONSOB is the competent authority for compliance with obligations referred to in article 31, sections 2 and 3, of the regulation referred to in paragraph 1 by investment firms, Italian banks, as well as companies of the non-EU countries authorised pursuant to article 28 or the article 29-ter of this decree and the operators of regulated markets.

4. The Bank of Italy is the competent authority for compliance with the obligations referred to in paragraph 3 for wholesale state bond markets[511].

Article 79-novies
Supervisory powers

1. For the purposes of performing the functions attributed by this title, with regard to parties that act in the capacity of investors with the central counterparties or in the capacity of customers of the latter, CONSOB has the powers provided for in articles 6-bis, 6-ter and 7. With regard to the operators of the trading venues, CONSOB and the Bank of Italy have the powers provided for by articles 62-octies, 62-novies and 62-decies[512].

1. For the execution of the functions attributed by this title, against subject that act as participants of central counterparties or as customers of the latter, CONSOB has the powers contemplated under Articles 7, 8 and 10.

TITLE II-BIS[513]
REGULATION OF CENTRAL DEPOSITORIES AND OF REGULATORY AND CENTRALISED MANAGEMENT ACTIVITIES

Article 79-decies
Definitions

1. In this Title:

a) "relevant authorities" are the authorities indicated in Article 12, sub-section 1, of Regulation (EU) no. 909/2014;

b) "intermediaries" are persons eligible to hold accounts on which financial instruments and related transfers can be recorded.

Chapter I
Competent and relevant national authorities

Article 79-undecies
Identification of the competent national authorities for central depositories

1. CONSOB and the Bank of Italy are the national competent authorities for the authorisation and supervision of the central depositories established in the Republic, pursuant to Article 11, sub-section 1, of Regulation (EU) no. 909/2014, pursuant to the provisions of chapters I and II.

2. CONSOB, in accordance with the Bank of Italy, authorises the performance of the services in the capacity of central depository on the part of legal persons established in the Republic, and the extension of the activities or the outsourcing of the services to third parties, pursuant to Articles 16 and 19 of Regulation no. 909/2014 and according to the procedure contemplated by Article 17 of the same Regulation. CONSOB, in accordance with the Bank of Italy, revokes the authorisation in the case of the circumstances contemplated by Article 20 of the Regulation referred to under paragraph 1.

3. CONSOB, in accordance with the Bank of Italy, authorises the central depositories established in the Republic to perform their accessory banking-type services, and to designate one or more Italian or EU banks and to extend the said services, pursuant to Articles 54 and 56 and according to the procedure contemplated under Article 55 of the Regulation referred to under paragraph 1. CONSOB, in accordance with the Bank of Italy, revokes the authorisation in the case of the circumstances contemplated by Article 57 of the said Regulation[514].

4. CONSOB informs the applicant of the result of the authorisation procedure referred to under paragraph 2 and 3.

5. CONSOB is the authority responsible for cooperation with the competent authorities and the relevant authorities of the other Member States, the ESMA and the EBA. The said authority is the point of information exchange and it involves the Bank of Italy for the aspects of this latter's competence.

6. CONSOB, in accordance with the Bank of Italy, adopts the provisions requested pursuant to Articles 18, sub-section 3, and 27, sub-section 8, of the Regulation referred to under paragraph 1.

7. CONSOB, in accordance with the Bank of Italy, exercises the powers indicated by Article 23 of the Regulation referred to under paragraph 1 in the capacity of the competent authority of the Member State of origin and the competent authority of the host Member State.

8. Without prejudice to the provision of paragraph 5, CONSOB and the Bank of Italy, within the sphere of their respective powers, collaborate with the authorities of the Member State of origin and of the host Member State, exchanging information, concluding the cooperation agreements contemplated under Article 24, sub-section 4, of the Regulation referred to under paragraph 1. The said authorities, within the sphere of their respective powers, adopt the measures contemplated by sub-section 5 of the same article and can carry out inspections at branches. Each authority communicates the inspections provided to the other authority, which can request to carry out checks on aspects of its own competence.

9. CONSOB, in accordance with the Bank of Italy, exercises the powers indicated under Article 25. sub-sections 6 and 7, of the Regulation referred to under paragraph 1.

9-bis. CONSOB may adopt the provisions of article 4-undecies, paragraph 4 in agreement with the Bank of Italy[515].

10. CONSOB, in accordance with the Bank of Italy, adopts the additional measures contemplated by the delegated deeds and the technical regulatory and implementation provisions of the Regulation referred to under paragraph 1.

Article 79-duodecies
Identification of the competent national authorities to carry out the additional functions contemplated by Regulation (EU) No 909/2014

1. The authorities empowered to supervise the application of the law on accounting records, contemplated under Article 3 of the Regulation (EU) no. 909/2014, are:

a) the Bank of Italy, for the obligations bearing on the counterparties of a financial, guarantee agreement and on the government securities wholesale trading venues;

b) CONSOB, for the obligations bearing on the other trading venues and issuers' head offices.

2. The authorities empowered to supervise the application of the law on the date fixed for the regulation of securities contemplated under Article 5 of the Regulation (EU) no. 909/2014, are:

a) CONSOB and the Bank of Italy, as regards the obligations bearing on the participants of a securities regulation system;

b) the Bank of Italy, for the obligations bearing on the government securities wholesale trading venues;

c) CONSOB, for the obligations bearing on the other trading venues.

3. CONSOB is the competent authority to supervise compliance with the obligations contemplated under Article 6, sub-section 2, of the Regulation referred to under paragraph 1 on the part of the investment firms and the Italian banks authorised to perform investments services and activities.

4. The authorities empowered to supervise the application of the law on enforced takeovers, contemplated under Article 7 of the Regulation referred to under paragraph 1, are:

a) the Bank of Italy and CONSOB, for the obligations relative to transactions offset through a central counterparty, as under Article 7, sub-section 10, letter a), of the regulation referred to under paragraph 1;

b) the Bank of Italy, for obligations relative to transactions not offset through a central counterparty but carried out at a venue for the wholesale trading of government securities, and CONSOB, for transactions carried out at other trading venues, pursuant to Article 7, sub-section 10, letter b), of the regulation referred to under paragraph 1;

c) the Bank of Italy, for obligations relative to transactions on government securities not offset through a central counterparty but carried out outside a trading venue, and CONSOB for the obligations relative to transactions carried out on other financial instruments, pursuant to Article 7, sub-section 10, letter c), of the regulation referred to under paragraph 1.

5. CONSOB and the Bank of Italy receive the data transmitted by the regulation internalisers pursuant to Article 9, sub-section 1, first paragraph of the regulation referred to under paragraph 1.

6. CONSOB is the competent authority to supervise compliance with the obligations contemplated under Article 38, sub-sections 5 and 6, of the regulation referred to under paragraph 1 on the part of the participants of a securities regulation system.

Article 79-terdecies
Identification of relevant national authorities

1. The Bank of Italy and CONSOB are the relevant authorities pursuant to Article 12, sub-section 1, letter a), of the Regulation (EU) no. 909/2014.

Chapter II
Supervisory purposes and supervised subjects

Article 79-quaterdecies
Supervisory purposes and powers

1. The supervision of central depositories is exercised by CONSOB, as regards transparency, the ordered performance of the services provided by the central depositories, the integrity of the markets and investor protection, and Bank of Italy as regards the stability and containment of the systemic risk.

2. Unless otherwise specified by this decree, the powers contemplated by the Regulation (EU) no. 909/2014 on supervision are exercised by the Bank of Italy and CONSOB, each within the sphere of its their respective competence.

3. CONSOB and the Bank of Italy, within the sphere of their respective competence and in pursuit of the purposes contemplated under paragraph 1, may, in respect of central depositories, intermediaries and the other subjects held to apply the regulation referred to under paragraph 2:

a) request the communication, including regular data and information and the transmission of records and documents, in the manner and within the time limits set out by it;

b) hold personal hearings;

c) carry out inspections;

d) request the exhibition of documents and the execution of deeds deemed necessary.

4. In the case contemplated under paragraph 3, letter b), the Bank of Italy and CONSOB draw up a report on the data, the information acquired and the statements rendered by the subjects concerned, who are invited to sign the report and who are entitled to receive copy of the same. CONSOB draws up the report also in the case contemplated by letter c) of paragraph 3.

5. CONSOB and the Bank of Italy, within the sphere of their respective duties and powers and in pursuit of the purposes contemplated by paragraph 1, may oblige the central depositories to adopt the actions and measures necessary to assure respect for the regulation contemplated under paragraph 2, of the relative delegated deeds, of the technical regulation and implementation provisions, and this title.

6. CONSOB may exercise the additional powers contemplated by Article 187-octies, paragraph 4, letters a), c), d) and e-bis), and paragraph 6.

7. In the case of need and urgency, the Bank of Italy, for the purposes indicated under paragraph 1, adopts the necessary provisions, also substituting the central depositories.

8. CONSOB and the Bank of Italy can dictate instructions on the procedures for the exercise of the supervisory powers.

9. To coordinate the exercise of the functions referred to under this title, CONSOB and the Bank of Italy establish, by a memorandum of understanding, the cooperation procedures and the reciprocal exchange of relevant information, taking into account the need to reduce to a minimum the charges bearing on the supervised subjects and to assure that the supervisory authorities' action is not too costly. The memorandum of understanding is rendered public by the Bank of Italy and CONSOB in the manner established by the same.

Article 79-quinquiesdecies
Regulation of services

1. The central depositories issue regulations to discipline the services provided by the same, the relative procedures and the criteria for the admission of the participants.

2. CONSOB, in accordance with the Bank of Italy, on the occasion of the initial authorisation, approves the regulations referred to under paragraph 1, any successive amendment and can request amendments in order to eliminate any malfunctions encountered in the services performed.

Article 79-sexiesdecies
Internal systems of reporting infringements (Whistleblowing)

…omissis…[516]

Article 79-septiesdecies
Reporting of infringements to the Bank of Italy and to CONSOB

…omissis…[517]

Chapter III
Central depositories

Section I
The regulation of centralised depositories

Article 79-octiesdecies
Statutory audit of accounts

1. The central depositories established in the Republic are subject to Articles 155, paragraph 2, 156, paragraph 4 and 159, paragraph 1.

Article 79-noviesdecies
Modifications to the control framework

1. In the case of violation of the provisions of Article 27, sub-sections 7 and 8, of Regulation (EU) no. 909/2014 for the transfer of the shareholdings that give origin to changes in the identify of the persons that control the functioning of the central depository, the voting rights inherent to the equity held cannot be exercised. In case of non-compliance with the prohibition, the resolution or other measure adopted by the vote or, in any case, the determining contribution of the said shareholdings may be challenged under the provisions of the Italian Civil Code. The shares for which the voting right cannot be exercised are counted for the purposes of the regular constitution of the related shareholders' meeting.

2. The challenge may also be initiated by Consob or the Bank of Italy within one hundred eighty days of the date of the resolution or, if this is subject to registration in the companies register, within one hundred eighty days of registration or, if it is subject only to filing at the companies register office, within one hundred eighty days of the date of this.

Article 79-noviesdecies.1
Provisions applicable to the performance of investment services and activities by central depositaries

1. Without prejudice to what is provided for in this title and title II-ter, the provisions of this decree governing the provision of investment services and activities, with the exception of articles 13, 14, 15, 16, 17, 18, 19, 20 and 20-bis, are applied to the central depositaries authorised pursuant to (EU) regulation no. 909/2014 and established on Italian soil or in another member state with branches in Italy that perform investment services and activities in addition to the provision of services explicitly listed in Sections A and B of the Annex to the indicated regulation in conformance with what is provided for in article 73 of the aforementioned rule[518].

Section II
Crises of central depositories

Article 79-vicies
Crises

1. If serious irregularities are found, the Ministry of Economy and Finance, on proposal of CONSOB or the Bank of Italy, may order the revocation of the governing bodies of the central depositories established in the Republic, with decree published in the Official Journal of the Italian Republic. The said decree will appoint one or more special commissioners for the administration of the securities central depository and determines their fees, charged to the company itself. Articles 70, paragraphs from 2 to 5, 72, except for paragraphs 2 and 8, and 75 of Italian Legislative Decree no. 385 of 1 September 1993, apply, attributed the powers of the Bank of Italy to the authority that proposed the provision.

2. If a central depository is declared to be in a state of insolvency pursuant to Article 195 of the bankruptcy law or if revocation of the authorisation is ordered pursuant to Regulation (EU) no. 909/2014, the Ministry of Economy and Finance issues a decree ordering compulsory administrative liquidation with exclusion of bankruptcy, according to the provisions of Articles 80, paragraphs 3, 4, 5 and 6, 81, 82, 83, 84, except for paragraph 2, from 85 to 90, 91 except for paragraphs 1-bis e 11-bis, 92, 93 and 94, of Italian Legislative Decree no. 385 of 1 September 1993, inasmuch as compatible.

Article 80
Central depository activities in relation to financial instruments

……omissis… [519]

Article 81
 Enactment regulation and service regulations

…omissis… [520]

Article 81-bis
Access to the central depository system

…omissis… [521]

Chapter IV
Centralised management of financial instruments
[522]

Article 82
Centralised management activities and regulation

1. Centralised management is performed by central depositories authorised by Regulation (EU) no. 909/2014 to perform the services contemplated under Section A, points 1) and 2), of the Annex to the said Regulation and the relative ancillary activities.

2. To ensure the pursuit of the purposes contemplated under Article 79-quaterdecies, paragraph 1, CONSOB, in accordance with the Bank of Italy, may indicate, by regulation in respect of the provisions of the Regulation referred to under paragraph 1:

a) the methods for the practice and the features of the service referred to under Section A, point 1), and the non-banking ancillary services listed in Section B, points 2) and 3), of the Annex to the Regulation referred to under paragraph 1, and every other non-banking service ancillary to the services referred to under Section A, points 1) and 2), allowed but not explicitly listed in Section B of the Annex of the Regulation referred to under paragraph 1;

b) the categories of intermediaries that can hold securities accounts at the central depository and the activities, contemplated by this chapter, that the intermediaries are qualified to perform;

c) the features of the financial instruments indicated under Article 83-bis, paragraph 2, for the purpose of subjecting the same to the provisions of Section I of this chapter;

d) without prejudice to the provisions of Article 83-sexies, paragraph 4, the models, procedures, terms and the intermediary responsible for the issue and revocation of the certifications and for correcting the communications;

e) the criteria and methods for the practice of the activity indicated under Article 83-octies;

f) the terms within which the intermediaries and the central depositories, pursuant to Article 83-novies, paragraph 1, letters d), e), f) and g), and Article 89, respectively, must comply with the obligation to report to the issuers the names of those with rights on the shares and the registrations recorded pursuant to Article 83-octies;

g) the terms and conditions of communication, on request, in cases and parties identified by the regulation itself, of the data identifying the principals of the financial instruments and the intermediaries holding them, without prejudice for the possibility for principals of financial instruments to specifically prohibit communication of their identification data and also without prejudice to the provisions of articles 83-duodecies for the financial instruments envisaged therein;

h) the requirements that must be met for the fees referred to under paragraph 3 and the fees requested by the intermediaries for keeping the accounts;

i) the other operating methods for the management of corporate transactions on the part of the intermediaries and the further provisions necessary for the implementation of what is contemplated under this chapter and those aimed, in any case, at pursuing the purposes indicated in the first part of this paragraph.

