Newsletter - CONSOB AND ITS ACTIVITIES
Newsletter
News of the week:
Abusive financial services: Consob blacks out 4 abusive sites
Covid-19 and measures to support the economy: reminder on the information to be provided by supervised issuers, supervisory bodies and audit
firms
Covid-19: reminder on the persistence of the impacts of the coronavirus emergency on the obligations of online portal operators
ESMA: risks for retail investors of equity trading conditioned by social media
Ipo Philogen Spa: Consob approves the listing prospectus
Aedes SIIQ Spa: Consob approves the prospectus for the offer and trading of new shares
Investor protection warnings from other regulatory authorities
- NEWS OF THE WEEK -
Consob has ordered the black-out of 4 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:
- Empirecfd Limited (website www.empirecfd.com - and its page https://crm.empirecfd.com);
- Empire Capital LLC (website https://27proquote.com);
- Kiqiwk Holdings Intl Limited (website www.solutionsmarkets.io);
- HB Enterprises OU and Fina Holding Incorporated (website www.forexone.co and its page https://client.forexone.co).
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 385.
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 black-out 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 behaviours, 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 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 draws attention (Reminder no. 1/2021 of 16 February 2021) to the information to be provided:
- by supervised issuers, supervisory bodies and audit firms in relation to the 2020 financial statements prepared in accordance with international accounting standards;
- by companies that publish 2020 non-financial statements;
- by issuers with listed shares and supervisory bodies at meetings to deliberate on the capital;
- by those responsible for drafting the offer documents and prospectuses;
- by issuers subject to the regulations of the Market Abuse Resolution - MAR.
In particular, the Commission, with regard to the information that supervised issuers must provide when preparing the 2020 financial statements, calls on them to consider the provisions of the ESMA document, the European Financial Markets Supervisory Authority, on the common European enforcement priorities for 2020 of 28 October 2020 ("European common enforcement priorities for 2020 annual financial reports") which, in light of the consequences of the Covid pandemic - 19, highlights four thematic areas of particular importance for the preparation of the financial statements (International Accounting Standards - Ias 1 "Presentation of the financial statements"; Ias 36 "Impairment of assets"; International Financial Reporting Standards-Ifrs 9 "Financial instruments" and Ifrs 7 "Financial instruments: Disclosures"; Ifrs 16 "Leasing").
In this context, the Commission considers that particular attention should be paid to the planning process taking into account the possible impacts on business objectives and risks arising from the pandemic, the use of economic support measures and their possible interruption. Issuers must ensure that financial statements based on business plans are consistent with each other.
Consob also reminds the supervisory bodies strengthen information flows with the board of directors responsible for preparing the draft financial statements as well as to promote effective and timely communication with the auditors, to ensure the mutual exchange of information useful for the performance of their respective duties, also pursuant to Article 150, paragraph 3, of the Consolidated Law on Finance.
In carrying out audit procedures, auditors should pay particular attention to the impacts that may result from uncertainties related to the effects of the pandemic and the loss of economic support measures, such as to further increase the level of judgement inherent in budgetary assessments and to this end raise the level of professional scepticism to make it appropriate to the circumstances.
Consob considers it necessary that the administrative and supervisory bodies and the auditors of the companies that publish the non-financial statements, each to the extent of its competence, must also consider the indications provided by ESMA in the document on supervisory priorities.
With regard to the public offering/admission to trading prospectuses for financial instruments as well as the related supplements, Consob calls on the persons responsible for preparing them to provide updated information on business plans and the impact on prospective management dynamics resulting from the exacerbation/continuation of the pandemic, indicating the assumptions made about the duration of the pandemic and the discontinuation of economic support measures. The sensitivity analysis of the plan must take into account, where necessary, different possible scenarios in order to adequately reflect the risk associated with the evolution of the Covid-19 pandemic.
