Tuesday July 2 2019
News Source: Global Disclosures
Focus: Major Shareholdings
On 27th June 2019, CONSOB launched a public consultation on the proposed amendment to the Issuers’ Regulation (IR), for the implementation of the delegation contained in Article 120, paragraph 4-bis, of the TUF, concerning the obligation to make the declaration of intentions for those who purchase a significant holding in the capital of a listed issuer (so-called “anti-raid” rule).
The decree-law of October 16, 2017, n. 148, converted with amendments by the law of December 4, 2017, n. 172 (so-called Fiscal Decree), introduced the new paragraph 4-bis into Article 120of Legislative Decree of February 24, 1998, n. 58 (TUF), which imposes an additional disclosure than currently provided in respect of ownership structures, aimed to make any attempted takeovers involving Italian listed issuers transparent.
In summary, the new Article 120, paragraph 4-bis, of the TUF, provides that on the occasion of the acquisition of a shareholding in listed issuers equal to or greater than the thresholds of 10%, 20% and 25% of the share capital, the subject who performs the disclosure referred to above should (also) declare the objectives that they intend to pursue in the course of the next six months (so-called “declaration of Intentions”).
The legislator has also assigned CONSOB the power to identify, with its own regulation, “the cases in which the aforesaid declaration is not due by taking into account, if appropriate, of the characteristics of the subject making the declaration or the company whose shares were purchased”.
CONSOB has thus identified the following cases of exemption from the obligation to make the declaration pursuant to Article 120, paragraph 4-bis, of the TUF:
- in the cases of exemption regarding compulsory takeover bids referred to in Article 49, paragraph 1, letters a), c), d) and h), of the IR;
- in the cases of exemption referred to in Article 119-bis, paragraph 3, letters a), b) and c-ter), of the IR;
- passive exceedances of the relevant thresholds;
- purchases made by managers of certain types of funds;
- purchases made in the context of a public takeover or exchange bid already communicated to the market.
The operation of the exemption in the cases referred to in letters a), c), d) and e) shall be subject to a declaration by the subject concerned about the existence of one of the specific cases for exemption. This declaration will be reported in the model provided for the fulfilment of the disclosure obligations pursuant toArticle 120 of the TUF (Annex 4 of the IR).
The declaration of the existence of a ground for exemption will not be applied in relation to the case referred to in the preceding letter b) because in this case it is not required to make the notification using the model contained in annex 4.
For purchases of treasury shares by the issuer, in implementation of a plan communicated to the market within the meaning of Article 144-bis, paragraph 3, of the IR, taking into account that in this case there can be no “takeover”, there is no obligation to make the declaration provided for in Article 120, paragraph 4-bis, of the TUF. In addition, the declaration is not due on the occasion of the first communication of major holdings with reference to the abovementioned thresholds by selling shareholders in the context of an IPO. This is however without prejudice to the fact that the obligation to make the declaration of intentions should be acquitted even in cases where the relevant thresholds are exceeded due to the increase in voting rights.
Still on the subject of ownership structure, CONSOB has submitted for consultation some proposals for amendment of the IR which relate to Article 117. In particular, the new paragraph 2-bis of this article, whose introduction is proposed, is designed to promote the emergence of holdings comprised between the thresholds of 3% and 5% of the capital to if it does not qualify for SME status due to exceeding the criteria referred to in Article 1, paragraph 1, letter w-quater.1), of the TUF. The amendment introduces an obligation of notification of the infra-threshold shareholding held, following the change of applicable regime (from SMEs to ordinary listed companies), with reference to the initial threshold (from 5% to 3%) provided for the notification of holdings in shares.
Specifically, the regulatory proposal provides that:
- issuers shall disseminate a communication to the market in relation to the variation of the SME status (Article 2-ter, paragraph 2, second sentence);
- the obligation for those who hold a shareholding of more than 3% but less than 5% of the voting rights of the issuer that has lost its SME status to communicate this participation to CONSOB and the investee company shall run from the date of the communication described above (Article 117, new paragraph 2-bis, and 121, new paragraph 3-bis, of the IR).
The 20-day consultation will end on July 17, 2019.
Click here for consultation (Italian Version).
Click on the above link for further information.