3. CONSOB, in accordance with the Bank of Italy, can establish that the fees for the services referred to under Section A, points 1), 2) and 3), of the Annex of the Regulation referred to under paragraph 1, performed by the centralised depositories, and the fees requested by the intermediaries for the certifications, communications and reports contemplated by this chapter, are subject to approval by the said authorities.

4. The regulation contemplated under paragraph 2 can delegate to the regulations of the services contemplated under Article 79-quinquiesdecies, paragraph 1, the discipline of some of the delegated matters, pursuant to the same paragraph or other provisions of this chapter, to the regulatory power of CONSOB exercised in accordance with the Bank of Italy[523].

Section I
Dematerialised centralised management
[524]

Article 83
Central dépositoires in crisis

…omissis… [525]

Article 83-bis
Scope of application

1. The securities regulated by Italian law admitted for trading or traded at an Italian trading venue or that of another European Union country with the issuer's consent can exist only in written form[526].

1-bis. The obligation pursuant to paragraph 1 can be absolved by direct or de materialised issue, at a central securities depository established in the Republic, or with a central securities depository authorised to perform trans-border services in the Republic, pursuant to Article 23 of Regulation (EU) no. 909/2014[527].

2. The regulation indicated under Article 82, paragraph 2, can provide that the discipline of this section is also applicable to financial instruments without the features indicated under paragraph 1, in order to facilitate circulation[528].

3. The issuer of financial instruments other than those referred to under paragraph 1 may voluntarily impose on them the dematerialisation system at a central depository established in the Republic, according to the discipline of this section[529].

Article 83-ter
Issue of financial instruments

…omissis… [530]

Article 83-quater [531]
Powers of central depositories and of intermediaries[532]

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, central depositories take out for each intermediary to record movements of the financial instruments deposited on that account[533].

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, paragraph 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. Without prejudice to the provisions of Article 83-sexies, entitlement to exercise the rights indicated under paragraph 1 is proven by the exhibition of certifications or communications to the issuer, issued or made by the intermediaries, pursuant to their own accounting records, in favour of the subject entitled to the right, and bearing indication of the corporate right that can be exercised, as contemplated by the Regulation pursuant to Article 82, paragraph 2[534].

4. The certifications and communications do not confer other rights except for the above-indicated entitlement. Individual rights for the aforesaid certifications are null and void[535].

4-bis. Except for the cases contemplated by Article 2352, last paragraph, of the Italian Civil Code, no financial instrument can have more than one certification or communication for the entitlement to the exercise of the same rights[536].

Article 83-sexies [537]
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. For meetings of holders of financial instruments admitted for trading with the issuer's consent on regulated markets or in the Italian multilateral trading facilities or those of other European Union countries, the communication contemplated by paragraph 1 is made by the intermediary on the basis of the evidence of the accounts contemplated by article 83-quater, paragraph 3, relative to the term of the accounting day of the seventh market business day prior to the date established for the meeting. Credit and debit entries made on accounts after these terms are not relevant in terms of assuring the legitimate exercise of voting rights at the shareholders' meeting. For the purposes of this ruling, the date of the first convocation is considered providing the dates of any successive convocations are indicated in the convocation notice; otherwise the date of each convocation shall be considered[538].

3. For meetings other than those indicated in paragraph 2, the articles of association may require the financial instruments referred to in the communication to be entered in the accounts of the party with voting rights as from a pre-established date, potentially establishing that they may not be transferred until the end of the shareholders' meeting. In the case of shareholders' meetings of companies whose shares are widely distributed to a relevant extent, the term may not exceed two working days. Should the Articles of Association not prevent the transfer of shares, any transfer of such shall entail the obligation bearing on the intermediary to rectify the communication sent previously[539]

4. Communications indicated in paragraph 1 must reach the issuer by the third trading day prior to the date indicated in paragraph 2, last sentence, or within an alternative term established, in concert with the Bank of Italy, by a CONSOB regulation, or within a successive term established in the Articles of Association pursuant to paragraphs 3 and 5. This is without prejudice to legitimate attendance and voting if communication has reached the issuer beyond the terms specified in this paragraph, providing it has been received before the start of the works of the meeting works held pursuant to single convocation[540].

5. Paragraphs 1, 3 and 4 apply to the meetings of holders of financial instruments issued by cooperatives. With reference to meetings of holders of financial instruments admitted for trading, with the consent of the issuer, on regulated markets or Italian multilateral trading facilities or those of other countries of the European Union, the terms pursuant to paragraph 3 cannot exceed two working days[541].

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 subject concerned, the communications and the certifications pursuant to Article 83-quinquies, paragraph 3, are issued when necessary for the exercise of the rights relative to the financial instruments[542];

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) reports to the issuer the identification data of the subjects that have requested the certification contemplated by Article 83-quinquies, paragraph 3, and those who have been paid dividends and those who, exercising the stock option or another right, have acquired all the registered financial instruments, specifying the relative quantities for compliance with the obligations bearing on the issuer; without prejudice to the provision of letter f), if the communication is made, it must comply with the reporting obligations[543];

e) at the request of the interested party or where envisaged under current regulations, shall also inform the issuer the identification data with rights on the financial instruments so that issuer obligations may be met[544];

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 the identification data so that issuer obligations may be met[545];

g) in cases in which statements pursuant to letters b) and c)  and reports pursuant to paragraphs d), e) and f) have been issued, notifies the issuer of the restrictions on financial instruments registered in accordance with article 83-octies[546].

2. The filing of the certifications issued by the intermediary and the receipt of the communications on the part of the issuer substitute, to all effects of law, the deposit of the securities contemplated by provisions in force[547].

3. …omissis…[548]

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 82, paragraph 2[549];

b) to the issuer for compliance with disclosure and reporting obligations imposed by this decree and by the regulation referred to in Article 82, paragraph 2[550].

Article 83-undecies
Issuer obligations

1. Issuers of shares update the shareholders' register in compliance with the communications and notifications made by the intermediaries in accordance with article 83-novies, paragraph 1, letters b), c), d), e), f) and g), of article 83-duodecies and, in the event of the demand for proxies promoted by the issuer, in compliance with the communications made by the intermediaries in accordance with article 144, paragraph 1, within thirty days of their receipt[551].

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 in a commercially-used format[552].

3. Paragraph 1 does not apply to cooperatives [553].

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 for trading with the consent of the issuer on regulated markets or multilateral trading facilities in Italy or another European Union country, may ask,, 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[554]..

2. The disclosures referred to in paragraph 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[555].

3. Where the Articles of Association envisage the option indicated in paragraph 1, the company shall make the same request if asked to do so by a number of shareholders representing at least half the minimum investment established by CONSOB pursuant to Article 147-ter, paragraph 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 investment[556].

4. Companies shall publish promptly, according to the procedures established by CONSOB in its regulations, a disclosure confirming that a request for identification has been made, providing reasons if the request is made pursuant to paragraph 1, or the identity and total investment of requesting shareholders for requests made pursuant to paragraph 3. The data received shall be made available to shareholders on a commonly-used electronic storage device free of charge, without prejudice to the obligation to update the shareholders’ register[557].

5. This article shall not apply to cooperatives.

Article 83-terdecies
Payment of dividends

1. As an exception to article 4 of Italian Law no. 1745 of 29 December 1962, the legitimate payment of profits and other distributions relating to the financial instruments registered in the accounts specified under article 83-quater, paragraph 3, is determined with reference to the evidence of the accounts in relation to the end of the accounting day specified by the issuer, which also establishes the methods by which the related payment is made[558].

Article 83-quaterdecies
Issuers' access to a central depositary established in another Member State

1. The provisions contained in this section represent the discipline applicable, pursuant to Article 49, sub-section 1, second and third paragraphs, of Regulation (EU) no. 909/2014, also in the case of the direct issue or the issue of securities regulated by Italian law in a system of written accounting managed by a central depository established in another Member State[559].

Section II
Centralised management of securitised financial instruments
[560]

Article 84
Identification and disclosures regarding centralised financial instruments (repealed)

Article 85
Central deposits

1. Where financial instruments consigned to the central system are represented by documents, the performance and the effects of central depository activity shall be governed by this section. Unless otherwise envisaged in this section, Articles 83-quater to 83-undecies shall apply[561].

2. The clause of the deposit contract concluded with intermediaries identified in the regulation pursuant to 82, paragraph 2, paragraph 1, referring to financial instruments identified in the that regulation, which authorises the depositary to subdeposit the financial instruments with a central securities depository must be approved in writing. In exercising such authority, depositaries shall have all the necessary powers, including that of endorsement to the central securities depository where the financial instruments in question are registered. Deposit may be performed directly by the issuer[562].

3. Financial instruments shall be consigned to the central systems as a non-fungible deposit. The central securities depository shall be authorised to carry out all transactions inherent to central depository activity in compliance with the regulation referred to in 79-quinquiesdecies, paragraph 1, and to take action as necessary following the destruction, loss or theft of the financial instruments[563].

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 79-quinquiesdecies, paragraph 1, request delivery of a corresponding quantity of financial instruments of the same type on deposit with the central securities depository[564].

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 securities depository; annotations of restrictions on the certificates shall have no effect, and this shall be stated on the instrument [565].

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 securities depository 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[566].

2. The central securities 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 securities depository of financial instruments to be admitted to the system shall specifically mention this decree [567].

Article 89
Updating of the shareholders’ register

1. For the purpose of updating the shareholders’ register, the central securities depository shall inform issuers of registered shares endorsed in its favour[568].

Section III[569]
Centralised management of government securities

Article 90
Centralised management of government securities

1. The Ministry of Economy and Finance establishes by regulations the manner for the identification of the central depositories of government securities and the criteria for the supply of the relative services[570].

TITLE II-TER[571]
ACCESS TO THE POST-TRADING INFRASTRUCTURES AND BETWEEN TRADING VENUES AND POST-TRADING INFRASTRUCTURES

Chapter I
National competent authorities

Article 90-bis
Identification of competent national authorities for access to central depositories established in the Republic

1. CONSOB is the competent authority for receiving complaints and for exercising, in accordance with the Bank of Italy, the powers on access to the central depositories established in the Republic on the part of:

a) participants, pursuant to Article 33, sub-section 3, of Regulation (EU) no. 909/2014;

b) issuers, pursuant to Article 49, sub-section 4, of the same Regulation;

c) central depositories, pursuant to Article 52, sub-section 2, of the same Regulation.

Article 90-ter
Identification of competent national authorities for access between trading venues and post-trading infrastructures

1. CONSOB is the competent authority for receiving complaints and, in accordance with the Bank of Italy, for performing the duties regarding the access of central counterparties and trading venues to the regulation services managed by central depositories, pursuant to Article 53, sub-section 1, second paragraph, and sub-section 3, of Regulation (EU) no. 909/2014.

2. On access to the trading venues, CONSOB is the competent authority to:

a) perform the duties contemplated by Article 8, sub-section 4, of Regulation (EU) no. 648/2012 and by article 36, section 4, of (EU) regulation no. 600/2014, when access requests are presented by central counterparties[572];

b) receive complaints and perform the duties indicated under Article 53, sub-section 1, paragraph 1, and sub-section 3, of Regulation (EU) no. 909/2014, when access requests are presented by central depositories.

3. The powers and duties under paragraph 2 are exercised by the Bank of Italy for wholesale government securities trading venues.

4. On access to central counterparties, the Bank of Italy, in accordance with CONSOB, is the competent authority to:

a) perform the duties contemplated by Article 7, sub-section 4, of Regulation (EU) no. 648/2012 and by article 35, section 4, of (EU) regulation no. 600/2014, when access requests are presented by trading venues[573];

b) receive complaints and perform the duties indicated under Article 53, sub-section 1, paragraph 1 and sub-section 3, of Regulation (EU) no. 909/2014, when access requests are presented by central depositories[574].

Chapter II
Access right and agreements

Article 90-quater
Access to central counterparties on a trans-border basis

1. Without prejudice to titles III, IV and V of Regulation (EU) no. 648/2012 EU investment companies and EU banks authorised to perform investment services or activities may have direct and indirect access to the central counterparties in the Republic, to finalise or to arrange the finalisation of transactions on financial instruments.

Article 90-quinquies
Access to transaction settlement services on financial instruments on a trans-border basis

1. Without prejudice to Article 33 of Regulation (EU) no. 909/2014, EU investment companies and EU banks, investment companies and the Community banks authorised to perform investment services or activities may have direct and indirect access to the settlement services managed by central depositories established in the Republic, to finalise or to arrange the finalisation of transactions on financial instruments[575].

2. The management companies assure participants to the markets that they manage the right to designate a system for the clearance and settlement of transactions on financial instruments carried out on such markets, other than that designated by the market itself, if the following conditions are respected:

a) there are connections and devices between the designated settlement system and the systems and the structure of the regulated market to guarantee the effective and economic settlement of the transactions;

b) recognition, on the part of CONSOB, that the technical conditions for the settlement of the transactions concluded on the regulated market by a system other than that designated by the market itself are such to allow for the regular and ordered functioning of the markets. Companies that manage regulated markets for the wholesale trading of government bonds must be recognised by the Bank of Italy.

3. The management companies inform CONSOB of the designations of the market participants pursuant to paragraph 2. Said communications are made to the Bank of Italy in the case of markets for the wholesale trading of government bonds.

4. The recognition contemplated under paragraph 2, letter b), is made after consultation with the Bank of Italy, in the case of regulated markets for the wholesale trading of private and public bonds other than government securities, and of regulated markets for the trading of instruments contemplated under Article 1, paragraph 2, letter d), and derivatives on public securities, interest rates and currency”.

Article 90-sexies
Agreements concluded by regulated market operators and multilateral trading facilities with central counterparties or with central depositories which manage regulation services

1. Without prejudice to Articles 7 and 8 and Title V of Regulation (EU) no. 648/2012, Article 53 of Regulation (EU) no. 909/2014, as well as Articles 35 and 36 of Regulation (EU) No 600/2014, the operators of a regulated market or of a multilateral trading facility can conclude agreements with the central counterparties or with the central depositories established in another Member State in order to provide for the settlement or for the regulation of some or all of the transactions concluded by the participants in the regulated market or the multilateral trading system[576].

2. CONSOB, can oppose the agreements set out under paragraph 1 if. also taking into account the conditions contemplated by Article 90-quinquies, paragraph 2, it is necessary to maintain the ordered functioning of the regulated markets and the multilateral trading facilities.

3. The provisions under paragraph 2 are adopted by the Bank of Italy for regulated markets and multi-lateral government securities wholesale trading systems.

4. CONSOB and the Bank of Italy can issue regulations to discipline the disclosure obligations of the managers in the case of the agreements referred to under paragraph 1.

Chapter III
Supervision

Article 90-septies
Supervisory powers

1. For the performance of the functions attributed by this Title, CONSOB and the Bank of Italy exercise, towards the managers of the trading venues, the central counterparties and the central depositories, the powers contemplated respectively by Articles 62-octies, 62-novies, 62-decies, 79-sexies and 79-quaterdecies[577].

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 91-bis
Communication of the Member State of origin

1. In the cases contemplated by Article 1, paragraph 1, letter w-quater), the issuers communicate the Member State of origin in compliance with Article 113-ter and the provisions adopted by CONSOB by regulation. The same disclosure is made to the competent authorities of the Member State in which the issuer has its registered office, if applicable, and to the competent authorities of the Member State of origin and of the host Member States[578].

