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  1. Background

On 14 of September 2018 the Legislative Decree No. 107 dated 10 August 2018 (“L.D. 107/2018”) has been published in the Italian Official Journal. It contains the amendments to the Legislative Decree No. 58 dated 24 February 1998 (“Consolidated Financial Act” or “CFA”) implementing the European Union Regulation No. 596/2014 on market abuse (“MAR”).

Amendments enter into force on 29 of September 2018 (fifteen days after the publication) and concern in particular Part IV on issuers and Part V on sanctions of the CFA.

In order to comply with the new dispositions, adjustments on company procedures will be needed.


  1. Principal amendments on Part IV relating to the companies on issuers
  • Delay on disclosure to the public of inside information: exercised the option under article 17 (4) (3) of the MAR

The previous CFA discipline provided that where an issuer or emission allowance market participant has delayed the disclosure of inside information, it shall provide a written explanation on why the disclosure was delayed and how the conditions set out in article 17 (4) (3) of the MAR were met. After the entry into force of L.D. 107/2018 such an explanation is to be provided only upon the request of the competent authority. Therefore, it is no more necessary to notify to the Consob, the reason behind the delay immediately after the disclosure of the information to the public.

However, obligation to notify the delay just after the disclosure of the information to the public remains. On this point, the explanatory memorandum of the L.D. 107/2018 specified the following: since Consob will be always notified the delay from the issuer, the choice to limit the explanation upon request is supported, on the one hand, to avoid the issuer the fulfillment of a non-proportionate obligation and, on the other hand, to allow the competent authority to focus its investigation on major risk occurrences.

  • Internal dealing discipline: confirmed the shareholders owning at least 10% of the company’s share in the list of relevant subjects

Contrarily to what has been initially proposed in the scheme of amendments presented to the Italian Parliament in May, the L.D. 107/2018 issued in August modified article 114 (7) of the CFA, confirming (not eliminating) the relevance – for the purpose of the internal dealing discipline – of transactions conducted by shareholders owning at least 10% of the company’s share on their own account relating to the shares or debt instruments of the issuer or to derivatives or other financial instruments linked thereto, by persons that exercise control over the company (“Significant Shareholders”) as well as persons closely associated with them.

These persons shall notify to the competent authority and to the public the transactions conducted on shares or debt instruments of the issuer or derivatives or other financial instruments linked thereto, according to terms and conditions set forth in the secondary-level regulation, namely Consob Decision No. 19971/1999 (“Resolution on Issuers”).

It must be specified that the reintroduction of this provision has been expressly demanded by the Italian Parliament.

  • Disclosure of inside information: removed the reference to newspaper from article 114 of the CFA and confirmed the faculty to give instructions to subsidiaries

L.D. 107/2018 amended article 114 (1) of the CFA stating that issuers publish the inside information under article 17 of the MAR, according to the procedures stated in the executive acts (i.e. SDIR, storage mechanism, company’s website).

In particular, it has been eliminated from paragraph 1 of article 114 of the CFA the obligation to publish inside information in a newspaper widespread on the national territory. The explanatory memorandum, on this point, stated that the disclosure of inside information via newspaper is not required by any of the European norms. Moreover, such obligation does not match with the necessity of a rapid and non-discriminatory access to the information.

It has to be remarked that reference to newspaper is nevertheless maintained in article 113-ter­ of the CFA and in Resolution on Issuers that impose the publication in newspaper of some specific information (i.e. the publication of documents requested by articles 71, 72 (3) and (4), 77, 81, 102 (4), 103 (1) and 110 (1) of the Resolution on Issuers, and the disclosure of information under articles 84 and 89 of the Resolution on Issuers).

The Italian legislator confirms and extends the power of issuers to give orders to subsidiaries concerning the compliance with the obligation to disclose according to European and national legislation.

  • Issuers admitted to trading on MFTs and OTFs

L.D. 107/2018 amended article 114 (12) of the CFA. In particular, Significant Shareholders of issuers admitted to trading or for which a request for admission to trading has been made on Italian multilateral trading facilities (MTFs) and on other Italian types of organized trading facilities (OTFs) now fall under the scope of application of article 114 of the CFA and MAR discipline.