The public purchase or exchange offer documents must contain information on the known impacts of the COVID-19 pandemic in progress on the specific business of the offeror and the group to which it belongs, on the related prospects and on future plans drawn up in relation to the offer; the issuer's press release must also contain information of any impacts of the COVID-19 pandemic and the lack of measures to support the economy.
In this context, Consob also considers it necessary that the issuers, in view of meetings convened to resolve on capital increases, provide in the explanatory information reports with reference to: a) the simplified decision-making quorums temporarily provided for (until 30 June 2021); b) the hypothesis in which the issuer intends to make use of the power to resolve the share capital increase through new contributions, with the exclusion of option rights, pursuant to Article 2441, fourth paragraph, second sentence, of the Italian Civil Code, as amended by Article 44, paragraph 4, of the Simplification Decree, even in the absence of express statutory provision, within the limits of 20 percent of the pre-existing share capital, with the relative reasons.
Finally, the Commission recalls the usefulness of consulting the Consob Guidelines for the management of inside information, published in October 2017 for the fulfillment of these disclosure obligations.
Consob draws attention to the obligations of online portal operators regarding the persistence of the impacts of the coronavirus emergency (Reminder no. 2/2021 of 16 February 2021).
During 2020, the pandemic resulting from the spread of Covid-19 produced significant economic effects, with potentially greater impacts on the prospects of small and medium-sized enterprises, whose capital raising also takes place through online portals.
On 25 March 2020, Consob published Reminder no. 2/2020 which highlighted the need for portal operators registered in the register pursuant to article 50-quinquies, paragraph 2, of Legislative Decree no. 58 of 24 February 1998 (Consolidated Law on Finance) to consider with due diligence the potential implications that the emergency in place could have determined in terms of investor protection, adopting the consequent measures.
In consideration of the persistence of the pandemic, the Commission emphasised the need for portal operators to adopt the most appropriate measures to ensure the continuity of the activities carried out on the portal as well as to publish promptly any updates provided by the offeror, including information on any significant new facts occurring after the publication of the offer that might influence investment decisions. At the same time, operators should ensure that the information made available to investors in the publication of offers clearly explains the possible effects of the pandemic on the sustainability of the relevant projects.
Similarly to what was carried out in 2020, Consob therefore invites portal operators to describe the measures they have adopted in this regard as well as the related updates in the report on the activities carried out and on their organisational structure pursuant to Article 21, paragraph 3, of the "Regulation on raising capital through online portals" adopted with Resolution no. 18592 of 26 June 2013 and subsequent amendments.
ESMA, the European Union's securities markets regulator, has warned savers with a communication that highlights the risks associated with online trading operations carried out in the wake of informal exchanges of views and recommendations shared on the web and the consequent sharing of trading strategies made artfully public through social networks (www.esma.europa.eu/press-news/esma-news/esma-highlights-risks-retail-investors-social-media-driven-share-trading). The ESMA notice is part of the European authority's strategy to protect savers and retail investors and draws inspiration from recent experiences on US markets, characterised by high price volatility, caused by the sharing of trading information through social media. Without prejudice to the different regulations of the various markets, however, it is not excluded that this dynamic may also occur within the EU.
ESMA, which will continue to monitor the markets to protect investors and the integrity of the markets themselves, nevertheless suggests that operators use reliable information in their investment decisions to avoid or, at least, limit both the risk of significant losses related to price volatility and the danger of market abuse.
Consob has approved the prospectus in tripartite format (registration document, securities note on financial instruments and the summary) relating to the admission to trading on the Mercato Telematico Azionario (MTA) organised and managed by Borsa Italiana Spa of Philogen Spa‘s ordinary shares.
Borsa Italiana issued the order for admission to listing on the MTA on 16 February last.
Philogen is a biotech company, established in 1996, specialized in the discovery and development of biopharmaceutical products for the treatment of serious diseases (mainly cancers).