2. For the issuers indicated under Article 1, paragraph 1, letter w-quater), numbers 3), 4) and 4-bis), which have not made the disclosure of the Member State of origin within three months from the date on which the securities are admitted for trading, for the first time in the European Union, solely on an Italian regulated market, the Member State of origin is Italy. For the issuers of securities admitted for trading on regulated markets of several Member States, including Italy, in the absence of the disclosure required by paragraph 1, both Italy and such other Member States are considered the Member State of origin, until the successive choice and relative disclosure[579].

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 paragraph 2, also envisaging the option to use electronic information transmission media[580].

Article 93
Definition of control

1. In this part, in addition to the companies indicated in paragraphs 1 and 2 of the first paragraph 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 paragraph 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
APPEAL TO PUBLIC SAVINGS

Chapter I[581]
Public offerings

Article 93-bis [582]
Definitions

1. In this Chapter:

a) "EU financial instruments" shall mean: securities and units of UCIs funds[583]

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) …omissis…[584]

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 Euro 1,000 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, offerer 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 Euro 1,000;

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 2013/50/EU or in which the first application for admission to trading on a regulated market was submitted as decided by the issuer, offerer 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 in the following circumstances:

3.1 if the Member State of origin has not been determined by their choice, or

3.2 pursuant to Article 2, paragraph 1, letter i), point iii), of Directive 2004/109/EC[585];

3-bis) in relation to the offer of units or shares of harmonised UCITS, the EU Member State in which the UCITS was constituted[586];

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 offerers

1. Persons who intend to make a public offering shall give advance notice thereof to CONSOB, attaching the prospectus to be published. In the case of the offer to the public of closed-ended UCI units or shares for which Italy is the Home State, the prospectus is published when the procedure contemplated by article 43 or by article 44 and the relative enactment provisions has been completed[587].

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. The prospectus also contains a securities note which briefly gives key information, in non-technical jargon, in the language in which the prospectus was originally drafted. The format and content of the securities note, together with the prospectus, give adequate information on the fundamental features of the financial products in order to aid the investors to decide whether or not to invest in such products[588].

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. Offerers may request the issue of the authorisation referred to in paragraph 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, paragraph 1, paragraph b), CONSOB shall establish, on request from the issuer or offerer, 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, offerer 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 paragraph.

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 or, when read together with the other parts of the prospectus, it does not give the key information that can aid the investor to decide whether or not to invest in the financial products offered. The securities note also contains a clear warning to this regard[589].

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, and according to the modalities and procedures including the consistency and comprehensibility of the information contained therein[590]..

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[591].

3. . …omissis…[592].

4. In order to ensure the efficiency of procedures for approval of a prospectus concerning banking debt securities not admitted to 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 offerer 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 communication to CONSOB, the modalities and terms for the publication of the prospectus and the warning, as well as for the updating of the prospectus, in compliance with Community provisions[593].

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 state.

f-bis) the internal organisational and decisional procedures for the adoption of the final deed of approval of the prospectus, even if by the assignment of responsibility to managerial personnel[594].

2. CONSOB shall lay down in a regulation the conduct-of-business rules to be observed by the offerer, the issuer and the person placing the financial products, as well as by persons in a control relationship with or related to such persons.[595]

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. The investors who have already decided to buy or underwrite the financial products before the publication of a supplement have the right, to be exercised within two working days after said publication, to revoke their decision, always providing the new facts, errors or inaccuracies contemplated by article 94, paragraph 7, have occurred before the final closing of the offer to the public or the delivery of the financial products. This term may be extended by the issuer or the offerer. The deadline within which the revocation right can be exercised is indicted in the supplement[596].

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 disclaimer[597].

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 offerer 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, paragraph 1.

2. CONSOB shall lay down in a regulation which of the provisions referred to in paragraph 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)[598].

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 register[599].

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 94[600].

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 European Union provisions[601].

2. If the offer of Community financial instruments is contemplated in Italy, as the Host Member State, the prospectus and any supplements approved by the authorities of the Home Member State are valid, providing the notification procedures contemplated by the EU provisions are respected. In the case of a public offer of closed-ended EU AIF units or shares, the prospectus is published on conclusion of the procedure contemplated by article 44 and the relative enactment provisions[602].

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, paragraphs 2 and 3 shall apply.

Section II
Public offering of open-end UCITS units or shares

Article 98-ter [603]
Document containing key information for investors and prospectus

1. The public offer of open-ended Italian UCI units or shares or EU or non-EU AIFs is preceded by communication to CONSOB. In the case of the offer of Italian UCITS, the communication shall be accompanied by the document containing key information for investors and the prospectus for publication. In the case of the offer of open-ended Italian, EU and non-EU AIFs, the communication shall be accompanied by the offer documentation indicated by CONSOB pursuant to article 98-quater, letter a-bis)[604].

2. The document containing the key information for investors is prepared in compliance with EU regulations governing the matter and the related enactment provisions adopted in the EU.

3. The document containing the key information for investors and the prospectus must enable investors to reasonably understand the nature and risks of the investment proposed and, consequently, make an aware choice on the investment. The document containing the key information for investors and the prospectus are of a pre-contractual nature. The key information for investors is correct, clear, not misleading and in line with the corresponding parts of the prospectus.

4. Article 94, paragraphs 8, 9 and 11 apply. No one can be called to answer exclusively on the basis of the document containing the key information for investors, including the related translation, unless it may be misleading, imprecise or not in line with the corresponding parts of the prospectus.

5. If units or shares are offered of harmonised Community UCITS, the document containing the key information for investors and the prospectus may be published in Italy once the notification procedure established under Article 42 has been completed[605].

5-bis. In the case of a public offer of open-ended Italian, EU and non-EU AIF units or shares, the offer documentation is published on conclusion of the procedure contemplated by article 43 or by article 44 and the relative enactment provisions[606].

Article 98-quater [607]
Implementation provisions

1. CONSOB prepares a regulation setting out provisions for enacting this section; these may also differ depending on the characteristics of open-ended UCITS, issuers and markets. In compliance with European Union provisions, the regulation specifically establishes[608]:

a) the content of the communication to CONSOB and of the prospectus relative to the offer of Italian UCITS units or shares, and the methods and terms for the publication of the document containing the key information for investors and the prospectus, the relative delivery and updating schedule[609];

a-bis) the content of the offer documentation of Italian, EU and non-EU AIF units or shares, the relative delivery and publication schedule[610];

a-ter) the language regime of the document containing the key information for investors and the prospectus;

b) the methods with which to comply in disseminating news, carrying out market surveys and collecting intentions to buy or subscribe;

c) methods by which to make the offer, also with a view to ensuring equal treatment of addressees[611].

2. Where the characteristics of the UCITS should so require, CONSOB may, at the behest of the offerers, permit the inclusion of additional or equivalent information in the offer documentation to that established by the regulation pursuant to paragraph 1.

Article 98-quinquies
Reporting obligations

1. Without prejudice to Title III, Chapter I, the following shall apply to offerers of open-end UCITS units or shares:

a) article 114, paragraphs 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. …omissis… [612]

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.

Article 98-sexies
Obligations relating to reporting violations

…omissis…[613]

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 66-quater, paragraph 1 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[614];

g) without prejudice to the powers envisaged under article 66-quater, paragraph 1 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[615].

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)[616];

b) aimed at a number of persons not exceeding that established by CONSOB in a regulation[617];

c) of a total amount not exceeding that established by CONSOB in a regulation[618];

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 part[619].

3. The issuer or offerer 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 paragraph 1.

3-bis. The obligations pursuant to regulation (EU) no. 1286/2014 hold firm in the case of the offer of a PRIIP to a retail investor as defined therein[620].

Article 100-bis [621]
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, paragraph 1, paragraph t) and there are not any cases of inapplicability provided for by Article 100[622].

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 100[623].

2-bis. The intermediary, in the successive resale of the financial products, may take avail of a prospectus already available and still valid, providing the issuer or the person responsible for drafting the prospectus have given their consent to such use by means of written agreement[624]

3. On the assumption as per paragraph 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 paragraph 2, Article 2483 paragraph 2 and Article 2526 paragraph 4 of the Civil Code[625].

4. Paragraph 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 credit rating agencies pursuant to regulation (EC) n° 1060/2009 or whose ratings are endorsed by rating agencies registered pursuant to the aforesaid regulation, withstanding the exercise of the other civil, penal and administrative actions provided for the protection of investors[626].

4-bis. CONSOB has the power to dictate enactment provisions with regard to this article[627].

Article 100-ter [628]
Offers via crowdfunding portals

1. Public offers conducted through one or more portals for the raising of capital may only concern themselves with the subscription of financial instruments issued by small and medium-sized businesses, social enterprises and mutual investment bodies or other joint stock companies that invest mainly in small and medium-sized businesses. Public offers regarding financial instruments issued by small and medium-sized businesses must have a total payment less than that established by CONSOB pursuant to article 100, paragraph 1, letter c) [629].

1-bis. In derogation to what is specified in article 2468, first paragraph, of the civil code, the investments in small and medium-sized businesses constituted in forms of limited liability companies constitute the subject of public offer to public of financial products, even through portals for the raising of capital, in the limits provided for by l this decree[630].

1-ter. The subscription of bonds or debt securities is reserved, within the limits established by the Italian Civil Code, to professional investors and to specific categories of investors identified by Consob and is carried out in a section of the portal different from the section where collection of risk capital is made[630-bis].

2. CONSOB determines the discipline applicable to the offers referred to in the preceding paragraph, in order to ensure that a part of the financial instruments offered are underwritten by professional investors or special categories of investors identified by CONSOB, when the offer is not reserved exclusively to professional customers, and to protect the investors who are not professional customers if the majority shareholders of the small and medium-sized enterprises or the social enterprise transfer their own equity to third parties after the offer[631].

2-bis. By way of alternative to what is established by article 2470, second paragraph, of the civil code and by article 36, paragraph 1-bis, of the decree-law no. 112 25 June 2008, converted, with amendments, by law no. 133 of 6 August 2008, and successive amendments, for the subscription and for the subsequent disposal of stakes representing the capital of small and medium-sized businesses and of social enterprises incorporated in the form of companies with limited liability:

a) subscription may be made through intermediaries qualified for the provision of one or more of the investment services provided for in article 1, paragraph 5, letters a), b), c), c-bis), and e); the qualified intermediaries make the subscription of investments for their own account and on behalf of subscribers or purchasers that have taken up the offer via portals;

b) within the thirty days following the closure of the offer, the qualified intermediaries deposit in the company register a certification vouching for their ownership as shareholders on behalf of third companies, facing the relative cost; to this end, the take up conditions published on the portal must expressly contemplate that take of the offer, in the case of successful collection of the same and if the investor decides to make use of the alternative system, entails the contextual and obligatory attribution of the mandate entrusted by the same to:

1) put the investment in their name and on behalf of the subscribers, keeping adequate evidence of the identity of the same and of the investments possessed;

2) issue, at the request of the subscriber or the subsequent purchaser, a certification proving the ownership of the holdings; this certification is solely a document of legitimisation for the exercise of the social rights, it is in the name of the subscriber, it is not transferrable, either temporarily or for any reason, to others and does not constitute a valid instrument for the transfer of the ownership of the holdings;

3) permit subscribers who so request to dispose of the stakes in accordance with what is specified in letter c) of this paragraph;

4) give subscribers and subsequent purchasers the power to request, at any time, transfer into their own names of the investments belonging to them;

c) the disposal of the investments by a subscriber or late purchaser takes place through the simple notification of the transfer of the records kept by the intermediary; the entry in the records and the transfer do not entail costs or charges for the purchaser or for the disposing party;

the subsequent certification performed by the intermediary, for the purposes of the exercise of the rights of the shareholders, substitutes and exercises the formality referred to in article 2470, second paragraph, of the civil code[632].

2-ter. The alternative share transfer arrangements referred to in paragraph 2-bis must be clearly indicated in the portal, where appropriate arrangements are also made to allow the investor to exercise the option or to indicate the intention to apply the ordinary scheme referred to in Article 2470, second paragraph, of the Italian Civil Code and Article 36, paragraph 1-bis of Decree-Law no. 112, converted, with modifications, by Law 6 August 2008, no. 133, and subsequent modifications[633].

2-quater. The execution of subscriptions, purchases and disposals of financial instruments issued by small and medium-sized businesses and social enterprises or investments representing capital of the same, done according to the methods specified in letters b) and c) of paragraph 2-bis of this article, do not require the stipulation of a written contract. Any fee, expense or charge payable by the subscriber, buyer or seller must be indicated in the bid portal, with separate and clear information on the conditions practised by each intermediary involved, and this should also appear in a specific section of each intermediary's internet site. Failing which, nothing is payable to the intermediaries[634].

2-quinquies. …omissis…[635].

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 is prohibited any form of advertisement concerning public offerings of financial products other than community financial products.

3. Advertisements shall comply with the guidelines laid down by CONSOB in accordance with Community regulation and, anyway, having regard to the accuracy of the information and its conformity with the contents of the prospectus, if already published, or with the contents of the prospectus to be published[636].

4. CONSOB may:

a) suspend as a precautionary measure for a maximum ten working consecutive days the further spread of an advertisement relating to a public offering concerning Community financial products, in the event of a well-founded suspicion of violation of the provisions in the preceding paragraphs or of the related regulations;

b) suspend a precautionary measure, for a maximum ninety days, the further spread of an advertisement relating to a public offering of products relating different from those referred to paragraph a), in the event of an ascertained violation of the provisions or rules referred to previous paragraphs or related regulations;

c) prohibit the further spread of the advertisement 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 offerer 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-bis [637]
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 paragraphs 2 and 5, article 103 paragraph 3-bis, all other provisions of this decree imposing specific reporting obligations upon the offerer 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 paragraphs 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 company[638];

d) takeover bids involving own shares.

3-bis. Without prejudice to the provisions of paragraph 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 91[639].

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 offering[640].

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, paragraph 1 and paragraph 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 managers[641].

4-ter. Without prejudice to paragraph 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 paragraph 4, unless they can prove that the conditions of said paragraph do not apply;

b) cases in which the cooperation between several persons does not qualify as acting in concert pursuant to paragraph 4[642].

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 offering.

4. Where CONSOB is the competent supervisory authority pursuant to paragraph 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 paragraph 4, second paragraph, shall be governed under Italian law and the relevant supervisory authority shall be CONSOB[643].

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[644].

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, paragraph 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 paragraph 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 paragraph, 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 91[645].

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, paragraph 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, paragraphs 5 and 6 shall apply to the potential bidders[646].

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, paragraphs 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, paragraph 1 and until one year from closure of the takeover bid[647].

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 council[648].

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 notice[649].

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, paragraph 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 section[650].

5. …omissis…[651]

Article 104 [652]
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, paragraph 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 unchanged[653].

1-bis. The shareholders’ meeting approval envisaged in paragraph 1 shall also be required for the implementation of any decision taken before the start of the period indicated in paragraph 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 offering[654].

1-ter. The articles of association may derogate, wholly or in part, from the provisions of paragraphs 1 and 1-bis. The company shall notify CONSOB and the supervisory authoriries of any derogations approved pursuant to this paragraph 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. Such derogations shall also be promptly disclosed to the public in accordance with the procedures laid down by CONSOB in its regulations[655].

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’ meeting[656].

Article 104-bis [657]
Breakthrough

1. Without prejudice to the provisions of article 23, paragraph 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 paragraphs 2 and 3 shall apply[658].

