INTERNATIONAL INVESTMENT CONSULTING

Regulatory background

Italian competition regulations

Rules on competition are established at different levels, the first of which is the general rule on ‘fair’ business behavior set out by the Italian Civil Code. Secondly, the Italian Civil Code establishes a limited number of exceptions, such as non-competition agreements concluded upon termination of an employment contract or a transfer of a going concern. A third set  of rules,  based on articles  81 and 82 of the EC Treaty, establishes the legal framework of control over competition matters and the Italian Competition Authority (Autorità Garante della Concorrenza e del Mercato). This Authority operates according to the EU principles established by the EU Commission and Court of Justice and monitors the following matters:

Business agreements and practices which may have an adverse impact on competition

Business combinations that may give rise to market dominance

State aid

It has  the  power to  determine the  conditions on  which  business combinations  must be realized,  to stop  them if they  may lead to a dominant position  on the market, and to issue fines and sanctions.

Various public authorities have supervisory and regulatory powers over companies operating in specific fields.

The Banking Authority supervises the activities and organization of banks and financial institutions listed in the register indicated by article 107 of the Italian Banking Law, monitoring their management and compliance with the applicable laws and regulations.
It examines the documentation and statistics sent to it by the above bodies, and carries out inspections of banks and other financial institutions.

Another part of the Banking Authority’s role is to protect transparency in all financial and banking transactions, also in order to improve relations with end customers.

The Insurance Authority was set up by Law no. 576/1982, in order to supervise insurance companies and all other parties governed by insurance law, including agents and insurance brokers.

The Authority monitors and regulates the   market and operators, also by making   the necessary inspections and issuing fines where appropriate. Its mission includes protecting end customers, supervising the text of contracts, reviewing claims, and verifying the fair conduct of insurance companies.

The Energy Authority was set up by Law no. 481/1995 in order to regulate and supervise the electricity and gas markets. The Authority is empowered to:

Fix maximum tariffs for services, in order to ensure certainty and transparency to the benefit of end customers

Define  guidelines for the production and supply of energy and gas,  set  quality standards, check  compliance, and establish the refunds to be made to end customers where applicable

Verify that said guidelines are actually observed and impose penalties

Verify that competition laws and regulations are observed by the companies operating in the electricity  and gas markets, and inform the relevant authority in the event of violations

Examine claims and petitions filed by end customers, promoting settlements with operators where appropriate or ordering operators to modify their service provision.

SECURITIES OFFERS &
PROSPECTUS APPROVAL regulatorybackground

In line with EU directives, issuers offering securities must produce a prospectus in order to ensure that investors receive all the relevant information. The prospectus must be approved by Consob, the public authority responsible for regulating the Italian securities market; and the information provided in the prospectus must be complete, coherent and understandable. Once approved, the prospectus can also circulate in other EU Member States for local offering.

The  prospectus must contain  full details  of  the  offer  and  information about  the  issuer, including  corporate  governance,  any  shareholders’  agreements,  the  key  performance indicators of the  business and,  in general, any  factors,  either  internal  or external to  the issuer, which may have an impact  on the terms of the offer.

Specific rules are set  for takeover bids for listed companies: if, as a result  of acquisition, one or more  investors acquire  over 30 percent of the capital, a takeover bid must be addressed to all the  other  shareholders for the  purpose of acquiring  100 percent of the  capital. There are further rules if one or more investors own more that 90 percent of a listed company or own between 30 percent and 50 percent of the capital and increase their interest.

There are squeeze-out rules for investors owning over 98 percent of the share capital as a consequence of a take-over bid.