Weekly newsletter - year XXVII - No. 19 - May 17, 2021 - CONSOB AND ITS ACTIVITIES
Newsletter
News of the week:
Abusive financial services: Consob blacks out 5 abusive sites
SAVE THE DATE: Consob's annual meeting with the financial market to be streamed live at 11.00 am on Monday 14 June 2021
Cyber security – The G7 Cyber Expert Group (CEG) has published an occasional paper: "Proposal for a common categorisation of IT incidents"
Voluntary scheme for the publication of the Non-financial Statement (NFS): outcome of consultation published
Takeover bid promoted by Fly Srl on shares Carraro Spa: Consob approves the bid document
SAVE THE DATE - Financial Data Portability: Presentation of the Consob notebook of the Fintech series
Eureka!: digital borders. Consob webinar cycle, third seminar
Investor protection warnings from other regulatory authorities
INVESTOR PROTECTION WARNINGS FROM OTHER REGULATORY AUTHORITIES
- NEWS OF THE WEEK -
Consob has ordered the black-out of 5 new websites that offer financial services illegally.
The commission availed itself of the new powers resulting from the "Decreto Crescita" ("Growth Decree"; Law no. 58 of 28 June 2019, article 36, paragraph 2-terdecies), on the basis of which Consob can order internet service providers to block access from Italy to websites offering financial services without the proper authorization.
Below are the sites Consob has ordered to be blacked out:
- TradeED Group Ltd (sito internet https://luxeeforex.com);
- Momentum Investment Group Ent Ltd (website www.invest-moment.com and its page https://client.invest-moment.com);
- Nab Europe Limited (sito internet www.nabeuropelimited.com);
- Uniteex Inc e Demure Consulting Ltd (website www.uniteex.co and its page https://client.uniteex.co);
- Donnybrook Consulting Ltd (website www.optimarket.co and page https://optimarket.trade).
The number of sites blacked out since July 2019, when Consob got the power to order that the websites of fraudulent financial intermediaries be blacked out, has thus risen to 446.
The measures adopted by Consob can be consulted on the website www.consob.it.
The black-out of these websites by internet service providers operating on Italian territory is ongoing. For technical reasons, the actual blackout may take a few days. Consob draws investors’ attention to the importance of adopting the greatest diligence in order to make informed investment choices, adopting common sense behaviours, essential to safeguard one’s savings: these include, for websites that offer financial services, checking in advance that the operator with whom you are investing is authorised, and, for offers of financial products, that a prospectus has been published.
To this end, Consob would remind that on the website www.consob.it there is a section on the homepage “Watch for scams!”, providing useful information to warn investors against financially abusive initiatives.
Consob President Paolo Savona's speech on the occasion of Consob's annual meeting with the financial market will be held at 11.00 am on Monday 14 June 2021.
Appointment on the Consob website for direct streaming.
Ten financial authorities, including Consob, participating in G-7 Cyber Expert Group (CEG) representing six G-7 jurisdictions, collaborated on a proposal for a common classification of cyber malicious incidents (cyber attacks) and other cybersecurity incidents. The proposal is described in an Occasional Paper - "Proposal for a common categorisation of IT incidents" and responds to the request made by Finance Ministers and Central Bank Governors during the G-7 Finance Track meeting in Chantilly in July 2019.
The objective of the proposal is to promote, through the definition of common principles and the development of a shared taxonomy, the harmonisation of incident reporting, provided for in different frameworks, which authorities require from financial institutions. The adoption of common principles and a common taxonomy would make incident reporting more robust and effective, facilitating a common understanding of incidents, information sharing and joint management of cyber crises of international scope. The participating authorities have taken into account in their proposal the comments made by representatives of the respective financial sectors.
Consob has published on the Institute's website the Report summarising the outcomes of the consultation on the call for evidence.
On 1 September 2020, a call for evidence containing a series of questions addressed to market participants was published in order to collect information on the reasons for the failure to disseminate non-financial reporting on a voluntary basis (see "Consob Informa" n. 31/2020 of 7 September 2020).
Legislative Decree no. 254 of 30 December 2016 has in fact transposed Directive 2014/95/EU (disclosure of non-financial and diversity information) into our legal system in order to promote greater transparency on the impacts and policies applied with reference to non-financial issues. The decree provided that persons other than those required under the decree may, on a voluntary basis, publish a Non-financial Statement (NFS), affixing the "declaration of conformity" of the same on the statement, if it is drawn up in compliance with the provisions of the decree, in particular with regard to the certification of the person in charge of the audit pursuant to Article 3, paragraph 10.