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 bidder. At the same Shareholders' Meetings, the multiple-voting shares confer only one vote and the voting rights assigned pursuant to Article 127-quinquies[659] are not counted.

3. If as a result of a takeover bid pursuant to paragraph 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 multiple-voting shares confer only one vote and the following have no effect[660]:

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 association.

b-bis) the additional votes due pursuant to article 127-quinquies[661].

4. The provisions of paragraphs 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 paragraph 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 paragraphs 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, paragraph 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 paragraph 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 paragraph 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 paragraph 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 valid[662].

Article 104-ter [663]
Reciprocity clause

1. The provisions of article 104, paragraphs 1 and 1-bis and, if envisaged in the articles of association, the provisions of article 104-bis, paragraphs 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 involved[664].

2. …omissis…[665]

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 paragraph 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[666].

4. Any measure adopted by the issuer that could frustrate the bid under the terms of paragraph 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 paragraph 1. The authorisation provided for in this paragraph shall be disclosed to the market without delay in accordance with the procedures laid down by CONSOB in its regulations[667].

Section II
Mandatory public offers to buy

Article 105 [668]
General provisions

1. Except for the provisions of article 101-ter, paragraphs 4 and 5, and the provisions of this section shall apply to Italian companies with securities admitted to trading on Italian regulated markets[669].

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 paragraph 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 board[670].

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 paragraph 2 if the securities referred to therein are, as a result of legal or regulatory provisions, without voting rights or if the articles of association contemplate increased voting rights[671].

3-bis. By regulation CONSOB shall establish the cases and methods by which derivates held are counted in the investment pursuant to paragraph 2[672].

Article 106 [673]
Global takeover bid

1. Anyone who, following acquisitions or increased voting rights, holds a stake greater than the thirty percent threshold or holds more than thirty percent of the voting rights of the same, promotes a takeover bid addressed to all security holders for the totality of the securities admitted for trading on a regulated market in their possession[674].

1-bis. In companies other than SMEs, the offer referred to in section 1 can be promoted also by anyone who, subsequent to acquisitions, comes to hold a stake greater than the threshold of twenty-five per cent, where there is no other shareholder with a higher stake[675].

1-ter. The articles of association of SMEs may contemplate a threshold different from that indicated in section 1, however not less than twenty-five percent nor greater than forty percent. If the articles of association are emended after the start of trading of the securities on a regulated market, the shareholders who have not participated in the relative resolution have the right to withdraw for all or part of their securities; articles 2437-bis, 2437-ter and 2437-quater of the Italian Civil Code shall be applied[676].

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 paragraph 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. The same price applies, in the absence of purchases at a higher price, if the threshold relative to voting rights is exceeded by effect of the additional voting rights pursuant to article 127-quinquies[677].

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 paragraph 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 sections 1, 1-bis and 1-ter is acquired by the purchase of shareholdings or by increased voting rights, in companies in which the capital is mainly constituted by shares issued by other companies pursuant to article 105, paragraph 1[678];

b) the offer obligation follows acquisitions higher than 5% or the increase in voting rights of more than five percent of the same, on the part of those who already hold the stake indicated in sections 1 and 1-ter without holding the majority of voting rights in the ordinary shareholders’ meeting[679];

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 paragraph 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 paragraph 5[680];

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…[681];

4) there are grounds to suspect that the market prices were subjected to manipulation[682].

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 in sections 1, 1-bis and 1-ter[683].

3-ter. The provisions of paragraphs c) and d) of paragraph 3 shall be disclosed to the public in accordance with the terms indicated in the regulation pursuant to article 103, paragraph 4, paragraph f).

3-quater. The offer obligation contemplated by paragraph 3, letter b), is not applicable to SMEs, providing that this is contemplated by the articles of association, until the date of the shareholders' meeting called for the approval of the financial statement for the fifth financial period after the listing[684].

4. A takeover bid shall not be considered mandatory where the shareholding indicated under in sections 1, 1-bis and 1-teris 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[685].

5. By regulation, CONSOB shall establish cases whereby exceeding the shareholding indicated in sections 1, 1-bis and 1-ter 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, or rather, where the temporary threshold is exceeded;

e) mergers or spin-offs;

f) purchases free of charge[686].

6. By provision with just cause, CONSOB may establish that a takeover bid shall not be considered mandatory on exceeding the holding indicated under in sections 1, 1-bis and 1-ter or paragraph 3 paragraph b) in cases attributable to the situations referred to under paragraph 5, but which are not expressly indicated in the regulation approved pursuant to said paragraph[687].

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, paragraph 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)[688].

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 paragraph 1, paragraph b)[689].

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 date[690];

b) the issuing company has approved a merger or a spin-off[691].

Article 108 [692]
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 reached[693].

2. With prejudice to the provisions of paragraph 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 paragraph 1 applies, and in cases referred to under paragraph 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 paragraph 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, paragraph 1, or article 17 of Regulation (EU) no. 596/2014, or prior to the acquisition giving rise to the commitment[694].

5. Where the situation indicated in paragraph 1 applies, and in cases referred to under paragraph 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 regulation[695].

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[696].

Article 109 [697]
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. The same obligations exist for those who act in concert, subsequent to an increase in voting rights, also in favour of only one of the same, if they then hold voting rights greater than the percentage indicated in article 106[698].

2. Paragraph 1, first sentence, 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[699].

3. For the purposes of application of paragraph 1, the instances indicated in article 101-bis, paragraph 4-bis, become significant, including jointly, only to parties in possession of the holdings[700].

Article 110
Failure to comply with obligations [701]

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)[702].

1-bis. Without prejudice to the provisions of article 192, paragraph 1, as an alternative to the sale referred to under paragraph 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 securities[703].

1-ter. The sale envisaged under paragraph 1 or takeover bid envisaged under paragraph 1-bis shall cancel the suspension of voting rights pursuant to paragraph 1[704].

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 reached[705].

2. The amount and form of payment to be assumed shall be established pursuant to article 108, paragraphs 3, 4 and 5[706].

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 companies[707].

TITLE III
ISSUERS

Chapter I
Company information

Article 113 [708]
Admission to trading of EU financial instruments

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 paragraphs 1, 2, 3, 4, 5, 8, 10 and 11 and 94-bis, paragraphs 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, paragraphs 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 66-quater, paragraph 1 may, as a preventive measure and for a period not exceeding ten consecutive working days on each occasion, request that the market operator suspend trading on a regulated market in the case of grounds for suspected violation of the provisions of this article and related enactment regulations[709];

i) without prejudice to the powers envisaged under article 66-quater, paragraph 1, may request that the market operator prohibit trading on a regulated market in the case of confirmed violation of the provisions of this article and related enactment regulations[710];

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[711].

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 apply.

Article 113-bis [712]
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, paragraph 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 offering[713] ;

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 paragraph 2 of the regulation, as a prospectus for admission to trading on a regulated market. Under paragraph 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-ter [714]
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 Chapter 3 of Regulation (EU) no. 596/2014 in 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 CONSOB[715].

2. Regulated disclosures shall be filed with CONSOB and the market operator for which the issuer has requested or approved admission to trading of its securities or closed-end funds, in order to guarantee that said market operator may exercise its functions pursuant to Part III, Title I-bis of this decree[716].

3. CONSOB, in exercising the powers attributed to the same by this Title, establishes the methods and terms for disclosure to the public of the regulated information, without prejudice to the required publication in national daily newspapers, taking into account the nature of said information, in order to ensure rapid, non-discriminatory access which can, with reasonable certainty, guarantee the effective disclosure throughout the European Community[717].

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 paragraph 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 paragraph 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[718].

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 66-quater, paragraph 1, 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 infringed[719].

Article 114 [720]
Information to be provided to the public

1. Listed issuers shall publicly disclose inside information pursuant to article 17 of Regulation (EU) no. 596/2014, in accordance with the procedures established by the technical implementing regulations adopted by the European Commission pursuant to said article 17, paragraph 10.  CONSOB shall prescribe provisions to coordinate the functions assigned to the market operator with its own functions, and may identify tasks to assign the same market operator for the correct performance of in the functions provided for by article 64, paragraph 2, letter d)[721].

2. Listed issuers shall establish due provisions in order that subsidiaries provide all the information necessary to comply with the disclosure obligations established by the law and by Regulation (EU)  no 596/2014. Subsidiaries shall transmit the information required in a timely manner[722].

3. In the event of delay in the public disclosure of inside information, listed issuers shall transmit, upon subsequent request by CONSOB, documents proving the fulfilment of the obligation provided for by article 17, paragraph 4 of the regulation (EU) no. 596/2014 and the relative technical implementing regulations[723].

4. ... omissis ...[724]

5. CONSOB, on a general basis or otherwise, may require to the issuers, to the subjects which control them, 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.[725]

6. Where the issuers, the subjects who control them and listed issuers with Italy as their home member country submit justified claim to the effect that public disclosure of information pursuant to paragraph 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 accepted[726].

7. Anyone holding shares for at least 10% of share capital and any other persons who control the listed shall notify CONSOB and the public of transactions involving the issuer’s shares or other related financial instruments that they have carried out directly or through intermediaries. Such disclosure shall also be made by the persons closely linked to the parties indicated above, identified by CONSOB in its regulations. In the same regulations, CONSOB shall specify the transactions, procedures and deadlines for such disclosures, the procedures and deadlines for the public disclosure of the information and the cases in which such obligations shall apply, including with reference to companies that control the issuer[727].

8. ... omissis ....[728]

9. For the purpose of guaranteeing that the public is correctly informed,  CONSOB may require the publication of the investment recommendatand other information recommending or advising an investment strategy by listed issuers, authorised parties as well as parties that control them, according to the procedures established with the regulations[729].

10. CONSOB shall assess, in advance and on a general basis, according to the procedures that it has established, the existence of the conditions indicated in article 20 paragraph 3, part 4 of the Regulation (EU) 596/2014 concerning the rules of self-regulation of journalists and communicate the relative outcome, as well as the said self-regulation rules, to the Ministry of the Economy and Finance[730].

11. ... omissis...[731]

12. The provisions of this article shall also apply to Italian and foreign persons who:

a) have requested or authorised the admission of self-issued financial instruments to trading on an Italian regulated market;

b) have requested or authorised the trading of self-issued financial instruments on an Italian multilateral trading facility;

c) have authorised the trading of self-issued financial instruments on an Italian organised trading facility[732].

Article 114-bis [733]
Information to be provided to the market concerning the allocation of financial instruments[734]  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, paragraph 1, the issuer makes the report available to the public with information concerning the following[735]:

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 plan[736];

b-bis) the categories of employees or collaborators of the company and controlling companies or controlled companies which benefit from the plan[737];

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 116[738].

3. CONSOB shall lay down in its regulation information concerning matters specified in paragraph 1 which should be provided in relation to the various procedures for implementing the plan, providing more detailed information for plans of special importance.[739]

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 procedures[740];

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) [741];

c) carry out inspections at the offices of persons referred to in paragraphs a) and b) to check company documents and obtain copies thereof.[742]

c-bis) exercise the other powers provided by Article 187-octies.[743]

2. The powers provided for in paragraph 1, paragraphs a), b) and c)[744] 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.

2-bis The provisions of paragraph 1 shall also apply to issuers that have asked for or authorised the trading of self-issued financial instruments on an Italian multilateral trading facility, as well as to issuers that have authorised the trading of self-issued financial instruments on an Italian organised trading facility[745].

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

... omissis....[746]

Article 115-ter
Communications on emission allowances

1. Articles 114 and 115, paragraph 1 shall apply to participants in the emission allowance market, as defined by article 3, paragraph 1, no. 20 of the Regulation (EU) no. 596/2014

2. For the purposes of for the provisions of articles 18, paragraph 8 and article 19, paragraph 10 of Regulation (EU) no. 596/2014, articles 114, paragraphs 5 and 6 and 116, paragraph 1 shall also apply to auction platforms, auction commissioners and auction supervisers with regard to auctions of emission allowances or other related auctioned products  held pursuant to Regulation (EU) no. 1031/2010[747].

Article 116
Financial instruments widely distributed among the public

1. CONSOB establishes by regulation the criteria for identifying financial instrument issuers that, although not listed on Italian regulated markets, are common among the public[748].

1-bis The issuers specified in paragraph 1 shall inform the public as soon as possible of facts not in the public domain that concern said issuers directly and that, if made public knowledge, could have a significant effect on the value of the financial instruments they issue. With the same regulation referred to in paragraph 1, CONSOB shall establish the methods of informing the public and the cases of exemption from the observance of the above mentioned reporting obligations, in the event that the issuers are in any case required to comply with the obligations provided for under Regulation (EU) 596/2014[749].

2. Articles 114, paragraphs 5 and 6 and 115, as well as the provisions of Part IV, Title III, Chapter II, Section VI, except for Articles 157 and 158, shall apply to the issuers indicated in paragraph 1[750].

2-bis. ...omissis...[751]

2-ter. …omissis…[752]

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,[753] 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 Ivass for the insurance and reinsurance undertakings referred to in Article 1 of Legislative Decree 173/1997[754].

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 paragraph 1.[755]

Article 117-ter [756]
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 subjects that promote products and services described as ethical or socially responsible.[757]

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. Paragraphs 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 shares[758].

Article 118-bis [759]
Checking information provided to the public[760]

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 country[761].

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 joint stock companies shall mean that represented by voting shares. In companies whose articles of association allow for increased voting rights or which contemplate the issue of multiple-voting rights, capital refers to the total number of voting rights[762].

2. Persons who hold more than three per cent of the capital of a listed issuer with Italy as home Member State shall notify the investee company and CONSOB. If the issuer is an SME, this threshold is five percent[763].

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 paragraph 2 for companies with an elevated current market value and particularly extensive shareholding structure[764].

3. …omissis…[765].

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 paragraph 2 that must be notified;[766]

b) the criteria for the calculation of the stakes, also taking into account the shares held indirectly, if the voting right is held or attributed to a subject other than the shareholder or where there are increased voting rights[767];

c) the content of and procedures for notifications and public announcements and any exemptions applicable to the latter;

d) the terms for the communication and for disclosure to the public[768];

d-bis) the cases in which notifications are due from owners of financial instruments carrying the rights referred to in the last paragraph of Article 2351 of the Civil Code.[769]

d-ter) cases in which a holding of derivatives is subject to reporting obligations[770];

d-quater) situations exempt from the application of these provisions[771].

4-bis In the case of the purchase of a stake in quoted issuers equal or above the thresholds of 10%, 20% and 25% of the relevant share capital in listed companies, except as provided for in Article 106, subsection 1-bis, the entity carrying out the communications referred to in paragraphs 2 and 3 of this article shall state the objectives it intends to pursue in the following six months. The declaration shall state under the responsibility of the declarant:

a) the means of financing the acquisition;

b) whether acting alone or in concert;

c) whether it intends to stop or continue its purchases, and whether it intends to acquire control of the issuer or anyway have an influence on the management of the company and, in such cases, the strategy it intends to adopt and the transactions to be carried out;

d) its intentions as to any agreements and shareholders' agreements to which it is party;

e) whether it intends to propose the integration or revocation of the issuer’s administrative or control bodies.

CONSOB can identify, with its own regulation, the cases where the aforementioned declaration is not due, taking into account the characteristics of the entity making the declaration or of the company whose shares have been purchased.

The declaration shall be transmitted to the company whose shares have been purchased and to CONSOB, as well declaration must be subject to public disclosure in accordance with the terms and conditions established by Consob Regulation issued pursuant to paragraph 4, letters c) and d).

