Newsletter


Weekly newsletter - year XXVI - No. 11 - 23 March 2020

News of the week:
- > Consob Investor protection warnings
- > Consob prohibits short selling of any shares listed on Borsa Italiana, and adopts a strengthened transparency regime on holdings in listed companies. The measures will come into force on 18 March, and apply for three months
- > Coronavirus emergency: Consob suspends the deadline for payment of supervisory contributions for 2020 until 15 May. The time limits of sanction proceedings before the Securities and Financial Ombudsman (ACF) also suspended 
- > The list of statutory auditors and audit firms with revenues from public interest entities (PIEs) has been update
- > Short sales: ESMA requires holders of net short positions to disclose positions of 0.1% or more
- > Committee for the planning and coordination of financial education activities: the Consob member has been appointed
- > Memorandum of Understanding between Consob and the Bank of Italy on cooperation between the Securities and Financial Ombudsman (ACF) and the Banking and Financial Ombudsman (ABF) for alternative dispute resolution
- > Investor protection warnings from other regulatory authorities

Commission decisions:

N.B. measures adopted by Consob are published in the electronic Bulletin and, where envisaged, also in the Gazzetta Ufficiale. This newsletter summarises the more important or general measures and their disclosure here is therefore merely to update readers on Commission activities.

- NEWS OF THE WEEK -

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La Commissione Nazionale per le Società e la Borsa (The National Commission for Companies and the Stock Exchange) warns that:

  • the company Vega Italia Srl, also linked to the website wwww.vega-italia.com, is not authorised to offer to retail investors resident in Italy financial products such as investment contracts aimed at financing the delivery of entrepreneurial projects;
  • the company Glams Group Srl and its director Pasquale Di Santo, born in Sessa Aurunca on 4 May 1962, are not authorised to provide investment services to the Italian public, including through the website www.fintrade.it.

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CONSOB PROHIBITS SHORT SELLING OF ANY SHARES LISTED ON BORSA ITALIANA, AND ADOPTS A STRENGTHENED TRANSPARENCY REGIME ON HOLDINGS IN LISTED COMPANIES.
THE MEASURES WILL COME INTO FORCE ON 18 MARCH, AND APPLY FOR THREE MONTHS. 

On 18 March, Consob adopted two measures aimed, on the one hand, at containing the volatility of the financial markets and, on the other, at strengthening the transparency of holdings in Italian companies listed on the stock exchange. The measures became necessary in response to the great turbulence triggered in recent days by the Covid-19 pandemic.

Starting from the 18 March trading day, Consob has introduced a ban on net short positions (short sales and other shorting transactions) (Resolution no. 21303 of 17 March 2020) pursuant to Article 20 of Regulation (EU) 236/2012, after having obtained the approval of ESMA.

The prohibition, for the first time, applies to all shares traded on the Italian regulated market.

Under the ban, which follows on from those already adopted for the sessions on 13 (Resolution no. 21301 of 12 March) and 17 March (Resolution no. 21302 of 16 March), all forms of shorting transactions, including those carried out through derivatives or other financial instruments, are prohibited. Intraday shorting transactions are also prohibited. The ban will last for three months.

The decision to apply restrictive measures to all listed shares was taken with the aim of restoring market integrity, also in the light of the exceptional measures on short selling taken in recent days by ESMA and the supervisory authorities of Spain, France and Belgium.

In order to help traders and investors on the new provisions adopted on net short positions, Consob has published some FAQs, available at the following link http://www.consob.it/web/area-pubblica/pnc. In addition, there is a special email address for any questions: shortselling-service@consob.it.

At the same time, Consob has also decided to temporarily introduce an enhanced transparency regime on investors' holdings in Italian listed companies with higher capitalisation and broad-based share ownership.

The measure (Resolution no. 21304 of 17 March 2020), adopted pursuant to Article 120 paragraph 2-bis of the Consolidated Law on Finance (TUF), and without prejudice to the thresholds already provided for by the lawn in force, establishes lower thresholds for the size of shareholdings in listed companies that must be be notified.

