Member News

Italy Bans Short Selling and Lowers Thresholds for Material Shareholdings

Temporary Ban on Net Short Positions in Response to Market Turmoil in the Wake of Covid-19 Outbreak

On March 17, 2020, CONSOB, the Italian markets and securities regulator, introduced an outright temporary ban on taking or increasing net short positions in respect of all shares admitted to trading on the Mercato Telematico Azionario (MTA), the Italian regulated stock market, pursuant to the terms of EU Regulations 236/2012 and 918/2012. The list of the restricted shares is included in Annex A.

The temporary ban applies to shares and all related instruments relevant for the calculation of the net short position, including derivatives. The prohibition applies to all legal and natural persons, both within and outside Italy, and to any trading, including OTC transactions. The measure does not apply in certain cases specified in the CONSOB resolution (e.g., market making activities).

The temporary ban applies from the start of the trading day on March 18, 2020 until the end of the trading day on June 18, 2020. The restrictions may be lifted by CONSOB before expiration of this term, subject to market conditions.

New Thresholds for Material Shareholdings

On the same date, CONSOB introduced, on a temporary basis, broader transparency obligations with respect to material shareholdings in 48 companies whose shares are listed on the MTA. In particular, CONSOB set the initial threshold at which significant holdings in voting interests in large caps and small- and medium-sized enterprises (SMEs) must be reported at 1% and 3%, respectively (from 3% and 5%, respectively). The new regime applies to the companies listed in Annex B.

This stricter regime came into force on March 18, 2020 and applies for three months. Holders of voting interests that reach or exceed the aforementioned thresholds on March 18, 2020 must file a report with the CONSOB and the issuer within the next ten business days.

Tobia Croff, Partner, Milan
Domenico Fanuele, Partner, Rome
Fabio Fauceglia, Partner, Milan
Valerio Fontanesi, Partner, Milan
Emanuele Trucco, Counsel, Milan
Marco Barbi, Associate, Milan 

Compliments of Shearman & Sterling LLP – a member of the EACCNY.