Legislative Decree 107/2018 clarifies new reporting obligations, disclosure obligations, and sanctions, effective September 29.

By Antonio Coletti and Isabella Porchia

Italy has published in the Italian Official Gazette Legislative Decree no. 107 of August 10, 2018, amending the Italian legislative provisions (Legislative Decree no. 58/1998) to transpose the Market Abuse Regulation no. 596/2014 (MAR). The decree will enter into force September 29, 2018 — marking Italy’s completion of the implementation process of MAR. The process began in March 2017 with the amendments to the Commissione Nazionale per le Società e la Borsa (CONSOB) Issuers Regulation.

Notably, the decree’s provisions provided clarity on:

  • Conditions for notifying delay of disclosure of inside information: The Italian Legislator has determined issuers will only be responsible for notifying the competent authority the reasons for the delay of disclosure of inside information upon request of such authority, rather than in all situations. Issuers shall always notify the competent authority of any other information about the delay required by MAR and Regulation (EU) 2016/1055 (e.g. identity of the issuer, contacts, date and time of the decision to delay, etc.).
  • Reporting obligations for persons discharging managerial responsibilities (PDMRs) transactions: The decree confirmed the reporting obligations of transactions on listed shares and related financial derivatives carried out by controlling shareholders of an Italian listed company or shareholders owning shares representing at least 10% of a listed company’s share capital, which was provided for under the previous domestic regime. Additionally, the decree confirmed the reporting obligations imposed by MAR to managers discharging managerial responsibilities
  • Disclosure obligations for issuers of widespread financial instruments: The decree confirmed the disclosure obligations of non-public price sensitive information applicable to issuers of widespread financial instruments which were provided for under the previous domestic regime. These obligations apply to:
    • Italian equity issuers with more than 500 shareholders owning at least 5% of the share capital, other than the controlling shareholders
    • Italian equity issuers that are not entitled to prepare simplified financial statements
    • Italian debt issuers with outstanding notes for an overall nominal amount of at least €5 million and with more than 500 noteholders
  • Sanctions: The decree set several key conditions for sanctions by:
    •  Including benchmark manipulation in the criminal offence of market manipulation
    • Increasing administrative/monetary sanctions applicable to insider dealing from €3 million to €5 million, in line with Article 30 of MAR
    • Adding new and specific administrative/monetary sanctions for unlawful disclosure of inside information, managers’ transactions, insider registers, and investment recommendations, in line with Article 30 of MAR

On the concurrent application of criminal and administrative sanctions for the same offence, the decree provided that the Judicial Authority or CONSOB, as the case may be, shall take into account the sanctions already imposed. Any monetary sanction shall be limited to the portion exceeding the amount already paid.