The provision of a voluntary regime for non-financial reporting has the advantage of avoiding the imposition on a generalised basis of the costs associated with the preparation and publication of the information, while at the same time allowing interested companies to survey and inform about their risks and sustainability characteristics through a standardised report recognised by national and EU law. Nevertheless, the number of issuers that have joined the voluntary NFS publication regime is still small.
The replies given to the consultation provided useful elements for the assessment of the burdens and benefits associated with the publication of the NFS by companies not currently subject to this obligation. The results of the Report may constitute an analysis tool for operators who intend to embark on a path of approximation to non-financial reporting.
The evidence acquired may also provide useful elements to the national legislator, both with regard to the concrete application of the regime provided for by the decree for voluntary NFS, and with regard to the choices to be made in the context of the European negotiation that has been recently started regarding the revision of Directive 2014/95 /EU on the publication of non-financial information.
Consob has approved the bid document relating to the voluntary global takeover bid promoted, pursuant to articles 102 et seq. of Legislative Decree no. 58/1998, by Fly Srl, on shares issued by Carraro Spa (resolution no. 21848 of 13 May 2021).
The bid is aimed at obtaining the revocation of the shares issued by Carraro Spa ("Carraro" or the "Issuer") from the listing on the MTA (delisting).
Fly Srl (the "Bidder"), is a company incorporated on 22 March 2021 indirectly controlled, through Finaid Spa ("Finaid"), by Enrico and Tomaso Carraro, respectively Chairman and Vice Chairman of the Board of Directors of the Issuer. Pursuant to Article 101-bis, paragraph 4-bis, letter a) of the Consolidated Law on Finance, Finaid, Enrico and Tomaso Carraro, as well as Julia Dora Koranyi Arduini, are persons acting in concert with the bidder as they are all members of the co-investment agreement containing shareholders' agreements.
Carraro is a holding company at the head of an international group that is a world leader in highly efficient and eco-friendly power transmission systems.
Its share capital, equal to 41,452,543.60 euros, is divided into 79,716,430 ordinary shares, listed on MTA. The issuer, since 2014, falls within the definition of SME pursuant to Article 1, paragraph 1, letter w-quater.1) of the Consolidated Law on Finance and Article 2-ter of the Issuers' Regulation.
The bid concerns a maximum of 21,331,916 Carraro shares, representing 26.76% of Carraro's capital, corresponding to all the issuer's ordinary shares deducted
(i) 55,757,526 Carraro shares, representing approximately 69.94% of the share capital of the issuer, owned by the shareholders of the bidder (and in particular Enrico and Tomaso Carraro, Finaid and Julia Dora Koranyi Arduini) and (ii) 2,626,988 treasury shares, representing approximately 3.30% of the share capital of the issuer, for a maximum outlay of approximately 51.2 million euros.
A consideration of 2.40 euro will be paid for each share tendered in acceptance of the bid. The total maximum outlay of the bid, calculated in the event of total acceptance of the bid based on the number of shares involved in the bid, is equal to 51,196,598.40 euro.
The period of adherence to the offer, agreed with Borsa Italiana, begins on 17 May and will end on 4 June 2021, inclusive, unless extended.
The bid is subject to the fact that the adherences are such as to allow the bidder to come to hold, together with the persons acting in concert, a total shareholding of at least 95% of the share capital of the issuer (the "condition of effectiveness").
In the event that the condition of effectiveness does not occur at the end of the period of adherence (as extended), the bidder may waive it if the percentage reached exceeds 90% of the issuer's share capital (the "minimum waiver threshold").
In the event of non-fulfilment of the condition of effectiveness and non-renunciation by the bidder of the same condition of effectiveness, the bid will not be finalised. In such a case, any shares brought into adherence to the bid will be made available to the participants, through the depositary intermediaries, within the first trading day following the date on which the non-fulfillment of the aforementioned condition will be notified.
As mentioned above, the bid is aimed at obtaining the delisting of the issuer and, therefore, the bidder has stated that if the threshold of 90% of the share capital is exceeded, he will not restore a sufficient float to ensure the smooth progress of the trading of the issuer's shares.
In this circumstance, the obligation to purchase the remaining Carraro shares from the shareholders of the issuer who request it, pursuant to Article 108, paragraph 2, of the Consolidated Law on Finance (the "purchase obligation pursuant to Article 108, paragraph 2, of the Consolidated Law on Finance"), jointly and severally borne by the bidder and persons acting in concert, will be fulfilled by the bidder at a consideration that will be determined by Consob equal to the consideration of the bid, pursuant to the combined provisions of Article 108, paragraph 4, of the Consolidated Law on Finance and Article 50, paragraph 4, letter c) of Consob Regulation no. 11971/1999 ("Issuers Regulation").
