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Milan stock exchange lost prominent companies in recent
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Treasury eyes multiple-vote shares to attract newcomers
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Draft bill strengthens self-placement, limits damage
claims
By Giuseppe Fonte ROME, April 11 (Reuters) - Italy is set to approve a bill on Tuesday that aims to strengthen the country's capital markets and reinforce the Milan Stock Exchange's ability to compete with European peers. Prime Minister Giorgia Meloni's office has called a cabinet meeting to approve the scheme at 1300 GMT. The package introduces measures to speed up the listing process and to attract newcomers to the Borsa Italiana, after the loss of prominent companies, including infrastructure group Atlantia, over recent years. Among other things, Italy plans to enhance voting rights to persuade entrepreneurs to list their businesses in Milan without worrying about losing control to other investors, a draft seen by Reuters showed. Some of the companies that have delisted from Milan were drawn to bourses, such as Amsterdam, where regulations allow leading shareholders to maintain a tighter grip.
The bill allows non-listed companies to issue special shares that give existing investors a right to cast up to 10 votes for each share owned, surpassing the current limit of three votes. Companies are able to preserve these shares following the initial public offer (IPO). Current Italian rules prohibit listed firms from issuing multiple-vote shares, except in the form of a so-called "loyalty share scheme", that confers double voting rights to long-standing shareholders of at least 24 months. Institutional investors usually advocate for the "one share, one vote" principle to grant equal treatment to all shareholders. The Treasury believes that strengthening the ability to issue multiple-vote shares prior to listing is a good compromise, because any investors in the company would know in advance that after the IPO they would be sharing ownership with more powerful shareholders, government officials have said. Rome also wants to allow a wider range of firms to benefit from incentives already provided for small and medium-sized enterprises (SMEs) that plan to list. A company is currently classified as an SME when its capitalisation is below 500 million euros ($545.05 million). The draft bill would increase that threshold to 1 billion euros. Another measure would reduce the extent to which regulators, such as market watchdog Consob, can be held responsible for investor losses, a move the Treasury believes could speed up the IPO approval process. Under the bill, the institution will only be responsible for direct damages due to the absence, or mistakes, in supervisory activities.
In addition, the scheme reinforces the possibility of bypassing the formal IPO process through a so-called self-placement, which sees a company sell shares directly, saving the money required to line up underwriters as middlemen. ($1 = 0.9173 euros) (Reporting by Giuseppe Fonte; Editing by Sharon Singleton)
