News of the week:
Consob issues a warning on convertible bonds (POCs): high risk of loss of capital, depreciation of securities and dilution
Consob and the Bank of Italy issue a warning on the extension of the national transition period for adaptation to Micar and the publication of the EBA's opinion on the interconnection between Micar and Psd2
Focus on the customer: this is the priority objective of producers and distributors of financial instruments - In its latest Research Paper, Consob confirms the cornerstones of the European regulations on investor protection
Watch for Scams! Abusive financial services: Consob blacks out 3 abusive websites
Consob transposes the Guidelines issued by the ESMA relating to the enforcement of sustainability reporting standards ("Glesi")

Commission decisions

- NEWS OF THE WEEK -

High risk of loss of invested capital, strong depreciation of the securities concerned which, based on the experience gained over the last three and a half years, has reached an average of 80%, dilution of shareholder participation with peaks between 60% and 80%: these are some of the risks highlighted by Consob in a Warning addressed to investors who sign up to the so-called non-standard POCs, i.e. convertible bonds issued in favour of a single subject.

These are extraordinary financial transactions that are mostly used by companies that have serious capital and balance sheet imbalances, in an attempt to adopt a last-resort instrument for sourcing new financial resources.

Empirical observation from 2022 to date shows that in almost all cases the use of non-standard POCs has not prevented the worsening of the company situation, which in some cases has further deteriorated to the point of requiring the initiation of bankruptcy or liquidation proceedings. At the same time, shareholders suffered heavy capital losses and a drastic dilutive effect in their capital.

In light of the analyses carried out, Consob therefore warns current and potential investors of the risks associated with non-standard POCs and, in particular, to the risk of depreciation of the issuers' shares, the consequent loss of invested capital and the dilutive effects on the shareholding structure.

On the other hand, internal control bodies are asked to maintain a high level of vigilance on the use of non-standard POCs, to ensure that the corporate decision-making process regarding the use of these instruments takes place through transparent procedures suitable for making decisions that are aware of and consistent with the corporate interests.

In addition, Consob has adopted a Communication that updates and replaces that of May 2023 in which - within the framework of the requirements already in force - the standards of information transparency required of companies are improved.

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On 2 July, Consob and the Bank of Italy published the Warning in question. On 30 June, Decree Law 95/2025 was published in the Official Journal, which extended the national transition regime for VASPs (Virtual Asset Service Providers) registered in the Virtual Currency Operators Register kept by the OAM. In particular, operators that already benefit from the transition regime may continue to operate for a further period of six months – i.e. until 30 December 2025 – pursuant to the regulations currently laid down in Legislative Decree no. 141 of 2010 and the related implementing provisions. In addition, provided that: (i) they submit an application for authorisation in Italy or in another Member State, by 30 December 2025, as crypto-asset service providers ("Casp") pursuant to Regulation (EU) 2023/1114 (Micar), or (ii) they belong to the same group as a company that has submitted an application by the same date, the same operators may continue to operate pending the completion of the authorisation procedure, until the issue or rejection of the same and in any case no later than 30 June 2026. The deadline within which all subjects registered in the register kept by the OAM must inform customers and make known via the web how they intend to conform their operations to the Micar or, alternatively, if they do not intend to submit an application for authorisation to operate as a Casp, how they intend to manage the orderly closure of existing relationships has also been postponed to 30 September 2025 (and not 31 May 2025). Therefore, any additions and/or updates to the plans and measures that should have been notified and published by 31 May must be made no later than 30 September.

On this occasion, operators were invited to pay particular attention to the Opinion, published on 10 June by the EBA, after consultation with the ESMA, which regulates the interconnection profiles between the Micar and the Payment Services Directive (Psd2).

The Opinion – responding to a request from the European Commission – deals with the cases of crypto-asset services provided in relation to electronic money tokens (EMT). Given that EMTs have a dual nature of crypto-assets under Micar and funds under Psd2, the provision of the following crypto-asset services requires the application of Psd2 rules:

i) transfer of EMTs on behalf of customers;

ii) custody and administration of EMTs in the event that the custodial wallet allows EMT transfers to be made and received.

The Opinion also specifies that the activity of a CASP that brokers the purchase of crypto-assets with EMTs does not constitute a payment service.

With reference to the authorisation profiles, the Opinion clarifies that CASPs intending to provide the aforementioned services must, no later than 2 March 2026:

a) also be authorised to provide payment services pursuant to Psd2 or alternatively

b) operate in partnership with a payment service provider (PSP) already authorised under Psd2.

In order to facilitate the adaptation to the provisions of the Opinion, operational indications will be provided for the submission of applications as PSP pursuant to Psd2.

***

To ensure an orderly adaptation to the new regulations, operational indications have been provided to stakeholders from time to time, both through general communications and through specific discussions. In light of the recent extension of the transition regime, the Authorities consider it appropriate to underline the need for the operators concerned to submit applications for authorisation in a timely and accurate manner, in order to guarantee an orderly transition to the new regime. The Authorities remain willing to continue discussions with these operators.

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The customer is the priority objective of producers and distributors of financial instruments.

Those who design and offer investment products to the public must always have as their baseline reference the need to define the customer identikit, for example in terms of risk profile, time horizon, capital availability, so that supply actually corresponds to demand from the initial design phase until placement.

