The Italian Government has approved the draft legislative decree for an organic reform of capital markets legislation, aimed at updating Legislative Decree No. 58/1998 (“TUF”) and amending certain key corporate law provisions of the Italian Civil Code. The reform — pending the expected overhaul of the sanctions framework and subject to parliamentary review — is designed to streamline the regulatory environment for listed issuers and make the Italian capital market more attractive. It addresses crucial areas such as takeover bids (“OPA”), corporate governance, disclosure, shareholders’ meetings, as well as mobility between regulated markets and multilateral trading facilities, while introducing significant simplifications for newly listed companies and SMEs. A high-level overview of the main amendments to the TUF is set out below.
OPA: thresholds, consideration and Consob’s powers
- Single threshold for mandatory takeover bids restored at 30% of the share capital or voting rights. In line with other European jurisdictions, it remains only the OPA threshold set at 30%; cancelled the other thresholds introduced around a decade ago, namely: (i) the 25% threshold applicable to companies bigger than SMEs (the latter as defined under the TUF and currently identified as companies with a market capitalization lower than EUR 1 billion), and (ii) the option for SMEs to set an OPA threshold between 25% and 40% in their by-laws.
- Offer price.The look-back period for determining the minimum offer price in a mandatory OPA is reduced from 12 months to 6 months.
- Increase in stake. For shareholders already holding between 30% and 50% of the share capital or voting rights, the annual threshold for incremental acquisitions without triggering a mandatory OPA is increased from 5% to 10%.
- Squeeze-out. The threshold for exercising the “purchase right” (squeeze-out) is lowered to 90% (from 95%).
- “Put up or shut up” in relation to rumours. In the event of news or market rumours regarding a potential OPA, The Italian Authority (Consob) may set a deadline by which the potential bidder must state whether it intends to launch the offer. If the bidder responds negatively or fails to respond, a 12-month standstill period will apply, preventing any OPA on the relevant issuer during that time.
- All-shares sale with shareholders’ authorization. A new procedure is introduced allowing the transfer of all the issuer’s shares to a purchaser designated by the board, without triggering a mandatory OPA, subject to approval by the extraordinary shareholders’ meeting. The resolution must be adopted with the favorable vote of the majority of shareholders attending the meeting, excluding the purchaser as well as persons acting in concert with it and any shareholder holding a majority stake (even relative majority, but exceeding 10% – so-called “whitewash”).
- Acting in concert. The concept of “maintaining” control is removed from the purposes of cooperation used to define “persons acting in concert.” In addition, absolute presumptions of concerted action are replaced with rebuttable presumptions, allowing the parties involved to provide evidence to the contrary.
Shareholders’ meetings, minority rights and reduced burdens when disclosing informations
- Shareholders’ meetings. The board of directors may resolve, even absent an express bylaws provision and with the favorable vote of the majority of independent directors, as well as subject to adoption by the board of a meeting regulation, that the shareholders’ meeting be held exclusively by means of telecommunication or with participation and voting solely through the “designated representative.” In addition, voting by correspondence or electronic means may be provided. The by-laws or the aforementioned regulation may set, for meetings held in a physical venue or by means of telecommunication, an individual shareholding threshold—no higher than one per thousand of the share capital—as a condition to participate in the discussion. If the by-laws or the notice of call provide that the meeting will be held by telecommunication means or through the “designated representative”, shareholders holding at least one-twentieth of the share capital with voting rights on the items on the agenda (or a lower threshold set by the by‑laws) may in any case request, within five days of publication of the notice of call, that the meeting be held in a physical venue.
- Minority rights.The individual right of a single shareholder to submit resolution proposals at the meeting is abolished. The right remains for shareholders representing at least 1/40 of the share capital to request additions to the agenda and submit proposals; related timelines are recalibrated to allow for the submission of resolution proposals on items added to the agenda.
- No more newspaper publication requirements. The obligation to publish both regulated information and meeting notices in newspapers is abolished. Digital channels will become the exclusive means of disclosure.
Governance: corporate bodies, controls and disclosure
- Internal control and risk management system. A new provision seeks to clarify the allocation of responsibilities within the board regarding internal control and risk management, specifying, first, that executive directors are responsible for ensuring the effectiveness of the internal control and risk management system. The rule also provides that the board of directors must assess and coordinate the functions involved in risk control and ensure a unified representation of the company’s risk exposure, taking into account the company’s size and nature (this latter function assigned to the control and risk committee or to the director entrusted with such function).
