Avv. Salvatore Providenti Bergamo University 28.11.2016 The slides are based on a common work with Avv. Alessandra Atripaldi
Introd oduction on to to Europea ean and nd national a. a. securi rities la law 1) Freedom of movement 2) Rules and institutions in Italy The mai Th main set set of of ru rule les b. b. 1) The MIFIR-MIFID framework 2) The MAR-MAD framework 3) The Transparency and Prospectus Framework 4) The Takeover Directive
Art. 26.2 of the Treaty on the Functioning of the European Union “The internal market shall comprise an area without internal frontiers in which the free movement of goods, p ersons, services and capital is ensured in accordance with the provisions of the Treaties”.
Admission of securities to official stock‐exchange ‐ listing and information to be published • Rights of shareholders in listed companies • Transparency of information about issuers of securities • Prospectus to be published when securities are • offered to the public or • admitted to trading on a regulated market • Takeover bids • Market abuse • Credit rating agencies • Investment research and financial analysts • Investment funds (UCITS): • applicable rules • organisational requirements and rules of conduct • Investment services: • MiFID and investment services • Capital adequacy of investment firms and credit institutions • Investor compensation schemes •
Consolidated Law 58/1998 and executing regulations (“ TUF ”) • Minister of the Economy and Finance (Treasury) • Consob • Bank of Italy • Borsa Italiana S.p.A. • Consob and Bank of Italy Regulations • Central Depositary of Financial Instruments (Montetitoli) • Compensation systems • Judicial system (criminal, administrative and civil courts) • Relationships with other Authorities •
The Commissione Nazionale per le Società e la Borsa (CONSOB) is the public authority responsible for regulating the Italian securities market. • Born in 1974 • Main Law: LEGISLATIVE DECREE No. 58 OF 24 FEBRUARY 1998 Consolidated Law on Finance pursuant to Articles 8 and 21 of Law no. 52 of 6 February 1996 • Its activity is aimed at the protection of the investing public. In this connection, the CONSOB is the competent authority for ensuring: • transparency and correct behaviour by securities market participants • disclosure of complete and accurate information to the investing public by listed Companies; • accuracy of the facts represented in the prospectuses related to offerings of transferable securities to the investing public; • compliance with regulations by auditors entered in the Special Register • It conducts investigations with respect to potential infringements of insider dealing and market manipulation law.
ESMA is an independent EU Authority that contributes to safeguarding the • stability of the European Union's financial system by ensuring the integrity, transparency, efficiency and orderly functioning of securities markets, as well as enhancing investor protection. In particular, ESMA fosters supervisory convergence both amongst securities regulators, and across financial sectors by working closely with the other European Supervisory Authorities competent in the field of banking (EBA), and insurance and occupational pensions (EIOPA). REGULATION (EU) No 1095/2010 OF THE EUROPEAN PARLIAMENT AND OF • THE COUNCIL of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority ‐ ESMA)
The objectives of supervisory activities indicated in this section shall be: • a) the safeguarding of faith in the financial system; • b) the protection of investors; • c) the stability and correct operation of the financial system; • d) competitiveness of the financial system; • e) the observance of financial provisions • For the pursuance of objectives indicated in subsection 1, the Bank of Italy shall be • responsible for risk containment, asset stability and the sound and prudent management of intermediaries For the pursuance of objectives indicated in subsection 1, Consob shall be • responsible for the transparency and correctness of conduct
Art. 74 • Consob shall supervise regulated markets with the • aim of ensuring the transparency of the market, the orderly conduct of trading and the protection of investors Art. 91 • Consob shall exercise the powers provided for in this • Part (ISSUERS) having regard to the protection of investors and the efficiency and transparency of the market in corporate control and the capital market
1) 1) The he MIF MIFIR IR-MIFID MIFID fra framework 2) 2) The he MAR AR-MA MAD fra framework 3) 3) The he Prospec ectus us Regula latio ion 4) 4) The he Take keover Dire irective ve 16/06/17
16/06/17
• OLD REGIME • MIFID1 : Markets in financial instruments and investment services: Directive 2004/39/ of 21April 2004 on markets in financial instruments • NOW • MIFID2 – Directive n. 2014/65 of 15.5.2014 • harmonization : requires the Member States to harmonise the rules governing investment services and activities. To that end, the Member States must set up an authorisation system enabling investment firms to operate throughout the EU. These firms must be registered andthe register must be accessible to the public. Each authorisation is notified to the European Securities and Markets Authority (ESMA). • Investor protection: considerably enhanced by setting business of conduct rules for providing investment services to clients and minimum standards for the mandate and powers that national competent authorities must have at their disposal. It also establishes effective mechanisms for real ‐ time cooperation in investigating and prosecuting breaches of the rules. • MIFIR – Regulation n. 600/2014 of 15.5.2014 (applicable as of 3.1.2018) – PRODUCT INTERVENTION
In providing investment and non‐core services and activities, authorised • intermediaries must: a) act diligently, fairly and transparently in the interests of customers and the integrity of the market. b) acquire the necessary information from customers and operate in such a way that they are always adequately informed; c) use publicity and promotional communications which are correct, clear and not misleading, d) have resources and procedures, including internal control mechanisms, suitable for ensuring the efficient provision of services and activities
In the provision of investment services and activities and accessory services, Italian • investment companies, non‐EU investment companies, asset management companies, harmonised asset management companies, financial intermediaries registered in the list pursuant to Article 107 of the Consolidated Law on Banking, Italian banks and non‐EU banks: a) shall adopt all reasonable measures to identify and manage conflict of interest which may arise with the customer or between customers, also by the adoption of appropriate organisational measures, in order to avoid a negative impact on the interests of the customer; b) shall clearly inform customers, prior to acting on their behalf, of the general nature and/or sources of conflict of interest where measures taken pursuant to paragraph a) are not sufficient to ensure, with reasonable certainty, that the risk of damaging the interests of the customer is avoided; c) shall perform independent, sound and prudent management and take measures to safeguard the rights of customers with regard to their assets
INVESTMENT CONSULTANCY AND PORTFOLIO MANAGEMENT • The intermediaries must know from the customer • a) awareness and experience of the investment sector relevant to the type • of instrument or service; b) the financial position; • c) the investment objectives. • Where intermediaries providing investment consultancy or portfolio • management services are unable to obtain the information required under this article, they shall abstain from providing said services
Based on information obtained from the customer, and taking into account the • nature and characteristics of the service provided, the intermediaries shall assess whether the specific transaction recommended or executed as part of the provision of portfolio management services satisfies the following criteria: a) correspondence with the customer’s investment objectives; b) the nature of the transaction is such that the customer is financially able to face any risk related with the investment compatible with his investment objectives; c) the customer has the necessary experience and awareness of the nature of the transaction to understand the risks involved in such a transaction or management of the portfolio Where the services are provided to a professional customer , intermediaries may • presume that, with regard to the instruments, transactions and services for which said customer is classified as a professional customer, he has the necessary level of experience and awareness
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