This is one of the cornerstones of the European regulation on investment services (MiFID 2), which is strongly underlined by Consob in its latest Research Paper entitled "The target market in the regulation of product governance as a safeguard for retail investors".

The authors, Michele Siri (University of Genoa), Fiamma Cambiano and Dario Colonnello (Consob), analyse the role of producers and distributors in product governance, which is a key aspect for investor protection, particularly in the retail sector.

When designing the various instruments to launch on the financial market, producers must identify the "theoretical or potential" customers to whom to allocate them on the basis of characteristics such as financial skills, capital level and risk appetite. Similarly, they must identify customers for whom certain products are not suitable. The same also applies to intermediaries who have a direct relationship with investors in the phase of distribution of products to "real or actual" customers.

The Research Paper also reconstructs the activities carried out by the ESMA (European Securities and Markets Authority) and the practical experience of some Member States (Germany, France and the Netherlands). The investigation shows that there are still differences between various European countries, a high rate of formalism in some processes as well as difficulties in identifying products that offer real added value to investors.

Recent European initiatives such as the RIS (Retail Investment Strategy) and the SIU (Savings and Investments Union) aim to remove these obstacles. The Research Paper also clarifies that new technologies can contribute to greater simplification and efficiency of processes.

Investor protection is and remains the necessary requirement for increasing their participation in the European financial market. This is particularly true in the turbulent phase of the current geopolitical context.

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Consob ordered the blackout of 3 new websites abusively offering financial services.

The Authority availed itself of the powers deriving from the "Decreto crescita" ("Growth Decree"; Law no. 58 of 28 June 2019, Article no. 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 websites Consob has ordered to be blacked out:

- "Indexswiss" (website www.indexswiss.com and related page https://client.indexswiss.com);

- "Fusion4Markets" (website https://fusion4marketsltd.com and related page https://client.fusion4marketsltd.com);

- "MGLuxembourg" (website https://mgluxembourg.cm and pages https://client.mgluxembourg.cm and https://webtrader.mgluxembourg.cm).

The number of websites 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 1369.

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, it can take several days for the blackout to come into effect.

Consob draws investors' attention to the importance of adopting the greatest diligence in order to make informed investment choices, adopting common sense behaviors, essential to safeguard their savings: these include, for websites that offer financial services, checking in advance that the operator with whom they are investing is authorized, and, for offers of financial products, that a prospectus has been published.

To this end, Consob would remind you 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 unauthorized initiatives.

Consob has also prohibited the offering activity to the public resident in Italy carried out also through the website https://forti-card.com by "FortiCard Limited" (resolution no. 23625 of 2 July 2025).

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The Glesi Guidelines, issued by the European Securities and Markets Authority (ESMA) and implemented by Consob, define the enforcement of sustainability reporting standards and their scope of application, establish the characteristics that supervisory authorities should have, describe the selection techniques that should be applied and other methodological aspects.

They also illustrate the types of measures taken by the supervisory authorities and the coordination activities carried out by ESMA.

The Guidelines apply to the enforcement of sustainability disclosure standards for reports published from 1 January 2025, in the annual financial reports as required by Article 154-ter, paragraph 1-quater, of Legislative Decree no. 58/98 ("Consolidated Law on Finance").

The Guidelines are available on Consob's official website, along with the full text of the "Final Report" (containing the summary of the responses to the consultation and ESMA's subsequent comments), which are helpful to ensure the correct application of the Guidelines.

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- The document relating to the full voluntary takeover bid launched by Banca Monte dei Paschi di Siena Spa on the ordinary shares of Mediobanca-Banca di Credito Finanziario Spa (resolution no. 23623 of 2 July 2025) has been approved pursuant to Article 102, paragraph 4, of Italian Legislative Decree no. 58/98 (TUF).

- The document relating to the full mandatory takeover bid launched by Octagon BidCo Spa, pursuant to Articles 102 and 106, paragraph 1, of the Consolidated Law on Finance, on Bialetti Spa shares has been approved (resolution no. 23624 of 2 July 2025).

- The supplement to the prospectus, drawn up in tripartite format, relating to the offer of the ordinary shares of Unicredit Spa resulting from the capital increase serving the public exchange offer concerning the Banco Bpm Spa shares and the supplement to the offer document has been approved (decision of 2 July 2025).

- The supplement to the registration document of Iccrea Banca Spa, relating to the offer of non-equity securities to retail investors has been approved (decision of 2 July 2025).

- The information note relating to the programme for the public offering of Leverage Certificates issued by FinecoBank Spa has been approved (decision of 2 July 2025).

Order, pursuant to Article 7-octies, letter b) of Italian Legislative Decree no. 58 of 24 February 1998 (Consolidated Law on Finance) to cease infringement of Article 18 of said Consolidated Law on Finance, put in place by:

- "Indexswiss" via the website www.indexswiss.com and its page https://client.indexswiss.com (resolution no. 23628 of 2 OctoberJuly 2025);

- "Fusion4Markets" via the website https://fusion4marketsltd.com and its page https://client.fusion4marketsltd.com (resolution no. 23627 of 2 July 2025);

- "MGLuxembourg" via the website https://mgluxembourg.cm and pages https://client.mgluxembourg.cm and https://webtrader.mgluxembourg.cm (resolution no. 23626 of 2 July 2025).

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