- Board of statutory auditors. The duties of the board of statutory auditors are amended: among other changes, the reference to “compliance with sound management principles” is replaced with oversight of the proper functioning of the board of directors and, in particular, of the diligent observance of the investigative, procedural and decision-making rules developed by best practices.
In addition, the controversial rule on reporting irregularities to Consob now provides that the reporting obligation concerns “acts or facts ascertained” by the audit body in the exercise of its oversight functions that “may constitute” an irregularity or a breach of law or the by‑laws.
At the same time, by virtue of the special role of the board of statutory auditors in listed companies, the recently introduced limitation of liability in the Civil Code is excluded.
- Use of artificial intelligence (AI) systems. Considering the spreading of AI systems, where such systems are adopted for internal control purposes, they must be adequate and proportionate to the nature and size of the company and to its risk exposure, thereby clarifying that the introduction of AI into the corporate organization affects responsibility for implementing and maintaining suitable organizational, administrative and accounting arrangements.
- Corporate governance and ownership structure report. Such report must now include disclosures on technology policies, the use of AI within administrative, organizational and accounting arrangements and cyber risks (consistently with the EU “AI Act” and “DORA” Regulations).
- Remuneration policy. As part of the simplification measures, although the binding vote on the remuneration policy is confirmed, at the same time the by-laws may now opt for an advisory vote, instead (opt-out). Also, on an opt‑out basis, the by-laws may exclude the extension of the remuneration policy to managers with strategic responsibilities. In any event, information on such individuals must always be provided in aggregate form (rather than on a named basis, as occurs for several issuers).
Mobility between markets
Downlisting. A provision is introduced regulating transfers from a regulated market to multilateral trading facilities (MTFs), such as the Italian Euronext Growth Milan, which issuer may pursue in order to reduce compliance and organizational burdens and to serve as an alternative to the more drastic “delisting.”
Special regime for newly listed issuers and SMES (opt‑in)
The special regime is a voluntary option to adopt a more flexible governance framework, designed to encourage new listings and support already listed SMEs (with a market capitalization below EUR 1 billion).
- Who and when.Newly listed issuers may amend their by-laws to opt into the new regime before filing the application for admission to trading, with effect from the first day of admission to trading; the right of withdrawal right is granted to shareholders who did not approve the resolution (and with the option to further amend the by-laws in accordance with the new rules after admission to trading).
Already listed SMEs may opt into the new regime within two years of the entry into force of the implementing legislation, by resolutions amending their bylaws adopted also with the favorable vote of the majority of shareholders attending the meeting other than the shareholders who, even jointly, hold a majority stake (even relative majority, but exceeding 10% – so-called whitewash mechanism).
To ensure transparency regarding companies that opt into the new regime, Consob will publish and promptly update on its website the list of such companies.
In addition, companies that have opted into the new regime and subsequently resolve on a downlisting will retain the options provided by the regime (other than the exclusion of withdrawal causes; see below) if their by-laws are compatible with the new market and only if the shares have been traded on the regulated market for an uninterrupted period of at least three years.
- What. The by-laws may:
- set alternative procedures to the slate voting system with respect to the appointment of the board of directors, including voting on individual candidates, subject to applicable gender balance rules and with the right to file candidates granted to the outgoing board as well as to shareholders holding at least 1% of the share capital (percentage which may be raised up to 5% by the by-laws), and without the need to reserve at least one seat for the minority (save where the majority of directors do not meet independence requirements, or the company has issued multiple voting shares or provides for enhanced voting rights, or the company is controlled by a public shareholder). The alternative appointment method with voting on each individual candidate also applies to the members of the board of statutory auditors, with the chairman of the board of statutory auditors still reserved to the minorities;
- provide for lower quorums for by-laws amendments (the majority of the capital attending the meeting, instead of two-thirds, save the company has issued multiple voting shares or provides for enhanced voting rights), and exclude the application of the withdrawal causes set forth in Article 2437 of the Civil Code, except in the case of changes to the corporate purpose where the change materially alters the company’s risk profile (however, the right of withdrawal may also be excluded in such case if the resolution is adopted through the so-called whitewash mechanism);
- exclude, in whole or in part, the application of related party transaction procedures, save where at least one of Consob’s quantitative thresholds exceeds 10%.
