Legal Framework

Warning about the highly-dilutive rights issue of Credito Valtellinese spa – Application of the rolling model and product governance

In the next days the rights issue by Credito Valtellinese spa will begin. Credito Valtellinese spa shares are traded on the regulated market MTA, organised and managed by Borsa Italiana spa.

This rights issue has a significant dilutive effect. This in turn implies the risk of anomalies in the shares’ price discovery process during the subscription period, such as the overvaluation of the shares’ market price compared to their theorical value.

In order to minimize this risk, the above-mentioned rights issue will be managed according to the so-called rolling model, as highlighted by Borsa Italiana spa with specific Market Notice.

The rolling model has been extensively described in Consob Communication no. 88305 of 5 October 2016, in the document “Esiti delle Consultazioni” of 28 April 2016 and in the technical rules issued by Borsa Italiana spa and Monte Titoli spa. The model, in short, provides for the “early” exercise of the subscription rights in each day of the capital increase starting from the third day; the newly issued shares stemming from such early exercise will be made immediately available.

The early exercise has to be made in accordance with the procedures and within the time limits laid down in the Instructions for the CSD Service of Monte Titoli spa, and with the contractual conditions agreed, case by case, with one's intermediary.

The early delivery of the newly issued shares is aimed at allowing arbitrage activity between shares and subscription rights starting from the first day of the rights issue; in turn, the arbitrage activity should minimize the risk that the above-mentioned price anomalies show up.

Alternatively, subscription rights can be exercised according to the standard model, i.e. with the delivery of the newly issued shares at the end of the rights issue.

Finally, it is worth highlighting, as described in Consob Communication no. 88305 of 5 October 2016, that the early delivery of the newly issued shares can cause investors to lose their right to revoke the decision of subscribing the new shares, provided for in Article 95-bis, paragraph 2, of the Italian Consolidated Law on Finance.

Additional information on the rolling model, including the above-mentioned documentation, is available in the dedicated section of Consob website ( Any question on the rolling model can be sent to: Consob - Market Division - Post-Trading Department – Via G. B. Martini 3 – 00198 Roma or emailing to

Lastly, with respect to the new MIFID2 rules, it is worth highlighting that “distributing” intermediaries (i.e. entities which offer, recommend or sell a product and an investment service to a client) should take into account, within their procedures, the indications issued by Credito Valtellinese spa as a result of its product governance assessment.

17 February 2018

Anna Genovese