Without prejudice to Article 185, if within six months of the communication of the declaration changes of intentions are made on the basis of objective circumstances that have occurred, a new reasoned statement must be addressed without delay to the company and CONSOB and brought to the knowledge of the public in the same manner. The new declaration shall resume the six-month period mentioned in the first paragraph of this paragraph [772].

5. Voting rights attached to listed shares or to financial instruments which have not been notified pursuant to paragraph 2 or the declaration required by subsection 4-bis 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).[773]

6. Paragraph 2 shall not apply to shares held by the Ministry of the Economy and Finance[774] through companies it controls. The related notification requirements shall be fulfilled by the companies controlled.

Article 121
Rules governing cross-holdings

1. Except for the cases contemplated by article 2359-bis of the civil code, in the case of reciprocal participation in excess of the limit indicated in article 120, paragraph 2, the company that has exceeded the limit successively cannot exercise its right to vote relative to the surplus shares and it 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.[775]

2. The limit referred to in paragraph 1 is increased to five percent or, in the cases contemplated by article 120, paragraph 2, second sentence, to ten percent if the threshold is exceeded by both companies subsequent to an agreement authorised in advance by the ordinary shareholders' meetings of the companies concerned[776].

3. Where a person owns a shareholding to more than the threshold indicated in paragraph 2 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[777].

4. The shareholdings shall be calculated by applying the methods laid down pursuant to Article 120 paragraph 4, paragraph b).

5. Paragraphs 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 shares[778].

6. In the event of non-compliance with the prohibitions on the exercise of voting rights provided for in Article 14, paragraph 5, paragraphs 1 and 3 shall apply. The challenge may also be initiated by CONSOB within the time limit specified in Article 14, paragraph 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) communicated to CONSOB;

b) published in extract form in the national daily newspapers;

c) filed at the Companies Register of the place where the company has its registered office;

d) communicated to listed companies[779].

2. CONSOB shall lay down in a regulation the contents of the notification, abridged form and publication and the related procedures[780].

3. Agreements shall be null and void in the event of non-compliance with the requirements laid down in paragraph 1.

4. Voting rights attached to listed shares for which the requirements laid down in paragraph 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 bid[781].

5-bis. Agreements referred to in this article shall not be subject to Articles 2341-bis and 2341-ter of the Civil Code.[782]

5-ter. The disclosure obligations pursuant to paragraph 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, paragraph 2[783].

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 [784]
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 paragraph 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.

d-bis) a description of the diversity policies applied regarding the structure of the administrative, management and auditing bodies in relation to aspects such as age, gender and training/professional courses taken, with a description of the objectives, implementation methods and results of said policies. If no policy is applied, the company must clearly and precisely indicate the reasons for said choice[785].

3. The disclosures pursuant to paragraphs 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 14, paragraph 2, letter e) of Legislative Decree no. 39 of 27 January 2010 to under paragraph 1, paragraphs c), d), f), l) and m), and under paragraph 2 paragraph b), and shall confirm the information has been provided pursuant to paragraph 2, letters a), c), d) and d-bis), of this article.[786]

5. Companies that are not issuers of securities admitted to trading on regulated markets or multilateral trading facilities may omit publication of the disclosures pursuant to paragraphs 1 and 2, except those indicated under paragraph 2, paragraph b).

5-bis. Companies may omit the publication of the information pursuant to paragraph 2, letter d-bis) providing that, at the reference date for the closure of the financial period, they do not exceed more than two of the following parameters:

a) balance sheet total: € 20,000,000;

b) total net revenue from sales and services: € 40,000,000;

c) average number of employees during the financial period was two hundred and fifty[787].

Article 123-ter
Report on remuneration

1. At least twenty-one days prior to the date of the shareholders' meeting established by article 2364, paragraph two, or the shareholders' meeting established by article 2364-bis second paragraph of the Italian Civil Code, companies with listed shares shall make a report on remuneration available to the public at the company registered offices, on its internet website or in any of the other ways established by CONSOB regulation[788].

2. The report on remuneration shall be laid out in the two sections established by paragraphs 3 and 4 and is approved by the Board of Directors. In companies adopting the dualism system, the report is approved by the supervisory board, upon proposal, limited to the section established by paragraph 4, letter b), of the management board.

3. The first section of the report on remuneration explains:

a) the company's policy on the remuneration of the members of the administrative bodies, general managers and executive with strategic responsibilities with reference to at least the following year;

b) the procedures used to adopt and implement this policy.

4. The second section, which is intended for the members of the administrative and auditing bodies, general managers and, in aggregate form, without prejudice to the provisions of the regulation issued in accordance with paragraph 8, for executives with strategic responsibilities:

a) provides a suitable representation of each of the items comprising remuneration, including treatment provided for in the event of cessation of office or termination of employment, highlighting the coherence with the company's policy in terms of remuneration approved the previous year;

b) analytically illustrates the fees paid during the financial year of reference, for any title and in any form by the company and by subsidiaries or associates, noting any components of said fees that refer to activities performed in years prior to that of reference, in addition to highlighting the fees to be paid in one or more subsequent years in exchange for the work performed in the year of reference, potentially specifying an estimated value for components that cannot objectively be quantified in the year of reference.

5. Fee plans established by article 114-bis are attached to the report, or the report specifies the section of the company's website where these documents can be viewed.

6. Without prejudice to the provisions of articles 2389 and 2409-terdecies, first paragraph, letter a) of the Italian Civil Code and article 114-bis, the shareholders' meeting called in accordance with article 2364, paragraph two or article 2364-bis, paragraph two, of the Italian Civil Code, resolves in favour or against the section of the report on remuneration established by paragraph 3. The resolution is not binding. The outcome of voting is made available to the public in accordance with article 125-quater, paragraph 2.

7. By regulation, adopted having first consulted with the Bank of Italy and Ivass as concerns the parties respectively supervised and considering sector Community regulations, CONSOB indicates the information to be included in the section of the remuneration report established by paragraph 3, including all information aiming to highlight the coherence of the remuneration policy with the pursuit of the company's long-term interests and with the risk management policy, in accordance with the provisions of paragraph 3 of Recommendation 2004/913/EC and paragraph 5 of Recommendation 2006/385/EC[789].

8. By regulation adopted in accordance with paragraph 7, CONSOB also indicates the information to be included in the section of the remuneration report envisaged by paragraph 4. CONSOB may:

a) identify the managers with strategic responsibilities for which information is supplied in nominative form;

b) differentiate the level of information detail according to company dimension[790].

Article 124
Provisions not applicable

1. CONSOB may declare Articles 120, 121, 122 and 123 paragraph 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-bis[791]
Information on the adoption of codes of conduct

Article 124-bis
Disclosure obligations concerning codes of conduct

…omissis…[792]

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 associations[793].

Section II
Shareholder rights[794]

Article 125
Calling of shareholders' meetings at the request of minority shareholders

…omissis…[795]

Article 125-bis [796]
Notice of call to shareholders’ meetings

1. The shareholders' meeting is convened by notice published on the company's website within thirty days of the date of the meeting and by other means and within the terms established by CONSOB with regulation issued in accordance with article 113-ter, paragraph 3, including the publication in extract form in the daily newspapers[797].

2. For shareholders’ meetings called to appoint, by means of list voting, 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.[798].

3. For shareholders’ meetings envisaged in Articles 2446, 2447 and 2448 of the Civil Code, the time limit indicated in paragraph 1 shall become at least twenty-one days prior to the date of the meeting.

4. The notice of call shall contain:

a) the indication of the day, time and place of the meeting and the list of matters on the agenda;

b) a clear, precise description of the procedures to be applied in order to attend and vote at the shareholders' meeting, including information concerning:

1) the terms for exercising the right to raise questions prior to the meeting and the right to have additional items placed on the agenda or to present further proposals on items already on the agenda and, also by reference to the company's website, any additional methods by which to exercise these rights;

2) the procedure for the exercise of the vote by proxy and, in particular, the methods for collecting the forms that can be used, optionally, for voting by proxy and the methods, including electronic methods, for communicating any notification of voting by proxy;

3) the procedure for the conferral of proxy to the party appointed by the company in accordance with article 135-undecies, with the specification that the power of proxy shall have no effect for proposals for which no voting instructions have been given;

4) the procedures for voting by correspondence or using electronic means, if envisaged by the Articles of Association;

c) the date specified in article 83-sexies, paragraph 2, with the specification that those who become holders of shares only after that date shall not have the right to attend and vote at the shareholders' meeting;

d) the terms and conditions for collecting the full text of the proposed resolutions, together with the explanatory reports and documents to be submitted to the shareholders' meeting;

d-bis) the terms and conditions for presenting lists to elect the members of the board of directors and minority members of the board of auditors or the supervisory board;

e) the address of the website specified in article 125-quater;

f) the other information which must be indicated in the notice calling the meeting pursuant to other provisions[799].

Article 125-ter [800]
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 envisaged by virtue of each of the items on the agenda, the board of directors shall make a report on each of the items 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[801].

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 paragraph 1. The report pursuant to Article 2446, paragraph 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, paragraphs 1, 1-bis and 1-ter shall remain valid.

3. In the event of shareholders' meetings convened in accordance with article 2367 of the Italian Civil Code, the report on the items on the agenda is prepared by shareholders requiring the convening of the meeting. The administrative body or auditors or supervisory board or management control committee, where they convened the meeting in accordance with article 2367, second paragraph, first sentence, of the Italian Civil Code, shall make available to the public the report, accompanied by their assessments if appropriate, at the same time as publishing the notice calling the shareholders' meeting in the ways set out by supervisory board 1[802].

Article 125-quater [803]
Web site

1. Without prejudice to the provisions of articles 125-bis and 125-ter, the following are made available on the company's website:

a) within the terms for the publication of the notice calling the meeting, as envisaged for each of the items on the agenda to which they refer, or subsequent terms as envisaged by the law for publication, the documents will be submitted to the shareholders' meeting;

b) within the terms for the publication of the notice calling the meeting, the forms that can be optionally used for voting by proxy and, where envisaged by the Articles of Association, for correspondence voting; where the forms cannot be made available in electronic format for technical reasons, the same website will specify how to obtain hard copies and, in this case, the company must send them free of charge, on request, by mail, also through the intermediaries;

c) within the terms of publication of the notice calling the meeting, information on the amount of the share capital specifying the number and categories of shares into which it is divided.

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 within five days 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 meeting[804].

Article 126 [805]
Notice of second and subsequent calls [806]

1. ...omissis... [807]

2. Where the Articles of Association envisage the possibility of second or subsequent callings, if the day for the second or subsequent calling is not specified in the notice convening the meeting, the meeting at a second or subsequent calling is held within thirty days. In this case, the terms established by article 125-bis, paragraphs 1 and 2 are reduced to twenty-one days as long as the agenda is not altered. In the case of a shareholders' meeting convened in accordance with article 125-bis, paragraph 2, the lists for the election of the members of the board of directors and the minority members of the board of auditors or supervisory board already deposited with the issuer are considered valid also with respect to the new calling. The presentation of new lists is permitted and the terms established by article 147-ter, paragraph 1-bis are reduced respectively to fifteen and ten days[808].

3. ...omissis... [809]

4. ...omissis... [810]

5. ...omissis... [811]

Article 126-bis [812]
Integration of the agenda of the shareholders' meeting and presentation of new proposed resolutions

1. Shareholders, who individually or jointly account for one fortieth of the share capital may ask, within ten days of publication of the notice calling the shareholders' meeting, or within five days in the event of calling the meeting in accordance with article 125-bis, paragraph 3 or article 104, paragraph 2, for the integration of the list of items on the agenda, specifying in the request, the additional items they propose or presenting proposed resolution on items already on the agenda. The requests, together with the certificate attesting ownership of the share, are presented in writing, by correspondence or electronically, in compliance with any requirements strictly necessary for the identification of the applicants indicated by the company. Those with voting rights may individually present proposed resolutions in the shareholders' meeting. For cooperatives the amount of the capital is determined by the statutes also in derogation of article 135[813].

2. Integrations to the agenda or the presentation of further proposed resolutions on items already on the agenda, in accordance with paragraph 1, are disclosed in the same ways as prescribed for the publication of the notice calling the meeting, at least fifteen days prior to the date scheduled for the shareholders' meeting. Additional proposed resolutions on items already on the agenda are made available to the public in the ways pursuant to article 125-ter, paragraph 1, at the same time as publishing news of the presentation. Terms are reduced to seven days in the case of shareholders' meetings called in accordance with article 104, paragraph 2 or in the case of a shareholders' meeting convened in accordance with article 125-bis, paragraph 3.

3. The agenda cannot be supplemented with items on which, in accordance with the law, the shareholders' meeting resolved on proposal of the administrative body or on the basis of a project or report prepared by it, other than those specified under article 125-ter, paragraph 1.

4. Shareholders requesting integration in accordance with paragraph 1 shall prepare a report giving the reason for the proposed resolutions on the new items for which it proposes discussion or the reason relating to additional proposed resolutions presented on items already on the agenda. The report is sent to the administrative body within the final terms for presentation of the request for integration. The administrative body makes the report available to the public, accompanied by any assessments, at the same time as publishing news of the integration or presentation, in the ways pursuant to article 125-ter, paragraph 1.

5. If the administrative body, or should it fail to take action, the board of auditors or supervisory board or management control committee fail to supplement the agenda with the new items or proposals presented in accordance with paragraph 1, the court, having heard the members of the board of directors and internal control bodies, where their refusal to do so should prove to be unjustified, orders the integration by decree. The decree is published in the ways set out by article 125-ter, paragraph 1.

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, paragraph 4 of the Civil Code[814].

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, paragraph 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, paragraph 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 facilities in Italy or in other EU countries with the consent of the issuer[815].

Article 127-ter
Right to submit questions prior to the shareholders' meeting

1. All those with voting rights may submit questions on the items on the agenda even prior to the shareholders' meeting. Questions received before the meeting will be answered at the latest during the said meeting. The company may provide a single reply to questions with the same content.

1-bis. The notice calling the meeting specifies the terms within which questions raised prior to the shareholders' meeting must reach the company. The terms must be no less than three days prior to the date of the first or only calling of the shareholders' meeting or five days if the notice of calling establishes that the company should provide a reply to the questions received before the actual meeting. In this case, replies are provided at least two days prior to the shareholders' meeting also by publication in a specific section of the company website.

2. No reply is necessary, even in the shareholders' meeting, to questions raised prior to it, where the information required is already available in "FAQ" format in the section of the company's website specified in paragraph 1-bis or when the answer has been published in accordance with said paragraph.

3. The reply attached to the minutes is considered as given during the meeting when is made available at the beginning of the meeting, by each of those entitle to vote[816].

Article 127-quater [817]
Dividend increases

1. As an exception to paragraph 1 of article 2350 of the Italian Civil Code, the Articles of Association may order that each share held by the same shareholder for a continuous period indicated in the article, in any case of no less than one year or the lesser period running between two consecutive payment dates of the annual dividend, shall assign the right to an increase of no more than 10 percent of the dividend distributed to the other shares. The Articles of Association may 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 paragraph 1[818].

2. Should the same party, during the maturation of the period indicated in paragraph 1, have directly or indirectly through trustees, subsidiaries or third party, have held an investment in excess of 0.5 percent of the company capital, or lesser percentage specified by the Articles of Association, the majority may only be assigned for shares in total representing this maximum stake. The majority cannot be assigned to shares held by those who, during said period, even temporarily exercised a dominant, individual or jointly with other shareholders by means of a shareholders' agreement as envisaged by article 122, or significant influence over the company. In any event, the increase may not be granted on shares which during the period indicated in paragraph 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, paragraph 1[819].