The decision affects the 48 companies listed on the Mercato Telematico Azionario (MTA) of Borsa Italiana, named in the annex to the Consob resolution and identified according to a grid of criteria that refers to a capitalisation of more than 500 million euros and to ownership structures (controlled companies are excluded by law).

The new threshold is set at 1% for non-SME companies (Section A of the list) and 3% for SMEs (Section B of the list).

All the exemptions provided for by current law (art. 119-bis of the Issuers' Regulations) for management companies and authorised persons or in relation to equity investments held in the trading book of credit institutions and investment firms remain unchanged.

Those that, on the date the measure comes into force, have a shareholding above the new thresholds and below those prescribed in Article 120, paragraph 2, of the Consolidated Law on Finance must also notify Consob within 10 working days of said date.

The measure came into force on 18 March and will be valid, unless revoked, for three months.

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CORONAVIRUS EMERGENCY: CONSOB SUSPENDS THE DEADLINE FOR PAYMENT OF SUPERVISORY CONTRIBUTIONS FOR 2020 UNTIL 15 MAY.
THE TIME LIMITS OF SANCTION PROCEEDINGS BEFORE THE SECURITIES AND FINANCIAL OMBUDSMAN (ACF) ALSO SUSPENDED 

Consob has suspended until 15 May 2020 the deadline, previously set at 15 April, for the payment of supervisory contributions for 2020 due from Italian and foreign supervised subjects (Resolution no. 21305 of 18 March 2020).

Similarly, Consob has decided to also suspend the time limits in proceedings in progress at the Securities and Financial Ombudsman (ACF) initially suspended for the period 12 to 22 March (Resolution no. 21308 of 18 March 2020).

Both decisions were taken in view of the emergency caused by the Covid-19 epidemic.

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The Commission has updated the list of statutory auditors and audit firms with revenue from audits of "PIEs" (Public Interest Entities) in the "Consob and its activities/subjects and markets/audit firms" section of its website www.consob.it, distinguishing between those with revenues of more than 15% of total national PIE revenue, and those with such revenues below that threshold.

In fact, Article 16, paragraph 3 of Regulation (EU) 537/2014, on the statutory audit of Public Interest Entities (PIEs), which came into force on 17 June 2016, requires the supervisory authorities of statutory auditors to publish annually a list containing all the audit firms that undertake work for PIEs whose revenue (from such assignments) in the previous calendar year was less than 15% of the total recorded at national level.

This provision was introduced to prevent those whose revenues from PIE auditing assignments is insignificant from being excluded from procedures to appoint statutory auditors of PIEs.

The new updated list includes not only those audit firms and statutory auditors who have registered PIE revenue of less than 15% in 2019, in alphabetical order, but also those that registered more than 15% of the relevant national revenue, and refers to the specific "Statutory Audit" section of the Ministry of Economy and Finance's website for the names of the remaining audit firms and statutory auditors who are natural persons that are not currently appointed as auditors of public interest entities and who have therefore registered zero revenue from PIE assignments.

In this regard, it should be noted that the list of statutory auditors to be referred to during the appointment process is the Register kept by the Mef pursuant to Chapter III of Legislative Decree No. 39/2010 referred to in the following link: https://www.revisionelegale.mef.gov.it/opencms/opencms/Revisione-legale) where it is possible to view and extract the names of all the auditing companies and auditors registered in the aforementioned Register.

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The European Securities and Markets Authority - ESMA, in view of the exceptional situation generated by the spread of Covid-19, has used its emergency powers under Article 28 of Regulation No. 236/2012 for the first time since its establishment.

Specifically, ESMA has halved the threshold for notification to the competent national authorities of net short positions ("NSPs") in shares, from 0.2% to 0.1% of the share capital of the issuer concerned. The reduction of the threshold will remain in force until 16 June 2020, and may be extended. NSPs are an indicator of short sales.

This will provide competent national authorities, including Consob, with a bigger set of information on which to base their supervision.

