Corporate and Financial, Companies with listed shares, the new Consob thresholds for significant holdings
The community legislation imposes the obligation to communicate to the market the shareholdings considered “significant” held in companies with listed shares.
A “significant participation” is defined as the holding by a single entity of a set of shares or quotas representing a company that exceeds certain predetermined thresholds, acquiring the relevant significance.
In this case, to protect the transparency and information of the market, the owner of the participation takes the obligation to make known his position taken within the company.
Article 120 of the Consolidated Law on Finance (TUF) and the related implementation rules of Consob impose the obligation of disclosure to be borne by those who – directly or through interposed persons, trustees or subsidiaries – hold shareholdings with voting rights exceeding the 3% threshold (of 5% if the issuer is an SME); previously the threshold was common to all companies and was 2%.
Additional reporting obligations occur when the following thresholds are reached or exceeded by 5%, 10%, 15%, 20%, 25%, 30%, 50%, 66.6%, 90%, and in the event of a reduction of the participation below of the relevant thresholds.
The communication must be made both to the investee company and to Consob. The set of these provisions allows Consob to have a complete picture of the shareholding structure of listed companies.
Consob determines with its own regulation the terms and conditions of the communications concerning the significant holdings in the individual cases.
Failure to disclose significant participations may include:
a) an administrative sanction against the person responsible for the violation (article 193 of the TUF);
b) the suspension of voting rights relating to listed shares or financial instruments exceeding the threshold (see Article 120, paragraph 5, TUF);
c) the contestability of the resolution taken with the determining vote of the financial shares / instruments for which the right to vote was not allowed; the power to appeal is also for Consob (see Article 120, paragraph 5 of the TUF and Article 14, paragraph 5, of the TUF).
Consob aggregates the data received and makes available on its website the updated and historical information on the shareholding structure of listed companies, allowing investors to have access to detailed and updated information on the shareholding structure of listed companies.
Finally, it should be noted that Article 120 of the TUF was recently supplemented by Legislative Decree no. n. 148 of 16/10/2017 (converted by Law No. 172 of 4/12/2017) with the provision according to which, on the occasion of the purchase of a stake in listed issuers equal to or higher than 10 per cent thresholds , 20 per cent and 25 per cent of the relevant capital, the entity making the relevant disclosure must declare the objectives it intends to pursue during the following six months.
In this declaration are indicated:
a) the methods of financing the acquisition;
b) if he acts alone or in concert;
c) if it intends to stop its purchases or continue them, as well as if it intends to acquire control of the issuer or in any case exert an influence on the management of the company and, in such cases, the strategy it intends to adopt and the operations to implement it;
d) its intentions regarding any agreements and shareholders’ agreements to which it belongs;
e) if it intends to propose the integration or revocation of the administrative or control bodies of the issuer.
The declaration is sent to the company whose shares have been purchased and to CONSOB, as well as being disclosed to the public in accordance with the procedures and terms established by CONSOB itself. If within six months from the communication of the declaration there are changes of intentions based on the objective circumstances that have arisen, a new reasoned statement must be without delay addressed to the company and to CONSOB and brought to the public’s knowledge according to the same procedures. The new declaration re-runs the aforementioned six-month deadline again.
Source Borsa Italiana