In the event that, upon the outcome of the bid, the bidder and the persons acting in concert come to hold a total shareholding greater than or equal to 95% of the share capital of the issuer, the bidder has declared that he will avail himself of the right to purchase the remaining outstanding shares, pursuant to and for the purposes of Article 111 of the Consolidated Law on Finance (the "right to purchase"), at a consideration equal to that of the bid.
The bidder, by exercising the right to purchase, will, also on behalf of the persons acting in concert, fulfil the obligation to purchase pursuant to Article 108, paragraph 1, of the Consolidated Law on Finance (the "purchase obligation pursuant to Article 108, paragraph 1, of the Consolidated Law on Finance") in relation to the shareholders of the issuer who have requested it, by thus carrying out a single procedure (the "joint procedure").
The press release referred to in Article 103, paragraph 3, of the Consolidated Law on Finance and Article 39 of the Issuers Regulations, together with the opinion of the independent directors and the fairness opinions issued by the financial advisors, is attached to the bid document.
Consob has approved the bid document relating to the voluntary global takeover bid promoted, pursuant to articles 102 et seq. of Legislative Decree no. 58/1998, by Fly Srl, on shares issued by Carraro Spa (resolution no. 21848 of 13 May 2021).
The bid is aimed at obtaining the revocation of the shares issued by Carraro Spa ("Carraro" or the "Issuer") from the listing on the MTA (delisting).
Fly Srl (the "Bidder"), is a company incorporated on 22 March 2021 indirectly controlled, through Finaid Spa ("Finaid"), by Enrico and Tomaso Carraro, respectively Chairman and Vice Chairman of the Board of Directors of the Issuer. Pursuant to Article 101-bis, paragraph 4-bis, letter a) of the Consolidated Law on Finance, Finaid, Enrico and Tomaso Carraro, as well as Julia Dora Koranyi Arduini, are persons acting in concert with the bidder as they are all members of the co-investment agreement containing shareholders' agreements.
Carraro is a holding company at the head of an international group that is a world leader in highly efficient and eco-friendly power transmission systems.
Its share capital, equal to 41,452,543.60 euros, is divided into 79,716,430 ordinary shares, listed on MTA. The issuer, since 2014, falls within the definition of SME pursuant to Article 1, paragraph 1, letter w-quater.1) of the Consolidated Law on Finance and Article 2-ter of the Issuers' Regulation.
The bid concerns a maximum of 21,331,916 Carraro shares, representing 26.76% of Carraro's capital, corresponding to all the issuer's ordinary shares deducted
(i) 55,757,526 Carraro shares, representing approximately 69.94% of the share capital of the issuer, owned by the shareholders of the bidder (and in particular Enrico and Tomaso Carraro, Finaid and Julia Dora Koranyi Arduini) and (ii) 2,626,988 treasury shares, representing approximately 3.30% of the share capital of the issuer, for a maximum outlay of approximately 51.2 million euros.
A consideration of 2.40 euro will be paid for each share tendered in acceptance of the bid. The total maximum outlay of the bid, calculated in the event of total acceptance of the bid based on the number of shares involved in the bid, is equal to 51,196,598.40 euro.
The period of adherence to the offer, agreed with Borsa Italiana, begins on 17 May and will end on 4 June 2021, inclusive, unless extended.
The bid is subject to the fact that the adherences are such as to allow the bidder to come to hold, together with the persons acting in concert, a total shareholding of at least 95% of the share capital of the issuer (the "condition of effectiveness").
In the event that the condition of effectiveness does not occur at the end of the period of adherence (as extended), the bidder may waive it if the percentage reached exceeds 90% of the issuer's share capital (the "minimum waiver threshold").
In the event of non-fulfilment of the condition of effectiveness and non-renunciation by the bidder of the same condition of effectiveness, the bid will not be finalised. In such a case, any shares brought into adherence to the bid will be made available to the participants, through the depositary intermediaries, within the first trading day following the date on which the non-fulfillment of the aforementioned condition will be notified.
As mentioned above, the bid is aimed at obtaining the delisting of the issuer and, therefore, the bidder has stated that if the threshold of 90% of the share capital is exceeded, he will not restore a sufficient float to ensure the smooth progress of the trading of the issuer's shares.
