On 17 November 2023, by notice No. 43747 (“Notice”), Borsa Italiana S.p.A. (“Borsa Italiana”) informed the market of the introduction of certain significant amendments to the Euronext Growth Milan Issuer R…
On 25 June 2021, Borsa Italiana S.p.A. (“Borsa Italiana”), by notice No. 22008 [1] (“Notice”), notified the market of the introduction of certain amendments to the AIM Italia Issuers Regulation (“Issuers Regulation”), the relevant Guidelines and Related Party Rules, which shall come into force according to the timescales specified below.
First and foremost, through certain amendments made to the Issuers Regulation, Borsa Italia intended to rationalise the regime for the transmission and publication of company information.
Second, the amendments made to the Related Party Rules proved to be necessary in order to bring the Rules into line with the amendments made by Consob to the regulations adopted by Resolution No. 17221 of 12 March 2010, containing provisions on related party transactions (“RPT Regulations”), as a result of the transposition of Directive (EU) 2017/828 as regards the encouragement of long-term shareholder engagement (“SHRD II”).
The first changes of interest to AIM Italia issuers concern the rules on the transmission and publication of company information and will come into force on 12 July 2021.
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Borsa Italiana supplemented Article 17 of the Issuers Regulation (specifically renamed “Company information disclosure”), on the subject of company information, by including, within the scope of the information to be disseminated and published by the AIM Italia issuer, also “the procedure for publication of any document made available to the holders of financial instruments traded on the AIM Italia market”.
At the same time, Article 20 of the Issuers Regulation and the related Guidelines, regulating the methods of publication of the documents made available to the holders of financial instruments traded on the AIM Italia market, were deleted, since such provisions are now included in the scope of Article 26, containing the rules relating to the publication of company information.
Precisely in relation to Article 26 of the Issuers Regulation (likewise renamed to “Publication and filing of company information”), an important innovation must be mentioned in respect of AIM Italia issuers: (i) first, it was envisaged that press releases and documents must remain on the website of the AIM Italia issuer for at least 5 years; (ii) second, Borsa Italiana also envisaged that the documents made available to the holders of financial instruments traded on the AIM Italia market (to be published on the website) shall include any explanatory reports for shareholders' meetings and minutes of shareholders' meetings.
AIM Italia issuers will therefore be required to publish on their website any explanatory reports prepared in relation to the meeting agenda as well as meeting reports, in relation to which no obligation applied before the introduction of the amendments under examination.
Finally, it should be recalled that Article 17.9 of Regulation (EU) No. 596/2014 provides that Inside information relating to issuers whose financial instruments are admitted to trading on an SME growth market such as AIM Italia may be posted on the trading venue’s website instead of on the website of the issuer where the trading venue chooses to provide such facility for issuers on that market.
In such context, it must be underlined that the Notice discloses Borsa Italiana’s intent to develop a specific electronic channel for filing with Borsa Italiana and for the publication on its website of press releases and other relevant information required by the regulations [2].
To that end, the Guidelines to Article 26 were supplemented to specify that: (i) with regard to information (including press releases and documents) for which Borsa Italiana has set up a specific electronic transmission channel, the AIM Italia issuer shall transmit that information through that channel; and (ii) the AIM Italia issuer may decide not to publish the information on its own website that it has transmitted to Borsa Italiana through such electronic channel [3].
The further amendments introduced by Borsa Italiana relate to the rules on related party transactions, which proved necessary following Consob Resolution No. 21624 of 10 December 2020, amending the RPT Regulations in order to implement the SHRD II [4]
In view of the continuation of the health and economic emergency and in view of the forthcoming revision of Communication No. DEM/10078683 of 24 September 2010, a transitional period is envisaged until 30 June 2022 within which the issuing companies (not having distributed instruments) must adapt their procedures to the new provisions and the consequent entry into force of the regulatory amendments as from 1 July 2022 [5].
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Preliminarily, it should be recalled that Article 13 of the Issuers Regulation provides that “Consob’s regulation on related parties transactions applies as provided for by Article 10 of Consob regulation No. 17221 of 12 March 2010 for certain types of issuers, also as regards non-widely distributed issuers” ([6]).
Therefore, in light of the amendments made by Consob to the provisions of the RPT Regulations and in keeping with the regulatory approach adopted by the AIM Italia Rules concerning the discipline of related party transactions, Borsa Italiana made some limited adjustments, namely concerning:
(i) Definition of related party
Like the RPT Regulation, which refers to the definition of related party contained in the international accounting standard in force, a moving reference to the definitions contained in the international accounting standards was added. As a consequence, Annex 1 was removed.