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Consob has appointed Nadia Linciano, Head of the Economic Studies Office, as its member on the Committee for the planning and coordination of financial education activities, established by Article 24-bis of Decree Law no. 237 of 23 December 2016 (converted by Law no. 15 of 17 February 2017)) containing urgent provisions for the protection of savers in the credit sector. This appointment follows the departure of Giuseppe D'Agostino, previously indicated as Consob representative, with effect from 1 March 2020.

The Committee has the task of promoting and planning initiatives to raise awareness of financial education.

On 19 March last, Consob and the Bank of Italy signed a Memorandum of Understandingintended to regulate forms of collaboration between the Securities and Financial Ombudsman (ACF) and the Banking and Financial Ombudsman (ABF), the alternative resolution systems for disputes between clients and banking and financial intermediaries, competent for banking and financial services and transactions and investment activities, respectively.

To ensure a higher and more effective level of customer protection, the MoU promotes the establishment of mechanisms for the coordination and exchange of information between the ABF and ACF systems, while respecting the autonomy of the respective bodies, on issues of common interest as well as on public information and financial education initiatives.

The supervisory authorities of the United Kingdom (Financial Conduct Authority – Fca), Hong Kong (Securities and Futures Commission – SFC) Spain (Comisión Nacional del Mercado de Valores - CNMV), Switzerland (Swiss Financial Market Supervisory Authority – FINMA), Sweden (Finansinspektionen), Mauritius (Financial Services Commission – FSC) and New Zealand (Financial Markets Authority – New Zealand - FMA) report companies and websites that are offering investment, financial and insurance services without the required authorisations.

Reported by the FCA:

  • TrustFx(www.trustfx.io), with stated address in Geneva (Switzerland), a company previously reported by the FINMA (see "Consob Informa" no. 30/2019 of 9.9.2019);
  • Top Trade Pro (www.toptradepro.com), a company previously reported by the FMA (see "Consob Informa" no. 22/19 of 17.6.2019 and "Consob Informa" no. 25/19 of 8.7.2019), as well as by the CNMV (see "Consob Informa" no. 23/19 of 24.6.2019);
  • Gcg 24 / Global Consulting Group (www.gcg24.com) with stated address in Kingstown, (St Vincent and the Grenadines);
  • FteFXPro / Fte Fx(www.ftefxpro.com), with stated address in Kingstown (St Vincent and the Grenadines); The company was the subject of Consob resolution no. 21222 of 23.1.2020 and, subsequently, of an order to internet service providers to block access to the site from Italy (see "Consob Informa" no. 3/2020);
  • Fx Pro (FxPro@europe.com), clone of the authorised company FXPRO UK Limited (ww.fxpro.co.uk, www.fxpro.com) based in London (UK) previously reported by the FCA (see "Consob Informa" 19/2019 of 27.5.2019 and "Consob Informa" no. 3/2020 of 27.1.2020);
  • Citigroup Asset Management / Citibank Asset Management (www.citigroup-am.com) clone of the authorised company Citigroup Global Markets Ltd based in London (UK);
  • Herald Investment Trust (www.heraldinvestmenttrust.com) clone of the authorised company Herald Investment Trust PLC based in London (UK);
  • Unique Payment Services (www.unqiuepaymentservices.com) with stated address in London (UK) a clone of the authorised company Unique Payment Services Limited based in Edinburgh (UK);
  • Ivl Leasing Limited (alexjeffries@ivlleasing.net) clone of the authorised company Hanborough Enterprises Limited (with IVL Leasing trading platform) www.bridlevehicleleasing.co.uk, ivlleasing.com;
  • Euro 2 Pocket / Euro2Pocket (www.euro2pocket.com) with stated address in Liverpool (UK), clone of the authorised company Capital Bridging Finance Solutions Limited (www.capitalbfs.co.uk) based in Liverpool (UK).

Reported by the SFC:

  • Iec International (www.iecinternational.com).