3. Disposal of the share, against payment or free of charge, shall result in loss of the benefits envisaged in paragraph 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 paragraph 1, the benefits shall be transferred to shares issued by the resulting companies, without prejudice to the application of paragraph 2 in reference to such companies.

4. Shares on which the benefits indicated in paragraph 1 are granted shall not constitute a special category of shares pursuant to Article 2348 of the Civil Code.

4–bis. those who have obtained assignment of the majority declare, at the request of the company, that there is no reason for hindrance established by paragraph 2 and show the certificates envisaged by article 83-quinquies certifying the duration the shares have been held for which benefits are requested and the certification relative to the existence of any additional conditions to which the Articles of Association subject assignment of the benefit[820].

4-ter. The resolution to amend the Articles of Association as envisaged by paragraph 1 does not assign the right to withdrawal in accordance with article 2437 of the Italian Civil Code[821].

Article 127-quinquies
Vote increase

1. The articles of association may specify that increased voting rights may be attributed, up to a maximum of two votes, for each share belonging to the same subject for an uninterrupted period of no less than twenty-four months starting from the date of registration contemplated by paragraph 2. In such a case, the articles of association may also contemplate that the subject holding the voting right may irrevocably renounce, all or part, the increased votes.

2. The articles of association establish the methods for the attribution of the increased vote and for checking the relative conditions, contemplating, in any case, a specific list. CONSOB establishes with its own regulation the implementation provisions of this article in order to ensure the transparency of the ownership structures and observance of the provisions of Title II, Chapter II, Section II. Without prejudice to the communication obligations borne by the holders of relevant stakes[822].

3. The transfer of shares for a consideration or free of charge, or the direct or indirect sale of the majority interest of a company or body whose voting right has increased to above the threshold contemplated by Article 120, section 2, involves the loss of the increased voting right. Unless otherwise laid down by the articles of association, the increased voting right:

a) is maintained in the case of succession pursuant to death, as well as in the case of the merger or spin-off of the shares;

b) extends to the newly issued shares in the case of a capital increase pursuant to Article 2442 of the Italian Civil Code.

4. The merger or spin-off project of a company whose articles of association rule that an increase in voting rights can contemplate that the increased voting right is also due to the entitled shares in lieu of those to which the increased vote is attributed. The articles of association may also rule that the increased voting right is extended proportionately to the shares issued in execution of a capital increase by means of new contributions.

5. The shares to which the benefit contemplated by paragraph 1 is applied do not represent a special category of shares pursuant to Article 2348 of the Italian Civil Code.

6. The resolution to amend the articles of association in order to contemplate increased voting does not recognise the withdrawal right as envisaged by Article 2437 of the Italian Civil Code.

7. If the resolution to amend the articles of association referred to in paragraph 6 is adopted during the procedure for the listing on a regulated market of the shares of a company not resulting from a merger involving a listed company, the relative clause can envisage that, for the purposes of the uninterrupted possession contemplated by paragraph 1, it is also necessary to count the possession prior to the date of registration on the list contemplated by paragraph 2.

8. Unless otherwise ruled by the articles of association, the vote increase is also calculated to determine the quorum for the constitution of the shareholders' meeting and for resolutions which regard the share capital quotas. The increase does not affect rights, other than voting rights, due pursuant to the possession of certain capital quotas[823].

Article 127-sexies
Multiple-voting shares

1. In derogation from Article 2351, section four, of the Italian Civil Code, the articles of association cannot contemplate the issue of multiple-voting shares.

2. Multiple-voting shares issued before the start of trading on a regulated market maintain their features and rights. Unless specified otherwise by the articles of association, in order to maintain unaltered the ratio between the various share categories, companies which have issued multiple-voting shares or companies resulting from the merger or spin-off of such companies may issue multiple-voting shares with the same features and rights of those already issued only in the following cases:

a) a share capital increase pursuant to Article 2442 of the Italian Civil Code or by new conferments without excluding or limiting option rights;

b) merger or spin-off.

3. In the case contemplated by section 2, the articles of association may not contemplate further increases in voting rights in favour of single share categories nor pursuant to Article 127-quinquies.

4. If the company does not take avail of the faculty of issuing new multiple-voting shares pursuant to the second sentence of section 2, there is no need for approval of the resolutions, pursuant to Article 2376 of the Italian Civil Code, on the part of the Special Meeting of the holders of the multiple-voting shares[824].

Article 128
Complaints to the board of auditors and the courts

...omissis... [825]

Article 129
Company actions for liability

...omissis... [826]

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...[827]

Article 132
Acquisition of own or parent company shares

1. Purchases of treasury shares under Articles 2357 and 2357-bis, paragraph 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.[828]

2. Paragraph 1 shall also apply to purchases of listed shares made under Article 2359-bis of the Civil Code by a subsidiary.

3. Paragraphs 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 paragraph, of the Civil Code, or falling under the scope of the compensation plans approved in accordance with article 114-bis[829].

3-bis. The provisions of this article shall also apply to the purchase of own shares by issuers that have requested or authorised the trading of self-issued shares on Italian multilateral trading facilities, or by subsidiaries[830].

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 regulation[831].

Article 134
Increases in capital

1. ...omissis...[832]

2. ...omissis...[833]

3. ...omissis...[834]

Section II-bis[835]
Cooperatives

Article 135
Capital percentages

1. For cooperatives, the capital percentages identified in the Civil Code and in this decree for the exercise of shareholder rights shall be a ratio of the total number of shareholders[836].

Article 135-bis
Regulation of cooperatives

1. Paragraph 2 of article 125-bis, and paragraph 4, paragraph b), number 1), relative only to the words: "the right to ask questions prior to the shareholders' meeting" and number 3 and letter c), of the same article. Articles 127-bis, 127-ter and 127-quater shall not apply to cooperatives.

2. All other exclusions specifically established by this decree shall hold firm.

3. The term contemplated by article 126-bis, paragraph 2, first sentence, is reduced to ten days[837] .

Article 135-ter
Market disclosure on the attribution of financial instruments to corporate officers, employees or collaborators

...omissis...[838]

Article 135-quater
Extraordinary shareholders' meeting

...omissis...[839]

Article 135-quinquies
Integration of the agenda of the shareholders' meeting

...omissis...[840]

Article 135-sexies
Financial reports

...omissis...[841]

Article 135-septies
Audit reports

...omissis...[842]

Article 135-octies
Proposed share capital increase

...omissis...[843]

Section II-ter[844]
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 specify one or more replacements[845].

2. As an exception to paragraph 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 paragraph 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 paragraph 3 and to the right of the person represented to indicate one or more substitutes[846].

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. The appointment may be made with a document in an electronic format with a digital signature in accordance with article 21, paragraph 2 of Italian Legislative Decree 82 of 7 March 2005. The companies specify in the Articles of Association at least one way of electronic notification of the proxy[847].

7. Paragraphs 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. As an exception to article 2372, second paragraph of the Italian Civil Code, asset management companies, SICAVs, harmonized management companies and non-EU parties providing collective investment management services may grant representation for more than one shareholders' meeting[848].

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. Article 1711, second paragraph of the Italian Civil Code does not apply[849].

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 or the latter exercises significant influence over the representative[850];

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, paragraph 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 the Articles of Association decree otherwise, companies with listed shares designate a party to whom the shareholders may, for each shareholders' meeting and within the end of the second trading day prior to the date scheduled for the shareholders' meeting, including for callings subsequent to the first, a proxy with voting instructions on all or some of the proposals on the agenda. The proxy shall be valid only for proposals on which voting instructions are conferred[851].

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 paragraph 1[852].

3. Shares for which full or partial proxy is conferred are calculated for the purpose of determining due constitution of the shareholders' meeting. With regard to proposals for which no voting instructions are given, the shares are not considered in calculating the majority and the percentage of capital required for the resolutions to be carried[853].

4. The person appointed as representative shall any interest, personal or on behalf of third parties, that he or she may have with respect to the resolution proposals on the agenda. The representative must also maintain confidentiality of the content of voting instructions received until scrutiny commences, without prejudice to the option of disclosing such information to his or her employees or collaborators, who shall also be subject to confidentiality obligations. The party appointed as representative may not be assigned proxies except in compliance with this article[854].

5. By regulation pursuant to paragraph 2, CONSOB may establish cases in which a representative failing to meet the indicated terms of Article 135-decies may express a vote other than that indicated in the voting instructions[855].

Article 135-duodecies
Cooperatives

1. The provisions of this section shall not apply to cooperatives.

Section III[856]
Solicitation of proxies[857]

Article 136
Definitions

1. For the purposes of this section, the following definitions shall apply:

a) “proxy”, means of representation conferred for the exercise of votes at shareholders’ meetings;

b) “solicitation”, a request to more than two hundred shareholders for proxy to be conferred in relation to specific voting proposals, or accompanied by recommendations, statements or other indications capable of influencing the vote;

c) “promoter”, the person or persons, including the issuer, acting in concert to promote the solicitation[858].

Article 137
General provisions

1. For the purposes of this section, Articles 135-novies and 135-decies shall apply to proxies[859].

2. Articles of Association that in any way limit representation in shareholders' meetings shall not apply to proxies given pursuant to the provisions of this chapter.

3. The Articles of Association may contain rules aimed at facilitating voting by proxy by employee shareholders[860].

4. The provisions of this section shall not apply to cooperatives.

4-bis. The provisions of this section also apply to Italian companies with financial instruments other than shares admitted with the consent of the issuer to trading on regulated markets in Italy or other European Union Member States with regards to the conferral of representation to exercise voting rights in shareholders' meeting by the owners of the said financial instruments[861].

Article 138
Solicitation

1. Solicitation is performed by the promoter through dissemination of a statement and a proxy form.

2. The vote relating to shares for which proxy is conferred is exercised by the promoter. The promoter may be substituted only by a person specifically indicated in the proxy form and in the solicitation statement[862].

Article 139
Requirements for promoters

…omissis…[863]

Article 140
Persons authorised to engage in solicitation

…omissis…[864]

Article 141
Shareholders’ associations

1. Requests for proxy are accompanied by recommendations, statements or other indications capable of influencing the vote shall not constitute solicitation pursuant to Article 136, paragraph 1, paragraph b) by shareholders' associations, targeting their own members, which:

a) are constituted by authenticated simple agreement;

b) do not exercise business activities other than those directly instrumental to the purpose of the association;

c) are composed of at least fifty natural persons, each of which owning a number of shares not exceeding 0.1 per cent of the share capital represented by shares with voting rights.

2. Proxy conferred upon the association by shareholders pursuant to paragraph 1 shall not be considered in calculating the limit of two hundred shareholders envisaged in Article 136, paragraph 1, paragraph b) [865].

Article 142
Proxies

1. Proxies shall be signed by the givers, may be revoked and may be given only for one shareholders' meeting that has already been called, remaining effective for subsequent calls where applicable; they may not be given blank and shall show the date, the name of the appointee and the voting instructions.

2. Proxy may also be conferred for only a number of the voting proposals indicated in the proxy form or for only certain items on the agenda. The representative shall vote on behalf of the person conferring proxy also on items of the agenda for which he or she has received instructions, even if not included in the solicitation. Shares for which full or partial proxy is conferred are calculated for the purpose of determining due constitution of the shareholders’ meeting[866].

Article 143
Liability

1. The information contained in the proxy statement or the proxy form and any sent out during a solicitation or collection of proxies must enable shareholders to make an informed decision; its suitability for this purpose shall be the liability of the promoter[867].

2. The promoter shall be liable for the completeness of information sent out during a solicitation[868].

3. In actions for damages arising from violation of the provisions of this section and the related regulations the burden of proof of having acted with the due diligence required shall be on the promoter[869].

Article 144
Performance of solicitations and collections of proxies

1. CONSOB shall issue a regulation on the transparency and correctness of solicitations and collections of proxies. In particular, the regulation shall lay down rules for:

a) the content of proxy statements and proxy forms and the procedures for their distribution;

b) the procedures for solicitation and the collection of proxies, and the conditions and procedures for casting proxy votes and revoking proxies;

c) the forms of cooperation between the promoter and the persons possessing the information on the identity of shareholders in order to permit the performance of solicitations[870].

2. CONSOB may:

a) request that the statement and proxy form include additional information to establish their specific dissemination methods;

b) suspend solicitation activities in the event of a grounded suspicion of breach of the provisions of this section or prohibit it in the event of ascertained breach of said provisions[871];

c) exercise the powers envisaged in Article 114 paragraph 5 and Article 115 paragraph 1 against the promoters[872].

3. …omissis…[873].

4. In cases in which the law envisages forms of control over investments in company share capital, a copy of the statement and proxy form must be sent to the competent supervisory authority prior to solicitation. The authorities shall prohibit any solicitation that compromises the purpose of the control of capital investments[874].

Section IV
Assets shares and other classes of shares[875]

Article 145
Issue of shares

1. Italian companies with ordinary shares listed on regulated markets in Italy or other EU countries may issue non-voting shares with preferential rights as regards the payment of dividends and the liquidation of assets.

2. The Articles of Association shall specify the substance of such preferential rights and the conditions and time and other limits for their exercise; they shall also establish the rights of holders of Assets shares where ordinary or Assets shares are excluded from trading.

3. The shares must carry, in addition to the information laid down in Article 2354 of the Civil Code, the words "azioni di risparmio" and an indication of the related privileges; the shares may be bearer shares, without prejudice to the second paragraph of Article 2354 of the Civil Code. The shares belonging to directors, members of the board of auditors and general managers must be registered shares.[876]

4. ...omissis... [877]

5. Where, as a consequence of a reduction in the capital owing to losses, the value of Assets shares and shares with limited voting rights exceeds half the share capital, the ratio referred to in paragraph 4 must be restored within two years through an issue of ordinary shares offered with the right of pre-emption to the holders of ordinary shares. However, where the capital represented by ordinary shares falls below one quarter of the share capital, it must be replenished to at least one quarter within six months. Companies shall be dissolved where the ratio of ordinary shares to Assets shares and shares with limited voting rights is not restored within the aforementioned time limits.

6. The share capital represented by Assets shares shall not be counted for the purpose of establishing the due constitution of the shareholders' meeting and the validity of the resolutions adopted, nor for the purpose of calculating the ratios referred to in Articles 2367, 2393 paragraphs 5 and 6, 2393-bis, 2408 paragraph 2, and 2409 paragraph 1 of the Civil Code.[878]

7. Assets shares may be issued as part of a share capital increase, in compliance with the provisions of article 2441 of the Italian Civil Code[879], or on conversion of ordinary or other shares already in issue. Conversion rights shall be attributed to shareholders by resolution of the extraordinary shareholders' meeting.

8. Unless the instrument of incorporation and Articles of Association state otherwise, in the case of issues of new shares for cash where the right of pre-emption has not been excluded or limited, holders of Assets shares shall enjoy the right of pre-emption for Assets shares of the same class or, in the absence thereof or to make up the difference, for Assets shares of another class, preference shares or ordinary shares, in that order.

