Borsa Italiana has released a new regulation, effective October 3, 2022, that simplifies the Euronext listing admission process.

Consistent with the listing rules of EU peer securities exchanges, the issuer and the sponsor (now referred to as the listing agent) will no longer be required to submit to Borsa Italiana the following documents:

(i) the budget and the business plan of the issuer.
However, issuers will still be required to (a) provide the listing agent (x) a budget (for the current year1), (y) a business plan (for the following two years) and (z) evidence that its working capital is sufficient for its present requirements (in line with the statement required to be included in the prospectus) and (b) engage an auditing firm to issue a comfort letter on the budget2  to the listing agent;

(ii) the memorandum on the management control system (sistema di controllo e gestione), which describes the control system implemented by the issuer and its subsidiaries (the "MCS"). 
However, issuers will remain responsible for the implementation of a sound MCS and be required to confirm to Borsa Italiana, on the basis of the analysis made by an external auditor, that they have adopted a MCS; 

(iii) the company valuation document (documento a supporto della valutazione);

(iv) a report comparing the issuer’s corporate governance model with the one provided under the Corporate Governance Code; and

(v) an analysis of overdue debts.

Listing Agent

The new rules have also reshaped the role of the sponsor (now referred to as the listing agent), which will no longer be required to submit to Borsa Italiana the statements supporting the issuer’s budget and MCS and will be the contact person for discussions with Borsa Italiana. The Listing Agent will nonetheless remain responsible for a period of at least one year after the IPO date to (a) produce at least two researches on the issuer per year; and (b) organize and attend at least two meetings per year between the management of the issuer and professional investors, except in the event of the appointment of a Specialist (see below). 

Pursuant to the new rules, the listing agent should be either a global coordinator and/or a bookrunner. Under the previous regime, the role of sponsor had to be coupled with the role of the lead manager of the public or institutional offering. 

Specialist

Newly-listed issuers with presumed capitalization below €1 billion are required to appoint a specialist for the three years following admission. The specialist, which remains required for issuers listing on the Euronext STAR Milan, is in charge of (i) displaying continuous bids and offers with a percentage spread that does not exceed the limits and the amounts established by Borsa Italiana; (ii) producing at least two researches on the issuer per year; (iii) organizing and attending at least two meetings per year between the management of the issuer and professional investors.

Conclusions

These new listing rules are part of a broader reform aimed at simplifying the offering and listing process in Italy, which started last month with the issuance by Consob of new rules relating to the use of the English language for the prospectus and its review procedure. A summary of the consolidated changes enacted by Borsa Italiana and Consob is summarized at Annex 1.

In general terms, the new listing rules introduced by Borsa Italiana represent a simplification of the listing admission process, which will be less onerous and in line with other EU listing venues. 

Such rules have also eased the liabilities of the sponsor (now referred to as the listing agent), as it will no longer be required to submit to Borsa Italiana the statements supporting the issuer’s budget and MCS as well as the company evaluation document. The listing agent, however, will still be responsible for the appropriate due diligence of the business plan and the budget. 

Annex 1 – Summary of the main recent rules affecting the offering and listing of ECM prospectuses

Topic Old Rules New Rules Effectiveness
Pre-filing Pre-filing may relate to any information regarding the offering and/or the listing. Pre-filing is limited to material issues relating to the offering and/or the listing (e.g. presentation of financial information for issuers with a complex financial history, preparation of pro-forma financial information, profit forecasts or estimates). August 20, 2022
CONSOB "Completeness"  review process

Preliminary review for completeness: 

  • Consob can request additional information and/or documentation within 10 business days from receipt of the listing application;
  • issuer has 10 business days from the date of the request to provide such additional infrmation and/or documentation to Consob.
No preliminary review for completeness. August 20, 2022
Overall review process Review period of no more than 60 business days (starting from the completion of the listing application).

Review period of no more than 20 business days after first filing (even if the listing application is incomplete).

Additional review period of up to 10 business days (starting from the submission of the revised prospectus) if Consob asks for additional information.

August 20, 2022
Documentation for Borsa Italiana Submission to Borsa Italiana of a detailed set of documents for listing application. As compared to previous regime, no need for the issuer to file the following documents:

  • the budget and the business plan;
  • the memorandum on the management control system;
  • the issuer’s valuation document;
  • the issuers’ audited financial statements and the related report of the external auditor;
  • a report comparing the issuer’s corporate governance model with the one provided under the Corporate Governance Code;
  • an analysis of overdue debts.
October 3, 2022
Sponsor/Listing Agent

Submission to Borsa Italiana of several statements, including those supporting the issuer’s budget and MCS.

The listing agent will no longer be required to confirm to Borsa Italiana that: 

  • the MCS conforms to that described by the issuer in the memorandum on the MCS (which had to be prepared in line with Borsa Italiana requirements);
  • the forecasts in the business plan for the financial year under way were prepared by the issuer after careful and thorough examination. 

Listing Agent shall nonetheless receive by the issuer:

  • the budget and the business plan;
  • a comfort letter on the budget of the issuer.
October 3, 2022
The role of sponsor had to be coupled with the role of the lead manager of the public or institutional offering. The listing agent can be a global coordinator and/or bookrunner.
Specialist Required for Euronext STAR Milan issuers only. Required for Euronext STAR Milan issuers and Euronext Milan issuers with presumed capitalization below €1 billion. October 3, 2022

1 If a listing application is submitted after September 15th, the budget is additionally required to cover the first six months of the following year.
2 The issuer is required to engage the assistance of an auditing firm, which shall certify to the listing agent that the budget figures have been determined by the issuer after a careful and thorough examination of the economic and financial prospects of the group or shall issue a special attestation prepared in accordance with the best international practice

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