At the date of the prospectus, the main shareholders of the issuer are: Nerbio Srl 46.3%; Dompé Holdings Srl 34.3%; Matthias Claus Winter 2.130%. The shareholders Nerbio and Dompé Holdings also hold shares with multiple voting rights (three votes per share).
The offer, addressed exclusively to institutional investors, concerns a maximum of 4,061,111 shares, for a maximum indicative value, including any share premium, of approximately 73,099,998 million euros resulting from the share capital increase, excluding option rights, determined by the Board of Directors on 15 February 2021. The bid is subject to the achievement of an amount of gross income of at least 60 million euro.
As part of the agreements that will be stipulated for the institutional placement, Nerbio and Dompé Holdings will grant an over-allotment option to the offer coordinators, also in the name and on behalf of the members of the consortium for the institutional placement, to borrow a maximum of 406,111 additional shares, corresponding to a share of approximately 10% of the number of shares subject to the offer for the purpose of a possible over-allotment within the institutional placement.
Also within the framework of the agreements that will be stipulated for the offer, the issuer will also grant, in favour of the offer coordinators, also in the name and on behalf of the members of the consortium for the institutional placement, a purchase option at the offer price of a maximum of 406,111 shares, corresponding to a share of approximately 10% of the number of shares subject to the institutional placement (so-called greenshoe).
If the greenshoe option is exercised in full, the shares offered will represent, assuming the full placement of the offer and the full exercise of the greenshoe option, a total of 11% of the share capital of the issuer.
The final offer price will be determined at the end of the offer, through the open price mechanism.
The issuer and the selling shareholder, also on the basis of analyses carried out by the coordinators of the offer, for the exclusive purpose of allowing the collection of expressions of interest from institutional investors in the context of the institutional placement, have identified, after consultation with the coordinators of the offer, an indicative valuation range of the economic capital of the issuer, prior to the capital increase (it being understood that the offer is conditional on gross collection of at least 60 million euros to support the implementation of the business plan) at the service of the offer, between EUR 609.2 million and EUR 731 million, equal to a minimum price of EUR 15 per share and a maximum price of EUR 18 per share.
The institutional placement began on 18 February and will end on 26 February 2021, unless extended or closed early, said event to be communicated by the issuer through a press release published on its website (www.philogen.com). The summary results of the offer will be communicated to Borsa Italiana and the market within 5 working days of the closing of the offer period, by means of a specific press release.
Through the transaction, the company intends to acquire the status of listed company so as to add greater visibility on the market and increase its ability to access capital markets, with potential improvement in its ability to develop its activities.
The net income from the offer to institutional investors of the shares resulting from the share capital increase, net of the fees paid to the consortium for institutional placement, will be used by the issuer in support of the strategic objectives.
In the "risk factors" chapter, the prospectus outlines the risks with regard to the issuer and the group it controls, to the operating activities and the sector in which they operate, and to the financial instruments that will be admitted to listing.
Consob has approved the prospectus in tripartite format (registration document, securities note on financial instruments and the summary) relating to the public offering and admission to trading on the Mercato Telematico Azionario (MTA) organised and managed by Borsa Italiana Spa of Aedes SIIQ Spa‘s newly issued ordinary shares.
The issuer was established as a result of the partial proportional demerger of Restart spa, former Aedes SIIQ Spa, in favour of the issuer, which became effective on 28 December 2018. Aedes owns a company complex that carries out - directly and through subsidiaries, associates or equity investments in real estate funds - the activity of leasing properties for commercial use and developing areas for the construction of properties for commercial use (mainly retail) to be leased.
As a result of the Covid-19 pandemic, the Aedes group's income performance has deteriorated significantly, and at the date of the prospectus there are significant uncertainties regarding the going concern perspective of the issuer and the group.
At the date of the prospectus, the share capital of the issuer is equal to 212,000,067.31 euros and is represented by 34,714,156 ordinary shares and 5,316,241 special shares, without voting rights in ordinary meetings called to appoint or revoke the members of the board of directors and convertible into ordinary shares, subscribed by Augusto Spa since 24 July 2020 and not admitted to trading.
