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(I) Introduction
On 20th November 2018 Consob published the Resolution No. 20686/2018 amending Regulation No. 11971/99 (“Issuers’ Regulation“) with reference to the threshold for exemption from the obligation to publish an information sheet for public offers of securities, which has been increased to EUR 8 million.


(II) Main changes
(a) Offers to the public of financial products
Consob, taking into account the results of the public consultation launched last June, in compliance with the powers provided in article 100, paragraph 1, letter c) of the Italian Legislative Decree No. 58/1998 (“Consolidated Financial Act” or “CFA”), amended article 34-ter, paragraph 1, lett. c) of the Issuers Regulation, increasing from EUR 5 to EUR 8 million the threshold of exemption from the obligation to publish a prospectus for all types of public offer of financial products.
The amendment adopted makes it possible to take full advantage of the flexibility provided for by the provisions of EU Regulation No. 2017/1129 (“Prospectus Regulation“) which came into force on 21 July 2018 and provided for an increase from EUR 100 thousand to EUR 1 million of the threshold minimum below which the Member States (“MS”) cannot require the publication of a prospectus. Prospectus Regulation also gave MS discretion to exempt from the publication of a prospectus each offer in the Union that presents a monetary amount calculated over a period of 12 months which shall not exceed EUR 8 million (Article 3, paragraph 2 of the Prospectus Regulation).
The regulatory amendment adopted has a positive impact on reducing the costs of access to the capital market for SMEs.


(b) Capital increases of issuers listed on Italian regulated markets
As part of the resolution in question, in order to systematize the disclosure obligations of listed companies in the event of capital increases for a value lower than the exemption threshold, Consob decided to codify in the Issuers’ Regulation the content of the Consob Communication No. DIE/13028158 of 4th April 2013, which provides for the inclusion in the report of the Board of Directors in the event of a capital increase, of a series of information on the effects of the transaction on the economic-financial profile of the listed company.
More specifically, resolution No. 20686/2018 modifies article 72, paragraph 1-bis of the Issuers’ Regulation and integrates the schedule No. 2 of Attachment 3A to the Issuers’ Regulation, providing that the report of the Board of Directors preliminary to the resolution to increase capital by public offer below the threshold shall include in the following information:
“1. The updated estimate of the net working capital of the issuer or group (understood as the difference between current assets and current liabilities), determined without taking into account the proceeds or the effects (e.g. conversion of capital liabilities) arising from the transaction in question. The evaluation of the net working capital may refer to the last accounting report approved by the issuer; in this case, report a declaration, even with a negative formulation, on any significant changes that may have occurred subsequently;
2. an estimate of the net financial needs of the issuer or group, further in addition to the one related to the previous point 1, for the twelve months following the scheduled start of the offer, determined without taking into account the income or effects from the aforementioned operation;
3. a description of the methods of financing the total financial needs referred to in the above-mentioned points 1 and 2. In particular, directors’ considerations must be provided regarding the adequacy of the net cash proceeds deriving from the offer in question with respect to the aforementioned total financial requirement of the issuer or group. If the resources deriving from the offer are lower than the total current financial needs of the group, the description of the additional measures envisaged / put in place to deal with the short-term commitments of the issuer or group must be provided;
4. the destinations, as far as possible in order of priority, of the proceeds of the transaction in addition to that used to cover the aforementioned current financial requirement. ”
In cases where the operations are resolved by bodies other than the shareholders’ meeting, it is established that information is also provided in a price sensitive press releases published as a result of the resolutions of the relative body.
These disclosure obligations will apply to issuers listed on an Italian regulated market for which Consob is the authority of the home MS pursuant to the Prospectus Regulation.


(III) Impact of changes to the takeover bid framework
Raising the threshold for exemption from the obligation to publish a prospectus for offers to the public of financial products is also relevant to the definition of “public purchase or exchange offer” and to the consequent applicability of the related regulations contained in the CFA.
The recall operated by article 1, paragraph 1, letter v) of the CFA to the regulatory provisions on the prospectus will entail full symmetry between the new threshold for exemption from the offer prospectus and the threshold that determines the application of the regulations regarding takeover bids or voluntary exchange.
It remains established that the regulation on mandatory bids is in any case applied also with reference to transactions with a lower value than the aforementioned amounts, also considering that the EU Directive no. 2004/25/CE (“Takeover Directive“) does not provide for exemptions for thresholds.


(IV) Entry into force
The amendments entry into force from the day following the publication in the Official Journal of the resolution No. 20686/2018. It is specified that to date the resolution No. 20686/2018 has not yet been published in the Official Journal.