(ii) Approval procedures
In view of the importance of the involvement of the entire board of directors for transactions of greater importance, the retention of the power by the board to resolve upon transactions of greater importance was introduced.
Further procedural amendments concerned the clarification of certain obligations, namely: (i) setting out the duty of the committee of independent directors to verify in advance the independence of any expert selected and classified as independent; and (ii) setting out the obligation to attach the opinion of the committee of independent directors to the minutes of the meetings of that committee.
(iii) Cases of exemption
Cases of exemption were introduced for transactions addressed to all shareholders on equal terms (e.g. proportional partial demergers, rights issues, reductions in share capital through repayment to shareholders under Article 2445 of the Italian Civil Code) and transactions relating to remuneration plans based on financial instruments approved by the shareholders’ meeting, the latter case already regulated by the RPT Regulations in force.
Furthermore, with regard to exemptions concerning remuneration decisions, it was specified that exemption applies only to remuneration decisions in relation to which the issuer has adopted associated remuneration policy subject to the approval of the shareholders' meeting, determined in line with the regime set and without any discretionary judgements.
The case of exemption applicable in the event of urgency was maintained, without prejudice to the reservation of competence by the Board of Directors applicable to transactions of greater importance.
The introduction of an ex-post verification of the application of exemptions was provided for ordinary transactions of greater importance undertaken at market or standard conditions. In this regard, with particular reference to the above cases, the Related Party Rules were amended in order to ensure that the procedures adopted by the AIM Italia issuers shall set out the terms and timescales under which the directors who express opinions on transactions with related parties verify the correct application of exemption conditions.
Another novelty is the obligation for AIM issuers to identify transactions for smaller amounts according to criteria differentiated at least based on the nature of the other party (e.g. natural persons, legal persons), with consequent disapplication of the provisions for transactions for smaller amounts.
Finally, Borsa Italiana provided for a specific periodic information flow at least for exempted transactions of greater importance, to enable the directors who express opinions on transactions with related parties to carry out an ex-post examination.
(iv) Information to the market
The Related Party Rules were amended in order to provide that, if a related party transaction is disclosed within a press release issued pursuant to Article 17 of Regulation (EU) 596/2014, that press release must include, in addition to the other information to be published pursuant to the aforementioned regulation, the minimum items of information set out in Article 3 of the Related Party Rules.
With regard to the disclosure document concerning significant transactions, it was specified that, should the board of directors use an independent expert, the opinion of that expert must be published as an attachment to the disclosure document.
(v) Obligation of abstention for directors involved in a transaction
Borsa Italiana also clarified that, in accordance with the provisions of the SHRD II and of the new RPT Regulations with respect to companies with shares available to the public, no abstention obligation shall apply to directors involved in transactions with related parties, which only applies to companies listed on regulated markets.
This article is for information purposes only and is not, and cannot be intended as, a professional opinion on the topics dealt with. For further information please contact Lukas Plattner.
News[1] Notice available at the following link: https://www.borsaitaliana.it/borsaitaliana/regolamenti/avvisi/avviso22008-aim.pdf.
News[2] With reference to the electronic channel to be developed by Borsa Italiana, the market management company will publish a specific Notice announcing the activation of the aforementioned channel.
News[3] Such exemption, of which evidence must be provided through the publication of a specific press release and after having indicated it on its website, also inserting a hyperlink to the website of Borsa Italiana in order to find the documentation published therein), is justified in consideration of the fact that they will be automatically made available, free of charge, on the website of Borsa Italiana for a period of not less than 5 years.
News[4] In this regard, it should be recalled that Consob amended the RPT Regulation in order to implement the SHRD II following the update of the primary legislation by means of the adoption of Legislative Decree 49 of 10 June 2019, which among other things amended Article 2391-bis of the Italian Civil Code regarding related party transactions, giving the Authority the power to specify the detailed aspects at a regulatory level.
News[5] The introduction of a transitional period is aimed, on the one hand, at giving companies a reasonable period of time to revise their procedures and, on the other hand, at observing the concrete application by companies listed on regulated markets and by issuers with widely distributed instruments of the amendments made by Consob to the RPT Regulation.
News[6] Borsa Italiana has in this regard recalled that the decision to align the controls envisaged for transactions with related parties with those envisaged for smaller companies listed on regulated markets, newly-listed companies, and companies with shares available to the public is first and foremost aimed at meeting the need to ensure an adequate level of protection for investors and, secondly, at bringing the AIM Italia companies into line with the implementation of the regime that they would in any case be required to apply when the financial instruments listed on AIM Italia become available the public, as well as in the event of any subsequent transfer of the listing from AIM Italia to a regulated market.