At the date of the prospectus, the majority shareholders are:Augusto Spa (47.45%); Vi-Ba (7.92%) and Itinera (4.23%).
On 18 June 2020, the Extraordinary Shareholders' Meeting of the issuer's shareholders resolved:
(i) to increase the paid-in share capital, indivisibly, with the exclusion of pre-emption rights pursuant to Article 2441 of the Italian Civil Code, for a total of EUR 10 million, reserved for subscription by Augusto Spa (the "reserved share capital increase") which was completed on 24 July 2020 by converting a receivable deriving from a shareholder loan disbursed in 2017;
(ii) to grant the Board of Directors, pursuant to Article 2443 of the Italian Civil Code, the power, to be exercised by 31 July 2021, to increase the share capital by one or more times, in divisible form, for cash, for a maximum total amount of € 50,000,000. The capital increase provides for the issue of ordinary shares to be offered as an option to all holders of ordinary shares and the issue of special shares that will be subscribed by Augusto Spa, the only person entitled to exercise the option rights relating to them as the sole holder of this category of shares (the "capital increase").
On 24 April 2020 Augusto Spa undertook to subscribe to its share, equal to 47.45%, calculated on the basis of the shares at the date of the registration document available for the exercise of option rights, for a total amount of 23.7 million euros, to be carried out by offsetting receivables (for a corresponding amount) deriving from shareholder loans subscribed and disbursed in the 2019 financial year.
The offer relates to a maximum of 263,056,888 new shares, of which a maximum of 228,121,590 ordinary shares and a maximum of 34,935,298 special shares, to be offered as an option in the ratio of 46 ordinary shares newly issued for every 7 ordinary shares held and 46 special shares newly issued for every 7 special shares held.
The shares will be offered at a price of € 0.19 (of which € 0.04 to be charged to share capital and € 0.15 to share premium) for each new share. This price incorporates a discount of about 24.23% compared to the theoretical ex-right (Terp) price of the ordinary shares of Aedes, calculated on the basis of the reference price of the Aedes shares as of 15 February 2021.
The option period runs from 22 February to 11 March 2021. The option rights will be tradable on the Stock Exchange from 22 February to 5 March 2021.
The results of the offer will be published within five business days of the end of the option period, by means of a specific announcement.
Option rights not exercised by the end of the option period will be offered by the issuer on the stock exchange within the month following the end of the option period.
The registration document and the information note contain in the relevant chapters "risk factors" the significant and specific risks relating to the issuer and the group and the business sector in which they operate as well as the offer and the listing of the new shares. In particular, the risks associated with the negative economic, equity and financial performance of the group, the uncertainties connected with the spread of the Covid-19 pandemic and the going concern are reported.
INVESTOR PROTECTION WARNINGS FROM OTHER REGULATORY AUTHORITIES
The supervisory authorities of United Kingdom (Financial Conduct Authority - FCA), Hong Kong (Securities and Futures Commission - SFC), Spain (Comisión Nacional del Mercado de Valores - CNMV), Luxembourg (Commission de Surveillance du Secteur Financier - CSSF), Poland (Polish Financial Supervision Authority - KNF), British Columbia (British Columbia Securities Commission - BCSC), Ireland (Central Bank of Ireland - CBI), Switzerland (Swiss Financial Market Supervisory Authority - FINMA), Cyprus (Cyprus Securities and Exchange Commission – CYSEC) report companies and websites that are offering investment, financial and insurance services without the required authorisations.
