– Written by Francesco Dagnino, Andrea M. Maroni and Giovanni Piscopo
By Resolution No. 22423 of July 28, 2022, Consob (or “Commission”) modified the implementing regulation of Legislative Decree No. 58 of February 24, 1998, concerning the regulation of issuers, adopted by Resolution No. 11971 of May 14, 1999 (the “Issuers’ Regulation” or “RE”) regarding the regulation of prospectuses.
Following a public consultation launched on December 23, 2021 (the “Consultation”), on July 28, Consob approved amendments to the Issuers’ Regulations aimed at simplifying the procedures for approving prospectuses.
The amendments aim to speed up the approval of prospectuses and simplify their regulation, as well as facilitate companies’ access to capital markets, while at the same time not affecting the protections put in place to safeguard investors.
Specifically, the amendments addressed:
- the alignment of prospectus approval deadlines with European legislation;
- the so-called prefiling;
- the possibility of drafting the prospectus in English for offers promoted in Italy as the home member state; and
- the simplification of Annexes 1A and 1C of the Issuers’ Regulations.
These proposals were also formulated in the context of the recent debate in the European Union on possible measures to simplify the subject matter, as well as the findings that emerged in the context of the preparatory work on the Libro Verde (Green Paper) “La competitività dei mercati finanziari italiani a supporto della crescita” (The competitiveness of Italian financial markets in support of growth), published last March by the Ministry of Economy and Finance.
The alignment of prospectus approval deadlines with European legislation
As a result of the Consultation, Consob accepted the comments received from a large part of market participants, aimed at the direct and full application of the provisions of Article 20 of Regulation (EU) 2017/1129 of the European Parliament and of the Council of June 14, 2017 (the “Prospectus Regulation”). The provisions concern the timing of the approval process for prospectuses, as it appeared to be the most appropriate solution to ensure full compliance of the regulatory framework with the European framework.
As a result, the provisions concerning the timeframe for approval of the prospectus for offers of securities to the public, provided for in the text of the former Article 8 of the RI, were removed from the Issuers’ Regulations.
Moreover, Consob, having eliminated the preliminary verification of the completeness of the application for approval, will initiate the approval procedure of prospectuses even in cases of the incompleteness of the relevant application and any documentary deficiencies may be remedied in the course of the same proceedings.
Preliminary interlocutions with Consob (the so-called prefiling)
As is well known, Articles 4(1-bis) and 52(1-bis) of the Issuers’ Regulations included the possibility for bidders or applicants for admission to trading to establish a channel of preliminary and informal dialogue with Consob, limited to “any specificities” regarding the offering transaction.
In the Consultation, Consob re-delineated the scope of prefiling. It kept it, however, limited to the case in which the bidder/issuer intends to submit to Consob issues of “particular relevance” regarding the offer/admission to a listing transaction. Provision has, however, been made for the issuer/offeror to illustrate such matters also by sending informative elements of the documents of interest (e.g., parts of the company’s bylaws, financial reports, or specific paragraphs of the prospectus). A check of their completeness, consistency, and comprehensibility by Consob before the submission of the application for approval of the prospectus will remain excluded.
Consob has also made it clear, however, that it considers it possible, even in the context of prefiling interlocutions, to agree on an indicative schedule regarding the preliminary procedure.
Drafting of the prospectus in English
Concerning the language regime of the prospectus, Article 27 of the Prospectus Regulation had delegated to the national competent authorities-and thus also to Consob-the possibility of choosing the language that could be used in the drafting of the prospectus.
In implementing the aforementioned delegation, Consob had established a general obligation to use the Italian language, while the possibility of using the English language had been confined to certain cases.
As a result of the Consultation, instead, the new text of Article 12 of the IR provides the possibility for the issuer/offeror to be able to opt for the English language instead of Italian.
In this case, the Italian translation of the summary note will still be required if the offer is carried out in whole or in part in Italy (i.e., admission to trading on the Italian regulated market is sought), regardless of whether Italy is the home member state. It follows, therefore, that the translation of the summary is not required for offers made solely abroad when Italy is the home member state.
The simplification of Annexes 1A and 1C of the Issuers’ Regulations
Concerning the simplifications that have affected Annexes 1A and 1C of the Issuers’ Regulations, these are interventions to rationalize as well as reduce the documentation to be submitted during the preliminary investigation. They include in particular the elimination of the requirement to attach a copy of the issuer’s current bylaws and resolutions approving the transaction to the application for approval.
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