In this circumstance, the obligation to purchase the remaining Carraro shares from the shareholders of the issuer who request it, pursuant to Article 108, paragraph 2, of the Consolidated Law on Finance (the "purchase obligation pursuant to Article 108, paragraph 2, of the Consolidated Law on Finance"), jointly and severally borne by the bidder and persons acting in concert, will be fulfilled by the bidder at a consideration that will be determined by Consob equal to the consideration of the bid, pursuant to the combined provisions of Article 108, paragraph 4, of the Consolidated Law on Finance and Article 50, paragraph 4, letter c) of Consob Regulation no. 11971/1999 ("Issuers Regulation").
In the event that, upon the outcome of the bid, the bidder and the persons acting in concert come to hold a total shareholding greater than or equal to 95% of the share capital of the issuer, the bidder has declared that he will avail himself of the right to purchase the remaining outstanding shares, pursuant to and for the purposes of Article 111 of the Consolidated Law on Finance (the "right to purchase"), at a consideration equal to that of the bid.
The bidder, by exercising the right to purchase, will, also on behalf of the persons acting in concert, fulfil the obligation to purchase pursuant to Article 108, paragraph 1, of the Consolidated Law on Finance (the "purchase obligation pursuant to Article 108, paragraph 1, of the Consolidated Law on Finance") in relation to the shareholders of the issuer who have requested it, by thus carrying out a single procedure (the "joint procedure").
The press release referred to in Article 103, paragraph 3, of the Consolidated Law on Finance and Article 39 of the Issuers Regulations, together with the opinion of the independent directors and the fairness opinions issued by the financial advisors, is attached to the bid document.
On 8 June, from 9:30 am to 12:00 pm, a conference will be held to present Consob's new Fintech Notebook on "Financial Data Portability".
The work will be opened by Consob President Paolo Savona.
This will be followed by the introduction by Anna Genovese (Consob Commissioner) and Valeria Falce (Current professor of Economic Law, European University of Rome).
The work will be moderated by Paolo Ciocca (Commissioner Consob).
Attendance is free of charge, but attendees are asked to register online: https://www.consob.it/web/area-pubblica/iscrizione-seminari.
The event will be streamed on the GoToMeeting platform; the link will be sent close to the event to those who have registered.
The fourth seminar of the webinar cycle entitled "Consob – Eureka!" on the topics of artificial intelligence applicable to the field of financial market regulation and supervision will be held today, 24 May, from 4.00 pm to 5.30 pm.
The fourth seminar, entitled "Artificial Intelligence and Markets" will be held by Prof. Tomaso Aste (UCL - University College London).
Participation in the webinars is reserved for Consob employees and those of other financial sector institutions (Bank of Italy, IVASS, etc.) that have been involved through institutional channels.
The supervisory authorities of the United Kingdom (Financial Conduct Authority - FCA), Luxembourg (Commission de Surveillance du Secteur Financier - CSSF), Switzerland (Swiss Financial Market Supervisory Authority - FINMA), Romania (Financial Supervisory Authority, Romania - FSA), Ireland (Central Bank of Ireland - CBI), Norway (The Financial Supervisory Authority of Norway - Finanstilsynet), Spain (Comisión Nacional del Mercado de Valores - CNMV), and Quebec (Authorité des Marchés Financiers - AMF - Quebec) report the companies and websites offering investment, financial and insurance services without the required authorisations.
Reported by the FCA:
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www.ukfixedsavings.co.uk;
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www.compareratesuk.com;
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www.hisbonds.co.uk;
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Solutions4Savings (https://solutions4savings.co.uk);
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Fixed Rate Finder (www.fixedratefinder.co.uk);
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Nagashima Sakai (www.nagashimasakai.com);
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Fixed Rate Returns (www.fixedratereturns.com);
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Miles Capital Corporation LLC (www.milescapitalcorp.com);
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Rio Solar Energy (https://riosolarenergy.co.uk);
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www.myinvestmentoptions.co.uk;
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Interlink Capital Group Ltd (http://www.interlinkcapitalgroup.com);
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Bondratesuk.uk (www.bondratesuk.uk);
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Comparedbonds.uk (www.comparedbonds.uk).
Reported by the CSSF:
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Riva Financial Systems (www.rivafinancialsystems.com);
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www.secure.octogone-europe-sa.com, clone of a licensed company;
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Auris (www.auris-prevoyance.com);
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www.eurostone-srio.com, clone of a licensed company.
Reported by FINMA:
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ChanJelly (https://chanjelly.com);
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J. Investment Company (www.ji.company);
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Celiumfx (www.celiumfx.com);
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Royal C Bank / Royal Bank (https://www.royalcbank.com).