Reported by the CNMV:

  • Anz Capitals / Vimaxo Ltd (www.anzcapitals.com);
  • Brightfinance / Capital Letter GMBH (www.brightfinance.co );
  • Gfxroyal / Capita Letter GMBH (www.gfxroyal.com);
  • Dax Robot (www.daxrobot.com);
  • Lvm Excange / Lvm Ltd (www.lvmexchange.com/es);
  • Ikko Trader / Okb Options (www.okboptions.com);
  • Sweden Capita LLC. (www.swedencap.com);
  • Trendex /Trnd Hlds Limited Company (www.trendex.co/es);
  • Zxbittrade / Zx Bit Group (www.zxbittrade.com);
  • Topdiamondfx Limited (www.topdiamondfx.com);
  • www.bitcoincircuitapp.com;
  • www.codigodelcaballero.com;
  • www.cryptolegacypro.com.

Reported by the FINMA:

  • Swiss500 (www.swiss500.com).

Reported by Finansinspektionen (Sweden):

  • Sepafx (www.sepafx.com), with stated address in Tallinn (Estonia).

Reported by the FSC:

  • Cg Trade (www.cgtrade.com/ index.htm).

Reported by the FMA (New Zealand):

  • Trade99 ( www.trade99.com).

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- COMMISSION DECISIONS -
taken or made public during the week (the documents are available in Italian version
)

Coronavirus emergency - Suspension of admnistrative
  • The suspension of all the time limits prescribed in resolution no. 19602 of 4 May 2016 regarding the institution of the Securities and Financial Ombudsman (ACF) and the adoption of the related regulation (Resolution no. 21308 of 18 March 2020) decreed once before, from 12 March to 22 March 2020, has been extended, from 23 March to 15 April 2020.

    Suspended, until 15 May 2020 the deadline of 15 April previously set for the payment of contributions due by entities subject to supervision (natural and legal persons) and required to pay a contribution for the 2020 financial year (Resolution no. 21305 of 18 March 2020).

Coronavirus emergency - Markets
  • Short selling of the shares listed on the MTA regulated market organised and operated by Borsa Italiana Spa has been banned for the whole of the trading day on 17 March 2020 (Resolution no. 21302 of 16 March 2020).

  • Short selling and all forms of speculative short transactions, including by means of derivatives or other financial instruments, have been banned, wherever they are carried out, including intraday positions, from the session of 18 March onwards, for a period of three months, on all listed shares, in accordance with Article 20 of the Regulation (EU) 236/2012(Resolution no. 21303 of 18 March 2020). 

Coronavirus emergency - Issuers
  • Pursuant to Article 120, paragraph 2-bis, of the Consolidated Law on Finance, and for a period of three months from 18 March 2020, unless revoked earlier, i) an additional threshold of 1% is prescribed, above which the notification obligations pursuant to Article 120, paragraph 2-bis, of the Consolidated Law on Finance arise, for the companies named in Section A of the attached list and ii) an additional threshold of 3% is prescribed for companies qualifying as SMEs pursuant to Article 1 w-quater.1 of the Consolidated Law on Finance, defined in Section B of the attached list (Resolution no. 21304 of 17 March 2020).
Registers and lists
  • Authorisation of Vontobel Wealth Management Sim Spa to undertake placement services without firm commitment to the issuer, portfolio management, reception and transmission of orders and investment advice, referred to in Article 1, paragraph 5, letters c-bis), d), e) and f) of Legislative Decree no. 58/1998, and registration in the register of SIMs (Italian investment firm) referred to in Article 20, paragraph 1 of the same decree (Resolution no. 21306 of 18 March 2020).

 

CONSOB INFORMS (Rome Tribunal Registration no. 250 of 30/10/2013) Chief Editor: Manlio Pisu - Editorial board: Antonella Nibaldi (coordinator), Claudia Amadio, Riccardo Carriero, Luca Cecchini, Laura Ferri, Chiara Tomaiuoli, Alfredo Gloria - Address: CONSOB Via G. B. Martini, 3 - 00198 Rome - telephone: (06) 84771 - fax: (06) 8417707. Documents or reports can be submitted via the interactive section of the web site www.consob.it, where CONSOB INFORMA can also be consulted via the "newsletter" link.