Legislative Decree No 49 of 10 May 2019 was published in the Official Gazette No 134 of 10 June 2019, in implementing the Directive 2017/828 (“SHRD II “), thereby amending Directive 2007/36/EC (“SHRD I “) regarding the encouragement of the long-term commitment of shareholders.
In particular, the decree transposes the regulatory safeguards introduced by the ” SHRD II ” directive aimed at improving the governance of listed companies, thereby strengthening their competitiveness and long-term sustainability, in particular through (i) greater and more conscious involvement and commitment of shareholders in the medium and long term in corporate governance; (ii) facilitating the exercise of their rights.
Main changes
Article 1 of Legislative Decree no. 49 of 10 May 2019 amends Article 2391-bisof the Italian Civil Code, entrusting Consob with the task of identifying certain aspects relating to transactions with correlated parties (materiality thresholds; procedural and transparency rules; cases of exemption from the rules; obligation to abstain from the resolution of transactions). In addition, art. 4 of Legislative Decree no. 49/2019 introduces new administrative sanctions in relation to transactions with correlated parties: pursuant to the new art. 192-quinquiesof the Consolidated Finance Act “against companies listed on regulated markets that violate art. 2391-bis of the Italian Civil Code and the related implementing provisions adopted by Consob pursuant to the same article, a pecuniary administrative sanction is applied between 10,000.00 and 150,000.00 Euro. Unless the act constitutes a crime, for the violations indicated in paragraph 1, a pecuniary administrative sanction of between 5,000.00 and 150,000.00 euros shall be applied to persons performing administrative and management functions in the cases provided for in article 190-bis, paragraph 1, letter a)”.
The new regulations also concern the provisions of the Consolidated Finance Act (Legislative Decree no. 58/1998) and, in particular:
(i) Part IV, Title III, Chapter III of the Consolidated Finance Act, which regulates, inter alia, the report on the remuneration policy and the remuneration paid. Through the introduction of Article 192-bis, paragraph 1.1. of the Consolidated Finance Act companies listed on regulated markets who violate the provisions of Article 123-terof the said Act , as well as persons performing administrative, management or control functions, if their conduct has contributed to the violation of the aforementioned provisions by the company, will be sanctioned for an amount from 10,000.00 to 150,000.00 Euro or be sanctioned in accordance with paragraph 1, letters a) and b) of Article 192 bisof the Consolidated Finance Act. The persons appointed to carry out the statutory audit of the financial statements, who have failed to verify that the second section of the report has been prepared, are also punished by applying a pecuniary administrative sanction ranging from 10,000.00 to 100,000.00 euros (art. 193-bis, paragraph 1-sexiesof the Consolidated Finance Act);
(ii) the tasks of intermediaries in relation to the identification of shareholders holding more than 0.5% of the share capital, with voting rights pursuant to the new Article 83-duodeciesof the Consolidated Finance Act, that the issuer, regardless of an ad hoc provision in the Articles or By-laws, (a) may request the identification of shareholders holding more than 0.5% of the share capital with voting rights to the persons indicated in the regulation to be issued by Consob, in agreement with the Bank of Italy, pursuant to Article 82, paragraph 4-bis, letter b of the Consolidated Finance Act, (b) must make the same request also when requested by shareholders representing at least half of the minimum shareholding established by Consob pursuant to Article 147-ter, paragraph 1 of the Consolidated Finance Act. In addition, the rules governing the transmission of relevant information and the facilitation of the exercise of shareholders’ rights, as well as the costs associated with such services, have been amended;
(iii)the regulation of the centralised management of financial instruments: art. 2 of the aforementioned decree provides that Consob, in agreement with the Bank of Italy, must adopt a regulation containing the implementing provisions of Directive 2007/36 EC for the aspects regarding the centralised management of financial instruments. From the point of view of sanctions, the new Article 190.1-bisof the Consolidated Finance Act punishes the intermediaries referred to in Article 79-decies, paragraph 1, letter b) for non-compliance with the provisions of Article 83-novies, paragraphs 1, letters g) and g-bis and Article 83-novies-1, by means of a pecuniary administrative sanction ranging from 3,000.00 to one 150,000.00 euros;
(iv) Chapter II of Title III of Part IV of the Consolidated Finance Act by introducing the specific section I-teron the transparency of institutional investors, asset managers and voting consultants. With the introduction of the new Article 193-bis1 of the Consolidated Finance Act, the legislator provided that, in the event of a breach of the rules introduced by Section I-terof the Consolidated Finance Act, “a pecuniary administrative sanction ranging from 2,500.00 to 150,000.00 euros shall be applied to institutional investors and asset managers in the event of a breach of Articles 124-quinquies, 124-sexies and 124-septies, as well as to voting consultants in the event of a breach of Article 124-octies or of the relative implementing provisions“;
(v) in general, the sanctioning rules contained in Part V of the Consolidated Finance Act.
Entry into force
The new rules, introduced by Legislative Decree no. 49 of May 10, 2019, came into force on June 10, 2019 with the exception of:
(a) Article 2 including the Amendments to Part III, Title II -bis, Chapter IV and Article 3, paragraph 3 of the Consolidated Finance Act (which adds the new paragraph 2-bis to Article 125-quater of the Consolidated Finance Act) which will apply from the date of application of Implementing Regulation (EU) 2018/1212 of 3 September 2018 (i.e. 3 September 2020);
(b) Article 3, paragraph 1, concerning the report on the remuneration policy and the remuneration paid, which applies to the remuneration reports and remuneration paid to be published at the shareholders’ meetings held to approve the financial statements for the financial years starting from 1 January 2019;
(c) Article 3, paragraph 4, which amends Article 127-ter of the TUF on the subject of the right of shareholders with voting rights at shareholders’ meetings to ask questions before the shareholders’ meeting, amending paragraph 1-bis, which applies to shareholders’ meetings whose notice of call will be published as of January 1, 2020;
(d) Article 3, paragraph 2, including the new rules on the transparency of institutional investors, active managers and voting consultants, which shall apply one year after the entry into force of Legislative Decree No 49 of 10 May 2019 (i.e. 10 June 2020).
Finally, Article 7 of Legislative Decree no. 49/2019 provides that the implementing provisions provided for by the same legislative decree must be adopted within 180 days of its entry into force, with the exception of those provided for by Article 2 and Article 3, paragraph 3, which will be adopted within 24 months of the adoption of the implementing acts referred to in Article 3-bis, paragraph 8, Article 3-ter, paragraph 6, and Article 3-quater, paragraph 3, of Directive 2007/36/EC (“SHRD I”).
The implementing provisions issued pursuant to the provisions replaced or repealed by Legislative Decree no. 49/2019 are repealed from the date of entry into force of the new provisions in the corresponding areas. Until that date they shall continue to apply.
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