Accordingly, Consob powers of disclosure and investigation has been enlarged (article 115 of the CFA).

L.D. 107/2018 also integrated article 132 of the CFA – that imposes respect of the principle of equal treatment of shareholders in buy-back programs – extending its scope of application to companies on Italian MTFs and their subsidiaries. Consequently, also article 172 of the CFA has been aligned, imposing criminal sanctions to directors of companies on Italian MTFs carrying out irregular purchase of companies’ own shares.


  1. Major novelties concerning the penalty system (Part V of the CFA)

Similarly, L.D. 107/2018 enlarged the scope of application of disposition of Part V of CFA to guarantee coherence and coordination with the European discipline of MAR and Directive 2014/57/UE on sanctions (“MAD II”). MAR and MAD II apply:

(i) to financial instruments (a) admitted to trading on a regulated market or for which a request for admission to trading on such a market has been made, (b) admitted to trading on MTFs, or (c) admitted to trading on other types of OTFs;

(ii) to financial instruments negotiated over the counter; and

(iii) to unlisted financial instrument whose prices depend on listed financial instruments in any trading venue or can have an effect on such a financial instrument.

Minor amendments were made in articles 184 and 185 of the CFA with the purpose to fulfill the coordination aim of the legislative reform. In particular, exception rule has been created for person who discloses information in a market sounding procedure under article 11 of the MAR and a person who commits the abuse under purchasing orders or transactions made for legitimate reasons and according to the accepted market practice under article 13 of the MAR. According to the reform, those individuals shall not be sanctioned.

The administrative sanctions set forth in article 187-bis (“abuse and unlawful disclosure of inside information”) and article 187-ter (“market manipulation”) of the CFA were reformulated according to the provisions of articles 14 and 15 of the MAR, by directly enforcing them at the national level.

As to these violations, the subjective accountability criteria has been maintained on individuals, while new terms and conditions for the company accountability are set out in the new article 187-quinquies of the CFA. Criteria to determine the applicable sanctions is not anymore linked to the one imposed to the individual who committed the violation and the range for the financial penalty goes from 20.000 euro to 15.000.000 euro, where the misconduct is carried out in the interest of the company or for its profit by managers violating articles 14 and 15 of the MAR.

With regards to the sanction regime, the major novelty concerns a new set of violations defined in article 187-ter.1 of the CFA, penalizing violations of norms of the MAR other than articles 14 and 15. New abuses refer mostly to preventive norms concerning:

(a) prevention and individuation of abuse (article 16 (1) and (2) of the MAR), disclosure to the public of inside information and delay (article 17 (1), (2), (4), (5) and (8) of the MAR and article 114 (3) of the CFA); also

(b) insider list (article 18 of the MAR), managers’ transactions (article 19 (1), (2), (3), (5), (6), (7) and (11) of the MAR) investments recommendations (article 20 (1) of the MAR).

New article 187-ter.1 of the CFA differentiates the amount of financial sanctions according to the type of violation and the legal nature of the transgressor. The norm also allows Consob to impose – in addition to financial sanctions – one of the administrative measures listed in article 30 (2) from (a) to (g) the MAR. While, in front of soft violations, Consob may apply – in addition to the seizure measures – alternative administrative measures.

Other amendments of coordination attain to (i) recidivism (article 187-quarter of the CFA), (ii) seizure’s scope of application (article 187-sexies of the CFA) and (iii) ne bis in idem principle (article 187-terdecies of the CFA).



For any further information feel free to contact the following professionals at our firm:

Avv. Simone Gerardi

Email: sgerardi@glglex.it

Tel: 0039 02 82826000

Avv. LL.M. Luca A. Lo Po’

Email: llopo@glglex.com

Tel: 0039 02 82826000

Avv. LL. M. Donatella Naselli

Email: dnaselli@glglex.com

Tel: 0039 02 82826000