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Liquidity Decree - Golden Power Rules
by Alessandra Ferroni, Daniele Vecchi, Gabriella Covino, Giuseppe De Simone, Cristina Capitanio, Kathleen Lemmens, Luca Jeantet, Marco Martinelli
Published: April, 2020
Submission: April, 2020
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More Government & Public Sector | Corporate & Business Aricles → Latest Firm's PressGianni & Origoni Law Decree n. 23 of 8 April 2020 (the “Liquidity Decree”) has introduced significant changes to the socalled “golden power rules” and to the disclosure duty of relevant shareholdings in listed companies. These rules are aimed at discouraging “predatory purchases” of Italian strategic and listed companies in times when their share price may be particularly depressed due to the COVID-19 emergency. What are the main changes introduced under the Liquidity Decree with reference to the 'golden power' rules? In particular:
ART. 15 OF THE LIQUIDITY DECREE – THE NEW RULES APPLICABLE UNTIL 31 DECEMBER 2020 Extended scope of application to include sectors not previously covered Article 15 of the Liquidity Decree extends the duty to notify acquisitions of controlling interests by non-EU entities to all sectors referred to in EU Regulation 452/2019. These sectors include:
Extension of notification duty to EU person Always to contain the negative effects of the epidemiological crisis, until 31 December 2020 the notification duty for the acquisition of controlling interests in the Strategic Sectors is now extended to EU entities. Notification of significant shareholding in Strategic Sectors by non EU persons Moreover, always during the transitional period until 31 December 2020, non-EU persons are obliged to notify acquisitions of equity investments in the Strategic Sectors which, considered cumulatively with the stakes already held, allow them to reach a threshold of voting rights or share capital equal to 10, 15, 20, 25 and 50 per cent, provided that the value of the investment is at least equal to one million euro. Powers exercisable by the Government In any event, the special powers of the Government in connection with acquisitions or other notifiable resolutions concerning the Strategic Sectors may be exercised only to the extent that the protection of the essential interests of the State, security or public order, are not adequately guaranteed by the existence of a specific sector regulation. ART. 16 OF LIQUIDITY DECREE – AUTONOMOUS GOVERNMENT POWER TO INITIATE GOLDEN POWER PROCEDURE New autonomous powers for the Government to initiate the procedure aimed at exercising the special powers Article 16 of the Liquidity Decree extends the traditional remedies for a breach of the notification duty (i.e., the nullity of the relevant acts and administrative penalty for non-compliance) by giving the Government the autonomous power to ascertain the breach of the notification duty and to start at its own initiative the procedure to exercise its special powers. Moreover, to allow the Government to collect data or information useful for its assessment on the exercise of the Golden Power:
CHANGES INTRODUCED BY ART. 17 OF LIQUIDITY DECREE Lowering of thresholds for disclosure of relevant shareholdings Article 120 of the Consolidated Financial Services Act contains disclosure duties on relevant shareholding and authorizes CONSOB, the Italian Securities Regulator, to determine lower thresholds than the traditional ones (3% of the voting share capital or 5% for SMEs). This power can be exercised for “motivated reasons to protect investors and the efficiency and transparency of the market for corporate control and the stock market” and only with respect to “companies with a significant market value and particularly extensive shareholder base”. Article 17 of the Liquidity Decree has eliminated the requirement relating to the “significant market value” so that this power can now be exercised, regardless of the market capitalization so also for smaller listed companies with an extensive shareholder base. On 9 April 2020, CONSOB has exercised this power with resolution n. 21326, and has lowered the thresholds from 5% to 3% for SMEs and from 3% to 1% for all other listed companies. The companies concerned are listed in Annex. By 27 April 2020, any persons holding as of 11 April 2020 a participation in excess of these thresholds in any of the companies listed in Annex must disclose their interest according to the procedure and terms set out in article 120 of the Consolidated Financial Services Act. Strengthening of the “declaration of intent” rules for stakebuilding in listed companies Article 120 of the Consolidated Financial Services Act requires companies acquiring significant shareholdings (exceeding 10%, 20% and 25%) in listed companies to disclose the objectives they intend to pursue in the six months following the acquisition (the “declaration of intent”). Article 17 of the Liquidity Decree authorizes CONSOB, always for “motivated reasons to protect investors and the efficiency and transparency of the market for corporate control and the stock market” to provide for a lower threshold of 5% for the “declaration of intent”, always with regard to companies with an extended shareholder base, without any reference to its dimension or market capitalization.
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