By Francesco Dagnino and Marco Stefanini

Some of the changes brought by Borsa Italiana S.p.A. (hereinafter, “Borsa Italiana”) with Notice no. 17857 to the Alternative Investment Market Italia, the sub-market reserved to small and medium Italian companies with high growth potential – known simply as “AIM Italia” – have become effective on July 6, 2020.

The new provisions see, in particular, the expansion of the AIM Italia with a new market segment dedicated exclusively to “professional clients” (the “Professional Segment”), as referred to in Annex II of EU Directive no. 2014/65. The amendment is specifically designed to meet the demands of a wider audience of listed companies and is aimed in particular at companies that (i) in the absence of immediate needs to raise capital, intend to put on hold the listing on the Professional Segment (the so-called “just listing”), (ii) intend to have access to trading on the retail investor market slower, gradually implementing the necessary structure, and (iii) have been marketing their products/services for less than a year and/or have yet to start the fundamental strategic functions/processes envisaged by their business model (so-called “scale-up”).

Specific provisions are also established with reference to (i) the contents of the so called “admission document”, (ii) the minimum requirements of the free float at the date of admission to trades and (iii) the trading methods.

Contents of the admission to trades document

With regard to the first profile, a simplification is introduced with regard to the working capital declaration, in line with the standards of growth markets for small and medium companies. In this regard, the issuer’s directors may go as far as to declare, differently from the AIM Italia market for retail clients, whether or not the company’s working capital is sufficient to meet the current needs of the company or, if not, how they plan to provide the additional working capital (see Article 78, paragraph 2, letter e) of Regulation No. 565/2017).

Minimum free float requirements at the date of admission to trades

Specific rules also apply to the companies admitted to the Professional Segment in terms of minimum requirements of the free float, which must be at least 10% of the total company’s share capital. This requirement is presumed to be met when the shares are distributed to at least five investors, including non-institutional or professional investors, who are not related parties or employees of the company or its group companies. In the event that the above requirement is not met, Borsa Italiana is entitled, at the same time of the admission of the company to trade on the AIM Italia, to suspend the shares for a period of two years, at the end of which, if the free float requirement is not met, the latter will delist the company from the professional segment.

Methods of negotiation

Finally, the new provisions introduce specific requirements on how to trade in the Professional Segment, taking into account the different cash needs of investors. In this regard, it is established that these procedures must be carried on the basis of a single daily price, applied to a minimum stock of shares with a countervalue of Euros 5,000.00; moreover, the operation of a “stock exchange specialist” is not envisaged. In addition, issuers admitted to trade on the Professional Segment will be the only ones who may refrain from appointing the so called “independent director” and the “investor relator”.

The above amendments came into force on 20 July 2020 and limit tradings on the Professional Segment to professional clients.