Reported by the FCA:
- Infinity Financial Services (Tel: 0208 638 5353), clone of a licensed company;
- Itrade Invest (https://itrade-invest.com);
- WDC Markets ( www.wdcmarkets.com);
- Financial Resident ( www.financialresident.com);
- Sports Index (https://www.sportsindex.online);
- Finetero Trading Ltd (www.finetero.com);
- Instaloan Ltd (email: Samanthawoodcock1990@gmail.com), clone of a licensed company;
- Same Day Cash Loan Limited / Same Day Finance Limited / Same Day UK Limited (email: unsecuredandsecuredloans@gmail.com, uklenderteam@gmail.com, customerserviceloandepartment@gmail.com, loanforbadcreditcustomer@gmail.com), clone of a licensed company;
- Phemex (https://phemex.com);
- Fidel Asset Limited (www.fidelity-assetltd.com), clone of a licensed company;
- Trade Toss (www.tradetoss.com);
- WDC Markets (www.wdcmarkets.com). Previously reported by the New Zealand supervisory authority, the FMA (see "Consob Informa" No. 26/2020) and by the Spanish supervisory authority, the CNMV (see "Consob Informa" No. 14/2020);
- Itrade Invest (https://itrade-invest.com);
- Comparison.Co.UK (www.investor-comparison.co.uk);
- Fixed Market Review (www.fixedmarketreview.com);
- Compare Your Way (www.compareyourway.co.uk);
- UK Bond Market (www.ukbondmarket.com);
- Investmentadvisor (www. investmentadvisor-uk.com);
- Solutions Capital G.P. LLC (www.solutions-capitalgpllc.com);
- Bond Investments Uk (www.bondinvestmentsuk.best);
- Blue Chip Compare (www.bluechipcompare.com);
- Grahamalpha (www.grahamalpha.com);
- Fino Capital (https://finocapital.io);
- Wyelands Bank (https://wyelands.online; http://wyelands.eonlnbn.com; www.wyelandsbkinternational.ga; www.wye.onln.co.uk; www.wye.ionlbs.com), clone of a licensed company;
- GFX Royal ( https://www.gfxroyal.com);
- Ark Management (https://www.arkmanagment.com);
- TradersPros / ND Corp Limited (https://traderspros.com);
- Financial Services Redress (Uk) Ltd (email: cassessors@yandex.com);
- Top Bond Invest (www.topbondinvest.com);
- Finding Investments For You (www.findinginvestmentsforyou.co.uk, www.searchforukinvestments.com);
- New Bond Deals (www.new-bonddeals.com, www.new-bond-deals.com);
- Bonds-invest.com (www. bonds-invest.com);
- Find-your-investment.com (www.find-your-investment.com);
- United Asset Finance Ltd (www.united-asset-finance.com), clone of a licensed company;
- Bond Advisor (www.bond-advisor.com);
- The National Investment Guide (www.nationalinvestmentguide.com);
- Good investment advisor group (https://www.giadvisors.uk);
- United Asset Finance Ltd (www.united-asset-finance.com), clone of a licensed company;
- Bit Trading / ABA Exchange (www.bit-trading.com; www.crypto-ecm.com);
- Finance and Service Limited (email: financeandserviceslimited@gmail.com);
- PrimoTrade (https://primotrade.co);
- IroneFX (https://www.ironefx.com);
- Comparebondrates.com (www.comparebondrates.com);
- Republicloans / Republic Loans (www.republicloans.co.uk);
- ChaseBis Limited (https://chasebis.online), clone of a licensed company;
- Oracle Legal Ltd (tel.: 07554 688513; 07234875045; 01618187931; 0785678424; 0785676918; 01618187833).
