This content is from: Local Insights

Placement of securities in Italy

Article 129 of Legislative Decree No. 385 of September 1 1993 (the Italian Banking Act), as subsequently amended, requires the issuers or offerors of securities in Italy to notify the Bank of Italy in order to be allowed to place the securities in Italy.

Until October 2005 the Bank of Italy's instructions provided that the placement on the Italian market of securities having standard characteristics (the so-called standard securities) had to be previously notified to the Bank of Italy to the extent that the amount of the issue: (i) exceeded €50 million, with reference to a period of 12 months; (ii) exceeded €150 million in the case of securities listed or to be listed on regulated markets; (iii) did not exceed €250 million for cumulative or abbreviated notices.

The Bank of Italy has recently modified its instructions as a consequence of the development of the security market.

The Bank of Italy's new instructions provide that advance notice is required for standard securities when the amount of the transaction exceeds: (i) €2 billion (this amount is determined for each issuer and on the basis of transactions entered into in the last 12 months); (ii) €4 billion in the case of securities listed or to be listed on regulated markets (this amount is determined for each issuer and on the basis of transactions entered into in the last 12 months) and in the case of transactions made under the umbrella of a cumulative or an abbreviated notice.

The Bank of Italy has recently added other types of securities which can now be considered standard securities and which benefit from the new rules.

Under the new definition of standard securities fall:

  • plain vanilla call and put covered warrants whose underlying value is represented by listed shares, indexes on shares and currencies of certain countries;
  • notes with yields indexed to an official parameter (calculated by Eurostat or Istat) which show the general trend of the consumer prices in Italy or in the area of the euro;
  • covered bonds and German pfandbriefe;
  • targeted amount redemption notes having variable yields indexed to standard parameters contemplating early redemption in the event of reaching of the predetermined target yield;
  • loan participation notes whose circulation is restricted in Italy to professional investors;
  • securities issued by qualified companies (that is, banks and companies listed on regulated markets with registered offices in qualified states) or by issuers residing in qualified states (such as the member states of the EU), not exclusively destined to the shareholders, having at least one of the following two characteristics: (1) investment grade rating of the issue or of the issuer or of a guarantee; (2) the terms of the issue exclude any sale on the primary and secondary market to non-professional investors, if the securities have a minimum denomination of at least €50,000, when the transaction is mainly destined for the domestic market.

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