Resolution no. 20948

Suspension, pursuant to article 99, paragraph 1, letter b) of Legislative Decree no. 58/1998, ofthe offer to the public resident in Italy of 'investment plans' made by Tessline Limited, including through the website www.tessline.com

LA COMMISSIONE NAZIONALE PER LE SOCIETÀ E LA BORSA
[THE NATIONAL COMMISSION FOR COMPANIES AND THE STOCK EXCHANGE]

HAVING REGARD TO Law no. 216 of June 7, 1974, and subsequent amendments and additions;

HAVING REGARD TO Legislative Decree no. 58 of February 24, 1998 (‘Consolidated Law on Finance’) and subsequent amendments and additions;

HAVING FOUND that the investigations carried out by CONSOB revealed the existence on the web of the website www.tessline.com, attributable to the company Tessline Limited, with alleged registered address in Ireland, which promotes the offer of short-term and long-term ‘investment plans’ with associated high returns;

HAVING FOUND that, on this website, the company describes itself as the ‘undisputed leader in global markets of online investments and asset management’ offering its customers investment opportunities with the prospect of profit commensurate with the capital invested;

HAVING FOUND that this website, also available in Italian, includes a section called ‘Investors’, in which the various investment plans are offered, namely ‘Loyal’, ‘Increase’, ‘Professional’, ‘Prosperity’, ‘Luxury’, ‘Growing’ and ‘VIP’;

HAVING FOUND that, for example, with reference to the ‘Loyal’ investment plan, for which the amount to be paid by the client is between 50 and 2,500 dollars, the website reads ‘This plan is aimed at daily profit and can be adapted for new company clients. Clients who choose this plan will earn 1.6% every day of the week. This investment plan works for 30 working days. The total forward profitability is 48%’;

HAVING FOUND, furthermore, that with reference to the ‘Luxury’ investment plan, for which the amount to be paid by the client is between 15,000 and 150,000 dollars, the website reads ‘Clients who choose this plan will earn 2.4% per day. This investment plan works for 55 working days. The total forward profitability is 132%’;

HAVING FOUND, moreover, that the website proposes further investment plans with names similar to those of the above-mentioned investment plans (with the addition of the symbol ‘+’) with associated variable rates of return, which are described as particularly profitable. For example the ‘Loyal +’ investment plan, which, against the same minimum/maximum payment indicated above and for a period of 25 days offers a daily interest rate of between 1% and 1.90% and a total profitability of between 25% and 47.5%;

HAVING FOUND that the website offers various ‘referral’ programmes that enable additional bonuses to be obtained. In fact, there are seven foreseen levels of additional remuneration, depending on the number of new subscribers recruited directly and indirectly;

HAVING FOUND that the company used Italian individuals to promote the schemeamongst the Italian public through public presentations and provide possible support to Italian clients who wished to subscribe to the same scheme;

HAVING FOUND, furthermore, that, despite the requests by CONSOB, no useful information relating to the scheme was provided;

HAVING FOUND that he structure of the operation is presented as an investment opportunity; HAVING REGARD to the fact that, according to the definition provide by art. 1, para. 1, letter t) of Legislative Decree no. 58/ 1998,

the ‘public offer of financial products" shall be understood to mean ‘any communication addressed to persons, in any form and with any means whatsoever, that provides sufficient information on the terms of the offer and the financial products offered so as to render investors capable of deciding whether to purchase or subscribe to such financial products, including placement through authorised entities’;

HAVING CONSIDERED that the elements constituting the offering to the public can be summed up as follows:

a) the fact that the activity concerns ‘financial products’, a category that includes - pursuant to Art. 1, para. 1, letter u) of Legislative Decree no. 58/1998 - both the 'standardised’ figures of ‘financial instruments’ and ‘any other form of investment of a financial nature’;

b) performance of communication activities aimed at having one acquire or subscribe to the financial products and, consequently, including at the very least a description of their main characteristics;

c) the fact that the communication in question is addressed to the Italian public;

