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CONSOB, recent news


CONSOB has implemented the “Guidelines on Exchange-Traded Funds (ETFs) and other UCITS issues" issued by ESMA – CONSOB Communication n. 13015352 of 22 February 2013

CONSOB has implemented the "Guidelines on Exchange-Traded Funds (ETFs) and other OICR issues" issued by ESMA on 18 December 2012 on issues relating to ETFs and other harmonized UCITS which are addressed to the competent supervised authorities designated by each member state, to the UCITS management companies and to UCITS taking the form of self-managed investment companies.

The purpose of the Guidelines is to “protect investors by providing guidance on the information that should be communicated with respect to index-Tracking UCITS and UCITS ETFs together with specific rules to be applied by UCITS when entering into over-the-counter financial derivative transactions and efficient portfolio management techniques. Finally, the guidelines set out criteria that should be respected by the financial indices in which UCITS invest”.

Within this framework, guidelines have been set up aiming at providing clarifications and explanations concerning (i) the information to be disclosed to investors in index-tracking UCITS and harmonized ETFs, (ii) the rules governing the operations of certain types of financial instruments (e.g. derivatives OTC), (iii) the techniques for an efficient portfolio management in relation to the harmonized UCITS and (iv) the guidelines for investments made by an harmonized UCITS in financial indexes.

The implementation of the Guidelines by CONSOB falls within the process determined by the European Union in order to implement “standardized, efficient and effective supervisory practices, and to ensure the common, uniform and consistent application of European law”.

The Guidelines apply starting from 18 February 2013.

At the same time, with the implementation of the Guidelines, also paragraph 1-bis of article 154 of CONSOB Regulation no. 11971/1999 on issuers has been inserted in order to regulate the transitional period. Therefore, the existing UCITS are required to comply with the Guidelines in the first occasion or, at the latest, within 12 months from the date of the entering into force of the Guidelines. As far as the current year is concerned, the period for the update of the prospectus and the relevant disclosure duties, set forth in article 18, paragraph 4, and article 19, paragraph 1, of CONSOB Regulation no. 11971/1999 on issuers (i.e. the end of the month of February), has been extended by two months and, therefore, until 30 April 2013.

In order to guarantee a greater information and a higher level of transparency for the protection of investors, in the period of time between 1st March and 30th April 2013, the addressees of the Guidelines supervised by CONSOB, shall disclose, in the appropriate section of their website(i.e. the section containing the UCITS offer documentation) a warning in order to communicate:

  • the update of the prospectus in accordance with Article 18, paragraph 4, of CONSOB Regulation no. 11971/1999 on issuers, as well as with the above mentioned Guidelines of ESMA, or
  • the choice by the supervised entity to make use of the extension period.

This warning must be contained in an addendum to be delivered free of charge to the investors, together with the prospectus.

Exemption from prospectus obligation: answers to the request of further clarifications on this point (Communication n. DIE/13017238 dated 28-2-2013)

CONSOB confirms that any issuance, also in connection to the renegotiations of bank loans, for an amount of less than Euro 5,000,000, is not subject to the obligation of publishing a prospectus should the conditions under art. 34-ter(1), letter c) and art. 57(1), letter l) of CONSOB Regulation no. 11971/1999 (Issuers Regulation) be met.

According to the law, the exemption from the obligation to publish prospectuses shall apply in case of the offering of (i) financial products included in a single offer or (ii) securities included in a single admission to listing for which the total price/consideration, calculated within the European Union, is less than 5 million euro; in this respect, various offers concerning the same product/security, made by the same issuer or “offerer” in a twelve-month period shall be considered together.

In order to calculate the exemption threshold, reference has to be made to the document ESMA/2012/855 "Questions and Answers" dated 18 December 2012 (paragraph 26).

Therefore, in order to assess if the prospectus exemption shall apply, the issuer is requested to ascertain that the proposed issuance of bonds is not (i) part of a more extensive project appealing to public savings with reference to the same subject; and (ii) aimed at acquiring through the same financial instrument, over a time frame of 12 months, financial resources for a total amount that is equal to or more than 5 million euro.

CONSOB, Public consultation: “Recommendations in relation to the information to be given in financial reports and press releases for listed issuers in the industries of renewable energies and real estate” (28 February 2013)

CONSOB has submitted for consultation the “Recommendations in relation to the information to be given in financial reports and press releases for listed issuers in the industries of renewable energies and real estate”.

As far as the Recommendation for companies operating in the renewable energy industry sector are concerned, the consultation is aimed at strengthening transparency and consistency of the financial information disclosed in order to make them as reliable and complete as possible for the investors’ appraisal , and to reduce the current risk of speculation on the stock market. Said Recommendation provides for detailed indications on the information to be disclosed to the market, with specific reference to the following items: the legislative framework, the definition of the segments of business operations, the energy production systems, the projects under development and to the financial debt position of groups as well as to the methods or financial recording of project development costs.

As far as the listed real estate companies are concerned, the public consultation is aimed at implementing the guidelines in order to obtain a more effective, transparent management of relations between the companies and the independent experts appointed to prepare the evaluations and at promoting initiatives to improve the disclosure in relation to the assessment of the fair value of current property initiatives. In this regard, CONSOB expects to receive from the market operators’ information related to (i) the information flows and the exchange of documents between companies and independent experts, (ii) an indication of the structure of the organizational internal system aimed at verifying the correct application by the experts of the assets’ evaluation criteria, (iii) the selection criteria for the companies in charge of the assessment and the criteria for the renewal of assignments and/or rotation of experts.

Any listed company interested in addressing its observations to CONSOB, is requested to send them within 30 April 2013.

The views and opinions expressed in CMS Adonnino Ascoli & Cavasola Scamoni's Newsletter are meant to stimulate thought and discussion. They relate to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments. CMS Adonnino Ascoli & Cavasola Scamoni's Newsletter does not intend to constitute legal or professional advice. CMS Adonnino Ascoli & Cavasola Scamoni's Newsletter is CMS property.

CMS Italy Newsletter | 14 Mar 2013
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Portrait of Paolo Bonolis
Paolo Bonolis