Article 146
Special shareholders' meetings

1. Special shareholders' meetings of holders of Assets shares shall resolve:

a) on the appointment and removal of the common representative and legal action for liability against such person;

b) on the approval of resolutions adopted by the shareholders' meeting of the company that prejudice the rights of the category, with the favourable vote of as many shares as represent at least twenty per cent of the shares of the class in question;

c) on the creation of a fund for the expenses necessary to protect common interests and the related statement of accounts; the fund shall be advanced by the company, which may recover the advance from the profits due to holders of Assets shares in excess of any amount guaranteed;

d) on the settlement of disputes with the company, with the favourable vote of shares representing at least twenty per cent of the shares of the class in question;

e) on other matters of common interest.

2. Special meetings of holders of Assets shares shall be called by their common representative or by the directors of the company or the board of directors or management board within sixty days of the issue or conversion of the shares and when they deem it necessary or it has been requested by holders of Assets shares representing at least one per cent of the Assets shares of the same class.[880]

2-bis. In the case of omission or unjustified delay by the board of directors or management board, special meetings shall be called by the board of auditors or the supervisory board or, if requested by holders of Assets shares under paragraph 1, by the management control committee.[881]

3. By way of derogation from the second paragraph of Article 2376 of the Civil Code, special shareholders' meetings, except in the cases referred to in paragraphs 1b) and 1d), shall adopt resolutions at the first and second calls with the favourable vote of shares representing at least twenty and ten per cent of the shares in circulation; at a third or single calling, the special shareholders' meetings shall adopt resolutions by simple majority of the persons present, regardless of the proportion of the capital they represent. Article 2416 of the Civil Code shall apply[882].

Article 147
Common representatives

1. Common representatives shall be subject to Article 2417 of the Civil Code, where the term bondholders shall be understood to refer to holders of Assets shares.

2. ...omissis... [883]

3. Common representatives shall have the obligations and powers referred to in Article 2418 of the Civil Code, where the term bondholders shall be understood to refer to holders of Assets shares; they may also examine the books referred to in paragraphs 1) and 3) of Article 2421 of the Civil Code, obtain extracts thereof, attend shareholders' meetings and challenge the resolutions they adopt. Their expenses shall be charged to the fund referred to in Article 146(1)(c).

4. The Articles of Association may assign the common representative additional powers to protect the interests of holders of Assets shares and must establish procedures to ensure the common representative receives adequate information on corporate transactions that may influence the price of shares of the class in question.

Article 147-bis
Meetings of classes of investors

1. Articles 146 and 147 shall apply to the special meetings referred to in Article 2376, first paragraph, of the Civil Code if the shares are listed on regulated markets in Italy or other EU countries.[884]

Section IV-bis[885]
Administration bodies

Article 147-ter [886]
Election and composition of the Board of Directors

1. The Statute provides for members of the Board of Directors to be elected on the basis of the list of candidates and defines the minimum participation share required for their presentation, at an extent not above a fortieth of the share capital or at a different extent established by CONSOB with the regulation taking into account capitalization, floating funds and ownership structures of listed companies. The lists indicate which are the directors holding independent requisites established by law and by the Statute. The Statute may also provide that with regard to the sector for directors to be elected, what is not to be taken into account are the lists which have not reached a percentage of votes at least equal to half of the one required by the Statute for the presentation of same; for cooperatives the percentage is established by the statutes also in derogation from article 135. [887]

1-bis. Lists are deposited with the issuer, also by means of remote communication, in compliance with any requirements strictly necessary to identify the applicants indicated by the company, by the twenty-fifth day prior to the date of the meeting called to resolve on the appointment of the members of the board of directors and made available to the public at the company's headquarters, on the company's website and in the other ways envisaged by CONSOB by regulation, at least twenty-one days prior to the date of the shareholders' meeting. Ownership of the minimum investment envisaged by paragraph 1 is determined concerning the shares recorded in favour of the shareholder on the day on which the lists are deposited with the issuer. Related certification may also be submitted after filing, provided submission is within the time limit established for publication of the lists by the issuer[888].

1-ter. The Statute also lays down that the division of directors to be elected be made on the basis of a criterion that ensures a balance between genders. The less-represented gender must obtain at least one third of the directors elected. This division criterion applies for three consecutive mandates. If the composition of the board of directors resulting from the election does not comply with the division criterion provided for in the present section, CONSOB warns the company involved to comply with this criterion within the maximum term of four months from the warning. In the event of non-compliance with the warning, CONSOB applies a fine of from Euro 100,000 to Euro 1,000,000, according to criteria and methods laid down in its own regulations and sets a new term of three months for compliance. In the event of further non-compliance with respect to the new warning, the members elected lose their position. The statute regulates the methods of formation of the lists and the cases of replacement during a mandate in order to guarantee compliance with the division criterion provided for in the present section. CONSOB lays down regulations on the subject of infringement, application and observance of the rules on gender quotas, also with reference to the preliminary phase and the procedures to be adopted, on the basis of its own regulations to be adopted within six months from the date of entry into force of the rules contained in the present section. The rules of the present section apply also to companies organised according to the monistic system[889].

2. ...omissis...[890]

3. Except as provided for in Article 2409-septiesdecies of the Civil Code, at least one member shall be elected from the minority slate that obtained the largest number of votes and is not linked in any way, even indirectly, with the shareholders who presented or voted the list which resulted first by the number of votes. In companies organised under the one-tier system, the member elected from the minority slate must satisfy the integrity, experience and independence requirements established pursuant to Articles 148(3) and 148(4). Failure to satisfy the requirements shall result in disqualification from the position. [891]

4. In addition to what is provided for in paragraph 3, at least one of the members of the Board of Directors, or two if the Board of Directors is composed of more than seven members, should satisfy the independence requirements established for members of the board of auditors in Article 148(3) and, if provided for in the Articles of Association, the additional requirements established in codes of conduct drawn up by regulated stock exchange companies or by trade associations. This paragraph shall not apply to the boards of directors of companies organised under the one-tier system, which shall continue to be subject to the second paragraph of Article 2409-septiesdecies of the Civil Code. The independent director who, following his or her nomination, loses those requisites of independence should immediately inform the Board of Directors about this and, in any case falls from his/her office. [892]

Article 147-quater [893]
Composition of the management board

1. If the management board has more than four members, at least one of them must satisfy the independence requirements established for members of the board of auditors in Article 148(3) and, if provided for in the Articles of Association, the additional requirements established in codes of conduct drawn up by regulated stock exchange companies or by trade associations.

1-bis. If the management board has not less than three members, the rules of article 147-ter, paragraph 1-ter apply to it[894].

Article 147-quinquies
Integrity requirements

1. Persons who perform an administrative or management role must satisfy the integrity requirements established for members of internal control bodies in the regulation issued by the Minister of Justice pursuant to Article 148, paragraph 4.

2. Failure to satisfy the requirements shall result in disqualification from the position.[895]

Section V
Internal control bodies[896]

Article 148
Composition

1. The Articles of Association of a company shall establish, for the board of auditors:

a) the number, not less than three, of auditors;

b) the number not less than two, of alternates;

c) ...omissis...[897]

d) ...omissis...[898]

1-bis. The Articles of Association of the company state, moreover, that the division of members pursuant to section 1 shall be made in such a way that the less-represented gender shall obtain at least one third of the regular members of the board of auditors. This division criterion applies for three consecutive mandates. If the composition of the board of auditors resulting from the election does not comply with the division criterion provided for in the present section, CONSOB warns the company involved to comply with this criterion within the maximum term of four months from the warning. In the event of non-compliance with the warning, CONSOB applies a fine of from Euro 20,000 to Euro 200,000 and sets a new term of three months for compliance. In the event of further non-compliance with respect to the new warning, the members elected lose their position. CONSOB lays down regulations on the subject of infringement, application and observance of the rules on gender quotas, also with reference to the preliminary phase and the procedures to be adopted, on the basis of its own regulations to be adopted within six months from the date of entry into force of the rules contained in the present section[899].

2. CONSOB establishes the rules for the election procedure by list vote of a member of the Board of Auditors by minority shareholders, that are not directly or indirectly associated with the shareholders that submitted or voted the list qualifying as first for the number of votes received. Article 147-ter, paragraph 1-bis shall apply[900].

2-bis. The chairman of the board of auditors shall be appointed by the shareholders’ meeting from among the auditors elected by the minority shareholders.[901]

3. The following persons may not be elected as auditors and, where elected, they shall be disqualified from office:

a) persons who are in the conditions referred to in Article 23 82 of the Civil Code;

b) spouses, relatives and the like up to the fourth degree of kinship of the directors of the company, spouses, relatives and the like up to the fourth degree of kinship of the directors of the companies it controls, the companies it is controlled by and those subject to common control;[902]

c) persons who are linked to the company, the companies it controls, the companies it is controlled by and those subject to common control or to directors of the company or persons referred to in paragraph b) by self-employment or employee relationships or by other relationships of an economic or professional nature that might compromise their independence.[903]

4. In a regulation adopted pursuant to Article 17(3) of Law 400/2003, in agreement with the Minister of the Economy and Finance,[904] after consulting CONSOB, the Bank of Italy and Ivass, the Minister of Justice shall lay down the integrity and experience requirements for the members of the board of auditors[905], the supervisory board or the management control committee. Failure to satisfy the requirements shall result in disqualification from the position[906].

4-bis. Paragraphs 1-bis, 2 and 3 shall apply to supervisory boards.[907]

4-ter. Paragraphs 2-bis and 3 shall apply to management control committees. The representative of the minority shareholders shall be the director elected pursuant to Article 147-ter(3).[908]

4-quater. In the cases provided for in this article, disqualification shall be declared by the board of directors or, for companies organised according to the two-tier system or the one-tier system, by the shareholders’ meeting within thirty days of the appointment or of its learning of subsequent failure. In the event of inaction by the competent body, CONSOB shall declare the disqualification, at the request of any interested party or if it learns of the existence of the grounds for disqualification.[909]

Article 148-bis
Limits on the cumulation of positions

1. CONSOB shall lay down in a regulation the limits to the cumulation of management and control positions that members of the internal control bodies of companies referred to in this chapter and of companies with financial instruments widely distributed among the public in accordance with Article 116 may hold in all the companies referred to in Book V, Title V, Chapters V, VI and VII of the Civil Code. CONSOB shall establish such limits taking into account the onerousness and complexity of each type of position, including in relation to the size of the company, the number and size of the firms included in the consolidation, and the extension and articulation of its organisational structure[910].

2. Without prejudice to Article 2400, fourth paragraph, of the Civil Code, members of the internal control bodies of companies referred to in this chapter and of companies with financial instruments widely distributed among the public in accordance with Article 116 shall inform CONSOB and the public, within the time limits and in the ways prescribed by CONSOB in the regulation referred to in paragraph 1, of all the management and control positions they hold in companies referred to in Book V, Title V, Chapters V, VI and VII of the Civil Code. CONSOB shall declare the disqualification from positions taken on after the maximum number provided for in the regulation referred to in the first paragraph was reached.[911]

Article 149
Duties

1. The board of auditors shall check:

a) compliance with the law and the Articles of Association;

b) observance of the principles of correct administration;

c) the adequacy of the company's organisational structure for matters within the scope of the board's authority, the adequacy of the internal control system and the administrative and accounting system and the reliability of the latter in correctly representing the company's transactions;

c-bis) the arrangements for implementing the corporate governance rules provided for in codes of conduct drawn up by regulated stock exchange companies or by trade associations that the company, by means of public disclosures, declares it complies with;[912]

d) the adequacy of the instructions imparted by the company to its subsidiaries pursuant to Article 114(2).

2. The members of the board of auditors shall attend the shareholders' meetings and the meetings of the board of directors and the executive committee. Members of the board of auditors who fail to attend shareholders' meetings without good cause or, in any one financial year, fail to attend two meetings of the board of directors or the executive committee shall be disqualified from office.[913]

3. The board of auditors shall notify CONSOB without delay of irregularities found in the performance of its oversight activity and shall transmit the related minutes of the meetings and investigations conducted with all other relevant documentation.

4. Paragraph 3 shall not apply to companies with shares listed only on regulated markets in other EU countries.

4-bis. Paragraphs 1, 3 and 4 shall apply to the supervisory board. At least one member of the supervisory board shall participate in the meetings of the management board.[914]

4-ter. Paragraphs 1(c-bis), 1(d), 3 and 4 shall apply to the management control committee.[915]

Article 150
Information requirements

1. The directors shall promptly inform the board of auditors, in the manner laid down in the Articles of Association and at least every three months, of the activities carried out and the transactions of greatest significance for the company's profitability, financial position or assets and liabilities effected by the company or its subsidiaries; in particular, they shall report on any transactions in which they have an interest, for their own account or on behalf of third parties, or that are influenced by the person who performs the activity of direction and coordination.

2. The obligation referred to in the previous paragraph shall be fulfilled, in the two-tier system by the management board reporting to the supervisory board and, in the one-tier system, by the bodies with delegated powers reporting to the management control committee.

3. The board of auditors and the statutory auditor or independent statutory auditor shall promptly exchange data and information relevant to the performance of their respective duties[916].

4. The persons assigned to internal control functions shall also report to the board of auditors at their own initiative or at the request of one or more members of the board of auditors.

5. Paragraphs 3 and 4 shall also apply to the supervisory board and the management control committee.[917]

Article 151
Powers

1. Members of the board of auditors, jointly or severally, may at any time carry out inspections and controls, and require the directors to supply information, inter alia with reference to subsidiaries, on the performance of the business or on particular transactions or make the same requests for information directly to the management and control bodies of subsidiaries.[918]

2. The board of auditors may exchange information with the corresponding bodies of subsidiaries concerning management and control systems and the general performance of the business. After notifying the chairman of the board of directors, it may also call the shareholders' meeting and meetings of the board of directors or the executive committee and use employees of the company in performing its duties. The right to call meetings and request collaboration may also be exercised individually by each member of the board of auditors, except for the right to call the shareholders’ meeting, which may not be exercised by less than two members.[919]

3. For the purpose of evaluating the adequacy and reliability of the administrative and accounting system, members of the board of auditors, on their own responsibility and at their own expense, may use, jointly or severally, their own employees and assistants who are not in any of the conditions referred to in Article 148(3). The company may deny such assistants access to confidential information.

4. Investigations carried out must be entered in the register of meetings and resolutions of the board of auditors, which must be kept by the board at the registered office of the company. The last paragraph of Article 2421 of the Civil Code shall apply.

Article 151-bis [920]
Powers of the supervisory board

1. The members of the supervisory board, jointly or severally, may require the members of the management board to supply information, inter alia with reference to subsidiaries, on the performance of the business or on particular transactions or make the same requests for information directly to the management and control bodies of subsidiaries.[921] The information shall be supplied to all the members of the supervisory board.

2. The members of the supervisory board, jointly or severally, may request the chairman to call a board meeting, indicating the matters to be discussed. The meeting must be called without delay unless this is prevented by reasons that are promptly notified to the person who made the request and explained to the next meeting of the supervisory board.

3. After notifying the chairman of the management board, the supervisory board may call the shareholders' meeting and meetings of the management board and use employees of the company in performing its duties. The right to call meetings and request collaboration may also be exercised individually by each member of the board of auditors, except for the right to call the shareholders’ meeting, which may not be exercised by less than two members.[922]

4. The supervisory board, or a member thereof with a specific mandate, may at any time carry out inspections and controls and exchange information with the corresponding bodies of subsidiaries concerning management and control systems and the general performance of the business.