Reported by the FSA:
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Algorithm Invest Corporation (https://algoinvest.pro);
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Cg Vestor Facility Srl (https://vestor.ro).
Reported by the CBI:
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InvestTeck (www.investteck.net). Previously reported by the FCA (see "Consob Informa" no. 28/2020 of 20 July 2020) and by the CMVM (see "Consob Informa" no. 42/2020 of 23 November 2020);
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Fx Leader (https://www.fx-leader.com).
Reported by Finanstilsynet:
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3B Hm Invest As;
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INVEBTC (https://invebtc.com).
Reported by the CNMV:
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Starkmarkets (https://starkmarkets.io).
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Konstos Markets Ltd (https://stockcore.co). Already the subject of Consob resolution no. 21794 of 8 April 2021. Subsequently, the authority using its powers deriving from the "Decreto Crescita" (Growth decree) (Law no. 58 of 28 June 2019, article 36, paragraph 2-terdecies), ordered internet service providers to block access from Italy to the website www.stockcore.com (see "Consob Informa" no. 14/2021 of 12 April 2021);
Acetopfinancial / Fx Publications, Inc / The Capital Holding Llc (http://acetopfin.com);
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https://www.cfxdtrade.com;
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https://www.eafi-gestion.com, clone of a licensed company;
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Geverestfx (https://geverestfx.com). With reference to this entity, Consob using its powers deriving from the "Decreto Crescita" (Growth decree) (Law no. 58 of 28 June 2019, article 36, paragraph 2-terdecies), ordered internet service providers to block access from Italy to the website https://geverestfx.com and its page accounts. geverestfx.com. (see "Consob Informa" no. 17/2021 of 3 May 2021);
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https://www.goldingfx.net.
The Authorité des Marchés Financiers - AMF – Quebec has published on its website the following notice to savers, which is summarised here:
"Initial coin offerings are very risky and highly volatile investments that exist in an environment that makes them susceptible to manipulation and fraud.
Coins are created using easily accessible technology and are marketed on decentralised exchanges, without any intervention or authorisation from third parties. A quick internet search is enough to find sites that explain how to create coins and how to make them available in just a few minutes for blockchain trading. This situation is encouraging the proliferation of coins on the Internet whose promoters attract investors by promising them huge returns on investment projects. Many of these coins are available from decentralised platforms, which operate without any human intervention.
AMF and its IT surveillance team are making vigorous efforts to detect fraudulent projects at an early stage. However, the enormous size of the internet and the use of social networks, including Instant Messaging Apps that allow the creation of private chat groups, often make it impossible for regulators to intervene in advance.
The AMF also recalls that entities that intend to raise capital through IT assets must comply with the regulatory requirements applicable to securities and derivatives. Failure to do so will result in criminal prosecution or penalties.
The AMF therefore asks those who are planning an ICO to inquire about their legal obligations and to ensure that they operate in compliance with applicable regulations.
The AMF also reminds people and companies that operate platforms that exchange cryptographic assets that are securities or derivatives, which are also subject to current regulations on securities and derivatives.
Again, failure to comply with these regulations could lead to legal proceedings and sanctions.
Finally, AMF urges the public, in particular young people, many of whom currently seem attracted to projects that promise large and rapid profits, to proceed with extreme caution, especially when considering cryptocurrencies. Unfortunately, such projects often turn out to be scams or, at best, excessively risky investments."
- The bid document relating to the voluntary takeover bid promoted, pursuant to articles 102 et seq. of Italian Legislative Decree no. 58/1998, by Fly Srl on shares issued by Carraro Spa (resolution no. 21848 of 13 May 2021) has been approved.
Order, pursuant to art. 7-octies, letter b) of Italian Legislative Decree no. 58 of 24 February 1998 (Consolidated Law on Finance) to cease infringement of art. 18 of said Consolidated Law on Finance, put in place by:
- TradeED Group Ltd through the website https://luxeeforex.com (resolution no. 21846 of 12 May 2021);
- Momentum Investment Group Ent Ltd through the website www.invest-moment.com and its page https://client.invest-moment.com (resolution no. 21844 of 12 May 2021);
- Nab Europe Limited through the website www.nabeuropelimited.com (resolution no. 21843 of 12 May 2021);
- Uniteex Inc and Demure Consulting Ltd through the website www.uniteex.co and its page https://client.uniteex.co (resolution no. 21845 of 12 May 2021);
- Donnybrook Consulting Ltd through the website www.optimarket.co and page https://optimarket.trade (resolution no. 21842 of 12 May 2021).