Reported by the SFC:
- www.henghuafuture.com;
- Jinlong Zhihui Information Technology Limited (www.jinltech.com);
- Insun Forex (www.tradeinsun.com);
- DingSheng International Co. Ltd (www.ds-fx.com);
- The Antrim Group PTE Limited (www.antrim-group.com);
- Investam HK (www.investam-hk.com);
- OBT International Limited (https://obt8.com);
- www.yubo.com.hk, clone of the company authorised by the SFC;
- www.yubo-securities.com, clone of the company authorised by the SFC;
- www.fsjdts.top, clone of the company authorised by the SFC;
- www.hongkongxh.com, clone of the company authorised by the SFC;
Reported by the CNMV:
- Wave Makers LTD (Iqcent) (https://www.iqcent.com);
- Makerun Corp. (Raceoption) (https://raceoption.com);
- Spt Media Llc (https://www.sptoro.com);
- Cryptoseñales (https://cryptosenales.com/es);
- Deal Trade Inc. Ltd (https://dealtrade.io);
- Iamexchange Ou (https://imcoinproject.com/es);
- Teredo Group Ltd (https://kryptohaus.com/es);
- Redfin Capital Ltd / Mister Trader / Mr Trader (https://imrtrader.com);
- Seabreeze Partners Ltd (https://profitassist.io/es);
- Pospix / Bitpix (www.pospix.com);
- https://leoninv.com;
- https://koolcoin.io;
- www.koloonia.com;
- www.autocripto.com.
Reported by the CSSF:
- Ciplo Partners Private Equity (www.ciplopartners.com);
- Banc de Luxembourg (www.bancdeluxembourg.com);
- Obeche Luxembourg / Obeche (www.obeche-invest.com);
- www.access-sa.net.
Reported by the KNF:
- Fundico sp. z o.o (www.pskf.pl, www.prowizja24.pl, www.fundico.eu);
- Zawex sp z o.o. (www.prowizja24.pl, www.fundico.eu).
Reported by the BCSC:
- A.W. Burns Investment Corporation (https://www.awburnsinvestment.com);
- AquilaBIT (https://aquilabit.com). Previously reported by the Swedish supervisory authority, Finansinspektionen – FI (see "Consob Informa" No. 47/2020).
Reported by the CBI:
- Finco Group/ Finco Kredit (http://www.fincokredit.com), clone of a licensed intermediary;
- Swift Finances / Swift Finance UK (www.swiftfinances.co.uk), clone of a licensed intermediary.
Reported by FINMA:
- Suisse Commerce Bank (www.suissecommercebank.com);
- B-S500; BS500 (https://b-s500.com).
Reporting by the Cyprus Supervisory Authority (CYSEC):
CYSEC informs investors that it has prepared the update of the list of websites through which unauthorised entities are offering investment services. The list is available on the Authority's website.
- Attention was drawn to the information to be provided by the issuers and those responsible for drafting the offer documents and prospectuses (Reminder no. 1/2021 of 16 February 2021);
- Attention was drawn to the obligations of online portal operators regarding the persistence of the impacts of the coronavirus emergency (Reminder no. 2/2021 of 16 February 2021).
- The tripartite prospectus (issuer's registration document, securities note and summary) for admission to listing on the Mercato Telematico Azionario (MTA), organised and managed by Borsa Italiana Spa, of Philogen Spa's ordinary shares has been approved (decision of 17 February 2021).
- The prospectus relating to the public offer and the admission to trading on the MTA, organised and managed by Borsa Italiana Spa, of Aedes SIIQ Spa's newly issued shares has been approved (Decision of 18 February 2021).
- The amendments to the Regulation Instructions for the markets organised and managed by Borsa Italiana Spa approved by the company's CEO on 29 January 2021, relating to the introduction into the Idem Italian Derivative Market of further deadlines for the "Futures on the FTSE MIB Dividend index" and for the "Dividend Futures on shares" have been approved (decision of 17 February 2021).
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 the said Consolidated Law on Finance, put in place by:
- Empirecfd Limited through the website www.empirecfd.com and its page https://crm.empirecfd.com (resolution no. 21726 of 18 February 2021);
- Empire Capital Llc through the website https://27proquote.com (resolution no. 21725 of 18 February 2021);
- Kiqiwk Holdings Intl Limited through the website www.solutionsmarkets.io (resolution no. 21728 of 18 February 2021);
- HB Enterprises OU and Fina Holding Incorporated through the website www.forexone.co and its page https://client.forexone.co (resolution no. 21727 of 18 February 2021).