Article 151-ter [923]
Powers of the management control committee

1. The members of the management control committee, jointly or severally, may require the other directors to supply information, inter alia with reference to subsidiaries, on the performance of the business or on particular transactions or make the same requests for information directly to the management and control bodies of subsidiaries.[924] The information shall be supplied to all the members of the internal control committee.

2. The members of the management control committee, jointly or severally, may request the chairman to call a committee meeting, indicating the matters to be discussed. The meeting must be called without delay unless this is prevented by reasons that are promptly notified to the person who made the request and explained to the next meeting of the internal control committee.

3. After notifying the chairman of the board of directors, the management control committee may call meetings of the board of directors or the executive committee and use employees of the company in performing its duties. The right to call meetings and request collaboration may also be exercised individually by each member of the committee.[925]

4. The management control committee, or a member thereof with a specific mandate, may at any time carry out inspections and controls and exchange information with the corresponding bodies of subsidiaries concerning management and control systems and the general performance of the business.

Article 152
Reports to the courts

1. The board of auditors, or the supervisory board or the management control committee, where it has a well-founded suspicion that the directors, in violation of their duties, have committed serious irregularities in transactions that may injure the company or one or more of its subsidiaries, may report the facts to the courts pursuant to Article 2409 of the Civil Code. In such case the costs of the inspection shall be borne by the company and the court may also remove the directors.[926]

2. CONSOB, where it has a well-founded suspicion of serious irregularities in the performance of the supervisory duties of the board of auditors, the supervisory board or the management control committee may report the facts to the courts pursuant to Article 2409 of the Civil Code, the costs of the inspection shall be borne by the company.[927]

3. Paragraph 2 shall not apply to companies with shares listed only on regulated markets in other EU countries.

4. Article 70(7) of the Consolidated Law on Banking shall be unaffected.

Article 153
Obligation to report to the shareholders' meeting

1. The board of auditors, the supervisory board and the management control committee shall report on the supervisory activity performed and on any omissions and censurable facts found to the shareholders' meeting called to approve the annual accounts or pursuant to Article 2364-bis, paragraph 2, of the Civil Code.[928]

2. The board of auditors may make proposals to the shareholders' meeting concerning the annual accounts and their approval and matters within the scope of its authority.

Article 154
Provisions not applicable

1. Articles 2397, 2398, 2399, 2403, 2403-bis, 2405, 2426, points 5 and 6, 2429 paragraph 2, and 2441 paragraph 6, of the Civil Code shall not apply to boards of auditors of companies with listed shares.

2. Articles 2409-septies, 2409-duodecies and 2409-terdecies, paragraphs 1c), 1e) and 1f) of the Civil Code shall not apply to supervisory boards of companies with listed shares.

3. Articles 2399, first paragraph, and 2409-septies of the Civil Code shall not apply to the management control committees of companies with listed shares.[929]

Section V-bis[930]
Financial information[931]

Article 154-bis [932]
Manager charged with preparing a company’s financial reports

1. The Statute of listed issuers with Italy as the home Member State provides for professional requirements and the procedures for appointing a manager charged with preparing the company’s financial reports, subject to the mandatory opinion of the internal control body. [933]

2. Documents and communications of the company, which have been disseminated in the market and regard information on accounts including mid-year reports shall be accompanied by a written declaration by the general manager and the manager charged with preparing the company’s financial reports attesting their conformity against document results, books and accounts records. [934]

3. The manager charged with preparing the company’s financial reports shall put appropriate administrative and accounting procedures in place for preparing the annual accounts report and, where provided for, the consolidated accounts and every other disclosure of a financial nature. [935]

4. The Board of Directors supervises so that the executive assigned to draw up the company accounts report has adequate powers and means to carry out the tasks given to him according to this Article, as well as on the actual observance of the administrative and accounting procedures. [936]

5. In a special report on the annual, half-yearly and, where applicable, the consolidated financial statements, the delegated control bodies and the executive responsible for the preparation of company accounting documents shall confirm:

a) the adequacy and effective application, during the period of reference of the documents, of procedures pursuant to paragraph 3;

b) that the documents were prepared in compliance with applicable international accounting standards recognised by the European Community pursuant to European Parliament and Council Regulation no. 1606/2002 of 19 July 2002;

c) the correspondence between the documents and related bookkeeping and accounting records;

d) the suitability of the documents to truthfully and correctly represent the financial position of the issuer and the group of companies included in the scope of consolidation;

e) for the annual and consolidated financial statements, that the directors’ report contains a reliable analysis of the business outlook and management result, the financial position of the issuer and group companies included in the scope of consolidation, and a description of the main risks and uncertain situations to which they are exposed;

f) for the simplified half-yearly report, that the interim directors' report contains a reliable analysis of the information pursuant to paragraph 4 of article 154-ter[937].

5-bis. The declaration pursuant to paragraph 5 shall be prepared according to the model established by CONSOB regulation[938].

6. The provisions governing the liability of directors shall also apply to managers charged with preparing companies’ financial reports in relation to the tasks entrusted to them, without prejudice to actions that may be brought on the basis of the employment contract with the company.

Article 154-ter [939]
Financial reporting

1. Without prejudice to the provisions of articles 2364, second paragraph and 2364-bis, second paragraph of the Italian Civil Code, within four months of the year end, the listed issuers with Italy as their Home Member State must make available to the public at the company's headquarters, on the company website and with the other ways envisaged by CONSOB by regulation, the annual financial report, comprising the draft financial statements or, for companies that have adopted the dualist administrative and control system, the financial statements and consolidated financial statements, where prepared, the report on operations and certification envisaged by article 154-bis, paragraph 5. In the hypotheses envisaged by article 2409-terdecies, second paragraph of the Italian Civil Code, in lieu of the statutory financial statements, in accordance with this paragraph, the draft financial statements are published. The auditing report prepared by the legal auditor or legal auditing firm and the report indicated in article 153 are made entirely available to the public within the same terms[940]..

1-bis. Publications pursuant to paragraph 1 and the date of the meeting convened in accordance with articles 2364, second paragraph and 2364-bis, second paragraph of the Italian Civil Code must have at least twenty-one days between them[941].

1-ter. As an exception to article 2429, paragraph 1 of the Civil Code, the directors shall forward the draft financial statements, of the statutory auditor or statutory auditing company, together with the directors’ report, to the board of statutory auditors and the independent auditors at least fifteen days prior to the publication referred to in paragraph 1[942]..

2. The listed issuers with Italy as Member State of origin publish, as soon as possible and in any case within three months from the closure of the first six months of the financial year, a half-yearly financial report containing the simplified half-year statements, interim directors' report and the declaration pursuant to article 154-bis paragraph 5. Where applicable, the statutory auditor or independent statutory auditors report on the simplified half-yearly statements shall be published in full within the same time limit[943].

3. The simplified half-yearly statements referred to under paragraph 2, shall be prepared in compliance with applicable international accounting standards recognised by the European Community pursuant to EC Regulation no. 1606/2002. Such statements are prepared in consolidated format if the listed issuer with Italy as home member state is required to prepare consolidated financial statements.

4. The interim directors’ report shall at least contain indications of the more significant events occurring in the first six months of the financial year and their impact on the simplified half-yearly financial statements, together with a description of the main risks and uncertainties faced in the remaining six months of the year. For listed issuers with Italy as home member state, the interim directors’ report shall also contain information on significant related party transactions.

5. With the regulation pursuant to paragraph 6, CONSOB can order issuers whose Member State of origin is Italy, including financial enterprises, to periodically disclose additional financial information consisting mainly of:

a) a general description of the capital situation and economic trend of the issuer and its subsidiaries in the period of reference;

b) an illustration of the relevant events and of the transactions which have been carried out in the period of reference and their impact on the capital of the issuer and of its subsidiaries[944].

5-bis. Before the possible introduction of the obligations pursuant to paragraph 5, CONSOB publishes the impact analysis carried out pursuant to Article 14, paragraph 24-quater, of Italian Law no. 246 of 28 November 2005. This latter, in compliance with the Community discipline of reference, examines, also in a comparative key, the existence of the following conditions:

a) the additional periodic financial disclosure does not involve disproportionate expense, especially for the small and medium issuers concerned;

b) the content of the requested additional periodic financial disclosures is proportionate to the factors that contribute to the investors' investment decisions;

c) the requested additional periodic financial disclosures do not favour excessive attention for the issuers' short term results and yield and do not negatively influence the possibilities of access of the small and medium issuers to the regulated markets[945].

6. By regulation and in compliance with European law, CONSOB shall establish[946]:

a) the terms and procedures for the publication of the documents referred to under paragraphs 1 and 2 and of any additional disclosures contemplated by paragraph 5[947];

b) cases of exemption from the requirement to publish the financial reports[948];

c) the content of information on significant related party transactions pursuant to paragraph 4;

d) the terms of application of this article for issuers of units of closed-end funds.

7. Without prejudice to the powers envisaged by article 157, paragraph 2, where it is ascertained that documents comprising the financial statements pursuant to this article do not comply with drafting regulations, CONSOB may request that the issuer publishes this fact and arrange publication of supplementary information as necessary in order to reinstate correct market information.

Article 154-quater
Transparency of payments to governments

1. The listed issuers with Italy as Member State of origin, operating in one of the sectors referred to by Article 1, paragraph 1, letters h) and i), of Italian Legislative Decree no. 139 of 18 August 2015, publish, on their own Internet sites and by other means contemplated by CONSOB by regulation, the report on payments to governments drawn up in compliance with the provisions contained in Chapter I of the said decree, within six months of the date of the closure of the financial period.

2. The said report remains available to the public for ten years after its first publication.

3. The payments to governments are reported at a consolidated level[949].

Section VI
Statutory audit
[950]

Article 155
Performance of audits

1. …omissis…[951]

2. The statutory auditor or independent statutory auditors shall inform CONSOB and the control body without delay of any censurable facts found during statutory audit of the separate and consolidated financial statements[952].

3. …omissis…[953]

Article 156
Auditors reports[954]

1. …omissis…[955]

2. …omissis…[956]

3. …omissis…[957]

4. In the event of an adverse opinion, disclaimer or qualified opinion expressing significant doubts on going concern assumptions, the statutory auditor or independent statutory auditors shall promptly inform CONSOB[958].

4-bis. …omissis…[959]

5. …omissis…[960]

Article 157
Effects of audit opinions on the accounts

1. Except in the cases referred to in Article 156(4), the resolution of the shareholders' meeting or meeting of the supervisory board approving the annual accounts may be challenged by shareholders representing at least five per cent of the share capital on the grounds that the accounts fail to conform with the provisions governing the preparation thereof. Shareholder's representing the same percentage of the capital of companies with listed shares may request the courts to verify the conformity of the consolidated accounts with the provisions governing the preparation thereof.[961]

2. CONSOB may take the actions referred to in paragraph 1 within six months of the entry of the annual accounts or the consolidated accounts in the Company Register.

3. This article shall not apply to companies with shares listed only on regulated markets in other EU countries.

4. For cooperatives, the percentage of capital specified in paragraph 1 shall be understood to refer to the total number of members.

Article 158
Share capital increase proposals[962]

1. In the case of share capital increases excluding or limiting option rights, the fairness opinion on the issue price of the shares shall be released by a legal auditor or by a legal auditing firm. The statutory auditor or independent statutory auditors shall be informed of share capital increase proposals, together with the directors’ report envisaged in article 2441, paragraph 6 of the Italian Civil Code, at least forty-five days prior to the date established for examination by the shareholders’ meeting[963].

2. The directors’ report and opinion of the statutory auditor or independent statutory auditor shall be made available to the public by the methods indicated in Article 125-ter, paragraph 1, at least twenty-one days prior to the shareholders’ meeting and until the related resolution has been passed. Such documents must be annexed to the other documents required for entry of the resolution in the Register of Companies[964].

3. The previous paragraph shall also apply to the report of the statutory auditor or independent statutory auditors referred to in Article 2441, paragraph 4, paragraph 2 of the Italian Civil Code.[965]

3–bis. The sworn report by the expert appointed by the court in accordance with article 2343 of the Italian Civil Code or the documentation specified by article 2343-ter, third paragraph of the Italian Civil Code is made available to the public in the ways set out by article 125-ter, paragraph 1, at least twenty-one days prior to the shareholders' meeting and until such time as this has resolved[966].

4. ...omissis... [967]

5. ...omissis... [968]

Article 159 [969]
Conferment and revocation of the engagement

1. In the event of failure to appoint a statutory auditor or independent statutory auditors, the company required to confer appointment must promptly inform CONSOB, explaining the reasons for the delay in arranging the audit assignment[970].

2. …omissis…[971]

3. …omissis…[972]

4. …omissis…[973]

5. …omissis…[974]

6. …omissis…[975]

7. …omissis…[976]

8. …omissis…[977]

Article 160
Incompatibility

…omissis…[978]

Article 161
Special register of independent auditors

…omissis…[979]

Article 162
Supervision of independent auditors

…omissis…[980]

Article 163
CONSOB measures

…omissis…[981]

Article 164
Liability

…omissis…[982]

Article 165
Auditing of groups

…omissis…[983]

Article 165-bis
Companies with control of listed companies

…omissis…[984]

Section VI-bis[985]
Relations with foreign companies having their registered office in a country that does not ensure corporate transparency

Article 165-ter
Scope

1. This section shall apply to Italian companies with shares listed on regulated markets referred to in Article 119 and to Italian companies with financial instruments widely distributed among the public referred to in Article 116 that control companies having their registered office in a country whose legal system does not ensure transparency with regard to their formation, assets and liabilities, and operations; it shall also apply to Italian companies with shares listed on regulated markets or with financial instruments widely distributed among the public that are affiliated with or controlled by such foreign companies.

2. The notion of control defined in Article 93 and the notion of affiliation defined in the third paragraph of Article 2359 of the Civil Code shall apply.

3. The countries referred to in paragraph 1 shall be identified in decrees issued by the Minister of Justice, in concert with the Minister of the Economy and Finance, on the basis of the following factors:

a) as regards the forms and conditions for the setting up of companies:

1) absence of provision for publicizing constituent instruments and Articles of Association and subsequent amendments thereto;

2) absence of a minimum capital requirement for the setting up of companies capable of safeguarding creditors and of provision for the dissolution of companies in the event of a reduction of the capital below the legal minimum, except where it is replenished within a given time limit;

3) absence of rules that ensure the effectiveness and integrity of the subscribed share capital, in particular by having contributions in kind and contributions of claims valued by an expert appointed for the purpose;

4) absence of provision for persons or bodies authorised for the purpose by specific provisions of law to control the conformity of the instruments referred to in point 1) with the requirements for the setting up of companies;

b) as regards the structure of companies, absence of provision for a control body separate from the management body or of a control committee of the board of directors endowed with appropriate powers of inspection, control and authorisation with respect to the company’s accounting records, annual accounts and organisational arrangements and consisting of persons who satisfy appropriate integrity, experience and independence requirements;

c) as regards the annual accounts:

1) absence of provision for the obligation to draw up such accounts, including at least an income statement and a balance sheet, in conformity with the following principles:

1.1) clear, truthful and fair representation of the assets and liabilities and financial position of the company and of the result for the year;

1.2) clear description of the valuation methods used in preparing the income statement and the balance sheet;

2) absence of the obligation to file the annual accounts, drawn up in conformity with the principles referred to in point 1), with an administrative or judicial body;

3) absence of the obligation to have companies’ accounting records and annual accounts checked by the control body or committee referred to in paragraph b) or by a statutory auditor;

d) the legislation of the country in which the company has its re