The Italian Securities Commission (“CONSOB”) recently adopted Resolution 21304/2020 (the “Resolution”), imposing enhanced transparency obligations regarding significant shareholdings in certain listed issuers. The Resolution and its new restrictive measures enter into force on 18 March 2020, and will be effective for a period of three months (unless revoked beforehand).
The thresholds for reporting, pursuant to the Italian law implementing the EU Transparency Directive (article 120 of Legislative Decree 58/1998), are lowered as follows:
- from 3% to 1% for 38 companies with equity listed on the Mercato Telematico Azionario (“MTA”) set out in Section A of the Annex to the Resolution. CONSOB selected these companies based on their having capitalizations above €500 million; and
- from 5% to 3% for 10 small and medium enterprises (SMEs) set out in Section B of the Annex to the Resolution.
Anyone holding a stake above these thresholds will have to comply with the new reporting requirements under Italian law within 10 business days.
The Resolution makes a distinction between two types of investors:
- Investors who have acquired securities subsequent to the effectiveness of the Resolution; these investors are required to notify both CONSOB and the issuer within 10 business days of the date on which the 1% or 3% threshold is met, and
- Investors who held securities above the relevant threshold prior to effectiveness of the Resolution; these investors are required to notify both CONSOB and the issuer within 10 business days of effectiveness of the Resolution, even if they did not acquire additional shares subsequent to effectiveness of the Resolution.
Further, issuers are now required to report the number of treasury shares held in their portfolio prior to the execution of any repurchase plans for treasury shares. If the amount of treasury shares as a percentage of share capital falls within the thresholds set out in the Resolution, the issuer must – within 10 days of effectiveness of the Resolution or of reaching the relevant threshold – make a communication to CONSOB in order that the market can see the amount of treasury shares held.
In analyzing the effects of the Resolution, it is notable that: (1) CONSOB is clearly focused on its goal of transparency in the capital markets during a turbulent period caused by the effects of the COVID-19 pandemic, and (2) companies will now have a much clearer picture of their shareholder base in advance of the implementation of the Shareholders’ Rights Directive II.
