The recently enacted Italian Law 262 of December 28 2005 has updated the legislation for protecting savings and regulating financial markets. It amends Legislative Decree 58 of February 24 1998 (the Financial Act). The changes have been made in two main areas.
Firstly, Law 262 has widened the powers of internal control bodies of listed companies. The board of auditors, the supervisory board and the management control committee can now direct requests for information on the results of company transactions or on specific transactions directly to the management and control bodies of the relevant subsidiaries of the company.
Each member of the board of auditors, of the supervisory board and of the management control committee has the right to convene meetings of certain company bodies (with the exception of the shareholders meeting, which must be convened by at least two members) and to be assisted by company employees in the performance of their functions.
The powers of the board of regular auditors of joint stock companies have also been strengthened. They now may approve the bringing of actions against the directors of a company.
Secondly, Law 262 has introduced new rules for the regulation of financial markets and for the issue of financial products by banks.
Before Law 262 was enacted, the provisions of article 94 (and following) of the Financial Act related to the regulation of public offerings did not apply to financial products issued by banks.
This exemption has been repealed and, consequently, a bank that intends to make a public offering has to give prior notice to Consob before preparing the relevant prospectus.
Also, the new article 100-bis of the Financial Act introduced by Law 262 provides that, in the case of public offerings and subsequent circulation of financial products in Italy, professional investors who transfer them are responsible for the solvency of the issuer towards non-professional investors for one year from the date of the issue.
Liability may only be excluded if the financial intermediary delivers an information memorandum containing the information that Consob requires to be provided to non-professional investors.