Diamond spa

Pursuant to Article 99.1a) of Legislative Decree 58/1998, Consob has ordered the preventive suspension for 90 days of the public offering of "diamond custody contracts" known as "Diamond Fin" being made by Diamond s.p.a. (Resolution 14347 of 10 December 2003).

Under these contracts, investors are entrusted with a diamond in return for a fixed sum. After twelve months, investors receive the initial invested sum plus a sum for the safe-keeping of the diamond. Prospective investors agree to preserve the diamond in the same condition as it was loaned, i.e. "sealed."

The information gathered indicates that the key characteristics of the operation as outlined by Diamond are to all intents and purposes of an essentially financial nature, given the existence of the elements typical of a financial investment such as the use of capital, expectations of a return and a related risk. Such contracts can therefore be classified as financial products within the meaning of Article 1.1u) of Legislative Decree 58/1998.

Taken together, the information gathered indicated that there was a well-founded suspicion that the operation being carried out by Diamond was aimed at the subscription of financial products and therefore, according to the definition in Article 1.1t) of Legislative Decree 58/1998, amounted to a public offering. Since Consob has no record of having received either due notice of such a public offering or the prospectus to be published, as required by Article 94.1 of Legislative Decree 58/1998, there are grounds for believing that these activities are in violation of the statutory and regulatory provisions governing the solicitation of investors.(In Consob Informa n. 48/2003 - 15 December 2003)