After a long procedure and approval process, on 27 February 2024 the Italian Senate definitively approved the Draft Law “Interventions to support competitiveness of capital assets and proxy to the Government for the organic reform of the relevant provisions on capital markets assets brought by the consolidated law referred to legislative decree 24 February 1998, No. 58, and of the provisions referred to capital companies contained in the Italian Italian Civil Code applicable also to issuers in the capital markets” (the so-called “DDL Capitali”).
There are many innovations that will lead to a reform of the Consolidated Law on Finance Legislative Decree No. 58/1998 (“Consolidated Law on Finance”) from the entry into force of the DDL Capitali, as it is also foreseen that the Government may be given a proxy to issue one or more legislative decrees to establish an organic reform of the capital market regulations.
In particular:
Off-site offer
Art. 1 - Listed issuers (including Multilateral Trading Facility ("MTFs")), after the Initial Public Offering ("IPO"), are exempt from the off-site offer rules if the tranche offered is equal to or greater than EUR 250,000 and the placement is made by the issuer's directors or management personnel. The exemption does not apply to Investment Companies with Variable Capital ("SICAVs") and Investment Companies with Fix Capital ("SICAFs").
Extension of the definition of the SME category
Article 2 - the maximum capitalisation qualifying an enterprise as an SME is increased from EUR 500 million to EUR 1 billion.
Dematerialisation of shares of Limited Liability Companies ("S.r.l.") Smal of Medium-Sized Enterprises ("SMES")
Art. 3 - dematerialisation of S.r.l. SME shares «of equal value and conferring equal rights» permitted. Dematerialisation consists in the representation of the share by means of an accounting entry in a central depository. Dematerialisation allows for a simplification of the procedures relating to the issue, transfer and establishment of rights to the shares, thus reducing the related costs and administrative burdens.
Issuers of widely distributed financial instruments
Art. 4 - repealed the provisions of the Consolidated Law on Finance regarding widespread issuers (e.g. advertising obligations regarding incentive plans; limits on the cumulation of assignments of members of the supervisory body; disclosure obligations about relationships with foreign companies; extension to 9 years of the audit mandate; rules (and sanctions) by the Italian Securities and Exchange Commission ("Consob") on related parties, leaving only the Stock Exchange discipline on related parties).
Shareholders' agreements and treasury shares
Article 4 - extension to MTF issuers of (i) the discipline on shareholders' agreements as per article 2341-ter of the Italian Civil Code, according to which the agreements must be communicated to the issuer and declared at the opening of the assembly, with transcription in the minutes; (ii) the limit to the purchase of treasury shares under article 2357, paragraph 3 of the Italian Italian Civil Code (maximum 20% of the capital).
Extension to MTF issuers to prepare the consolidated financial statements International Financial Reporting Standard ("IFRS")
Article 5 - MTF issuers are offered the possibility to prepare consolidated financial statements according to IFRS principles regardless of their size.
Bond Issues
Article 7 - Amendments have been introduced to articles 2412 and 2483 of the Italian Civil Code in order to facilitate the issuance of debt securities by companies not listed on regulated markets:
As for joint-stock companies (S.p.A.): (i) the calculation of the capital referred to in article 2412, paragraph 1, of the Italian Civil Code can be based on the last of the registrations referred to in article 2444, paragraph 1, of the Italian Civil Code, thus avoiding the need to prepare a special balance sheet if capital increases have been carried out after the date of the last balance sheet; (ii) the limits set by article 2412, paragraphs 1 and 2, of the Italian Civil Code can be exceeded if the bonds are subscribed, even in the context of resale, exclusively by professional investors if such provision is among the conditions of issuance;
As for limited liability companies (S.r.l.): debt securities can be subscribed by professional investors (and not only professional investors subject to prudential supervision) if such provision is among the conditions of admission, without the possibility of modification.
Prospectus approval discipline and liability of the placement manager
Article 9 - with reference to the terms of effectiveness for the approval of the prospectus by CONSOB, Article 94 of the Consolidated Law on Finance specifies that the terms of approval of the prospectus (indicated in EU Regulation 2017/1129) run from the date of submission of the draft prospectus and that, in case integrations or modifications to the draft are necessary, the provisions of the aforementioned EU Regulation apply. Furthermore, paragraph 7 of the same article is repealed, abolishing the liability regime of the intermediary responsible for the placement, in order to align Italian legislation with what is provided for in the European context.
Internal dealing, repeal of the reporting obligation by controlling shareholders
Article 10 - Article 114, paragraph 7, of the Consolidated Law on Finance is repealed, which provided the obligation for those who control the issuer, as well as for shareholders holding at least 10% of the share capital and persons closely related to such subjects, to report to CONSOB and the public the transactions carried out on shares of the issuer or other financial instruments connected to them.
Designated representative
Article 11 - If provided for by the bylaws, it is allowed for the assembly of listed companies and MTF issuers to be held exclusively through the designated representative pursuant to article 135-undecies of the Consolidated Law on Finance. It is also worth noting the extension of the emergency provisions of article 106, paragraph 7, of the Law-Decree of March 17, 2020, No. 18, until December 31, 2024.
Board of Directors Lists
Article 12 - In companies listed on regulated markets, the outgoing Board of Directors can present a list of candidates for the election of the members of the administrative body; there are a series of conditions, among which: the list must be approved with an enhanced quorum of at least 2/3; the list must bear a number of candidates equal to the number of members to be elected plus one third; the list must be published and filed within the 40th day before the date of the assembly; in case of victory of the council list, two-phase voting: first of the lists and then individual; differentiated structure of seat allocation depending on whether the shareholders' list has obtained more or less than 20% of the votes.
Multiple voting rights
Article 13 - The vote that can be assigned by the bylaws to each multiple voting share is increased from 3 to 10.
Increased voting rights
Article 14 - In addition to the current increase of 2 votes per share obtained after a minimum of 2 years of uninterrupted ownership, the bylaws may also provide for the attribution of 1 additional vote at the expiration of each additional period of 12 months, up to a maximum total of 10 votes per share.
Pension Funds becomes professional investors
Article 15 extends the qualification of professional investor to private and privatized pension entities, in order to facilitate the participation of institutional investors in regulated markets.
Externally managed reserved SICAFs and SICAVs will be exempt from authorization
Article 16 - Externally managed SICAFs and SICAVs, when reserved to professional investors and the other categories of investors set forth by DM 30/2015, are as a matter of fact aligned with contractual AIFs as regards the establishment process, since their by-laws are no longer subject to the approval of the Bank of Italy. It is also provided for that the profits of a compartment can be distributed even in lack of company's profits in the aggregate.
Delegation to the Government
Article 19 - delegates to the Government a twelve-month period for the issuance of one or more legislative decrees for the comprehensive reform of the provisions on capital markets of the Consolidated Law on Finance, and, where necessary, of the provisions on capital companies contained in the Italian Civil Code applicable to issuers.
Amendments to the discipline referred to in Article 24 of the law of 28 December 2005, No. 262, with reference to damage compensation
Article 20 - it is clarified that the damages for which the Authority is liable can only be those that are the immediate and direct consequence of the violation of laws and regulations on the observance of which the Authority itself has failed to supervise.
