Italy – Legislative Decree No. 17/2021: Implementation of the EU Prospectus Regulation

On February 2^nd, 2021, the Italian Legislator enacted the Legislative Decree No. 17/2021 ("Decree") aimed at implementing within the Italian statutory framework EU Regulation No. 1129/2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market ("Prospectus Regulation").

The main amendments introduced by the Decree affect the Italian Consolidated Act on Financial Intermediation (i.e. Legislative Decree No. 58/1998, "Testo Unico della Finanza" – "TUF") and are primarily finalized at aligning the provisions of the TUF with the Prospectus Regulation, by also simplifying it and avoiding useless duplications.

In that respect, the newly introduced definition of "Prospectus Regulation" ("regolamento prospetto") (by way of amendment to Article 93-bis of the TUF) plays a central role, replacing certain original provisions of the TUF by way of simple reference to the relevant rules set out by the Prospectus Regulation.

The Decree introduces significant amendments to Article 94 of the TUF. In particular, the restated version of such Article 94:

1. (a)sets forth that, in addition to the provisions contained in the TUF, the public offer of securities is regulated by the provisions of the Prospectus Regulation; and
   

2. (b)designates CONSOB (i.e. the Italian Regulator) as competent domestic authority for the purposes of Article 31, Par. 1, of the Prospectus Regulation (i.e. the authority responsible for carrying out the duties resulting from the Prospectus Regulation and for ensuring that the provisions thereof are applied); and
   

3. (c)for the purposes of Article 11 of the Prospectus Regulation, specifies that the persons responsible for the prospectus shall be clearly identified by their names and functions and that the prospectus shall contain declarations by them that, to the best of their knowledge, the information contained therein is in accordance with the facts and that there is no omission likely to affect its import.
   

Further, pursuant to Articles 32 and 37 of the Prospectus Regulation, the Decree supplements Article 99 of the TUF, by enlarging the CONSOB's powers with – in particular – the additional authority:

1. (a)to suspend the approval of a prospectus or suspend or restrict an offer of securities to the public, as a consequence to prohibitions or restrictions imposed pursuant to Article 42 of EU Regulation No. 600/2014 ("MiFIR Regulation"), until such prohibition or restriction has ceased (a so called "product intervention"); and

2. (b)to exercise the precautionary measures set out under Article 37 of the Prospectus Regulation in order to protect investors when there are clear and demonstrable grounds for believing that irregularities have been committed under the Prospectus Regulation; and 

3. (c)to require issuer or offerors to include in the prospectus supplementary information, where necessary for investor protection.

From an Italian perspective, the Decree constitutes an essential step forward in the process of harmonization of the legislation on financial intermediation, as well as towards the completion of the Capital Markets Union.

The provisions contained in the Decree will enter into force on March 11^th, 2021.