HAVING CONSIDERED that the notion of ‘investment of a financial nature’ implies the coexistence of the following three elements: (i) the investment of capital; (ii) the expectation of a return of a financial nature; (iii) the assumption of risk directly connected to or related to the investment of capital;

HAVING CONSIDERED that the structure of the operation in question requires that: (a) subscribers must use their own capital (b) in order to obtain a predefined return expressed as a percentage of the capital invested by the investor, which (c) entails a potential financial risk;

HAVING FOUND, therefore, that the aforementioned return is paid by Tessline Limited against the use of the investor’s capital;

HAVING CONSIDERED, therefore, that the reason for the trade proposal can be attributed to the production of a financial return consisting of consideration of the use of capital granted by the recipients of this return, who, therefore, invest their own money with the expectation of profit;

HAVING CONSIDERED therefore, that, with regard to the existence of the requirement referred to in letter a), i.e., the fact that the content of the offering can be classified as a ‘financial product’, the investment offered by Tessline Limited, based on that illustrated, possesses the characteristics of ‘an investment of a financial nature’;

HAVING FOUND, furthermore, that the website displays information describing the characteristics of the investment scheme in such a way as to render the investor capable of deciding whether or not to subscribe to it;

HAVING FOUND that the website www.tessline.com promotes the scheme using standardised and uniform terms, with no possibility for the individual investor to play any part in defining the contract;

HAVING ESTABLISHED therefore, that the requirement set out in letter b) is met;

HAVING ESTABLISHED, moreover, that the offering in question is directed at the Italian public, insofar as the website www.tessline.com is available also in Italian;

HAVING FOUND therefore, that the requirement set out in letter c) is also met, since the offering in question is aimed at the public resident in Italy;

HAVING FOUND therefore, that the activity set up by Tessline Limited, aimed at promoting the ‘investment plans’ described on the its website, has the characteristics of the public offering of financial products as defined above;

HAVING REGARD TO art. 94, para. 1, of Legislative Decree no. 58/1998, pursuant to which ‘Anyone intending to make an offer to the public must publish a prospectus in advance. To this end, for offers concerning EU financial instruments for which Italy is the Member State of origin and for offers of financial products other than EU financial instruments, prior notification must be sent to CONSOB including the prospectus intended for publication. The prospectus may not be published until it is approved by CONSOB’;

HAVING FOUND that, in relation to the activity set up by Tessline Limited, neither prior notification nor the information prospectus intended for publication were sent to CONSOB;

HAVING FOUND that the offer in question, on the basis of current evidence, does not qualify for any of the exemptions - contemplated by the combined provisions of art. 100 of Legislative Decree no. 58/1998 and art. 34-ter of CONSOB Regulation no. 11971/1998 - from enforcement of the rules on ‘solicitation of public savings’;

HAVING CONSIDERED, therefore, that there are grounds for suspecting the promotion of a public offer of financial products in infringement of the relevant laws and regulations;

HAVING ESTABLISHED that the public offering of these financial products is currently still ongoing;

HAVING REGARD TO art. 99, par. 1, letter b) of Leg. Decree no. 58/1998, according to which CONSOB ‘can, by way of a precaution, suspend for a period of up to ninety days any offer of products other than those referred to , in Letter a) [i.e. European financial instruments] if there are grounds for suspecting the infringement of the provisions of this paragraph [that regulates the public offer of financial products] or of the relative implementing regulations’;

HAVING CONSIDERED that, given the above-mentioned circumstances, the provision identified above must be adopted with urgency;

HEREBY RESOLVES:

As a precautionary measure, to suspend for a period of 90 days, the offer by Tessline Limited of investments of a financial nature to the public resident in Italy, also promoted through the www.tessline.com website.

This Resolution shall be brought to the attention of those whom it concerns and will be published in the CONSOB Bulletin.

This measure may be appealed before the Regional Administrative Court of Lazio within 60 days of the date of service.

May 29, 2019

THE CHAIRMAN
Paolo Savona