MNI:Italy To Boost Stock Market, Loosen Investment Rules-Draft

The Italian government is preparing legislation to make it more attractive for smaller companies to raise shares and to make it easier for pension funds to offer a broader range of investments to their clients, according to a draft seen by MNI.

The financial sector reform is part of the right-wing government’s push to direct more of the nation’s savings into investment at home, and to lure back funds currently leaving the country, an official close to the project said.

One measure would amend the legal definition of small- and medium-sized companies to include firms with capitalisations above EUR1 billion, double the current limit. This would make it easier for many smaller firms to list uncertified shares, a cheaper and less bureaucratic process than issuing certified stock.

Market regulator Consob would also have less power to oblige shareholders whose holdings in a company exceed a threshold to either reduce their stake or offer to buy the rest of the shares, according to the draft.

The current rule puts Italian issuers at a disadvantage to listed companies in other European jurisdictions which do not face similar requirements, the government considers.

CHANGES TO FUND REGULATION

The draft legislation would also amend the “professional client upon request” tests of investor experience which pension funds are required to apply to many of their clients before they can accept their money, making more clients eligible. Additionally new rules would reclassify SICAV and SICAF investment funds as not managing collective savings, reducing their regulatory burden.

The package is being backed by the governing coalition’s smaller League party, which has campaigned in favour of helping smaller companies, but may not be so well received by members of Prime Minister Giorgia Meloni’s Brothers of Italy, which is more hostile to financial speculation, the source said.

“After its approval in the council of ministers, the reform could be vote article by article,” the official said.