By Giuseppe Fonte and Valentina Za

ROME (Reuters) – Italy is looking at overhauling listing, voting and other rules to address the “chronic delays” holding back the country’s capital markets and boost Milan’s ability to compete with European peers, a Treasury document seen by Reuters showed.

With an overall capitalisation of 800 billion euros ($890 billion), the value of companies listed on Milan’s bourse lags far behind Paris, which boasts a market capitalistion of 3.7 trillion euros and even Amsterdam, with 1.4 trillion euros.

“Italy’s capital market is chronically behind those of other advanced economies, partly due to the weaknesses of the country’s ecosystem and partly due to regulatory hurdles,” the document said.

Italy is looking at enhancing voting rights, among other measures, to encourage owners to list their businesses in Milan without worrying about losing control to other shareholders, the Treasury suggested in the document.

As policymakers globally debate extending differentiated voting rights to promote investments, BlackRock, the world’s largest asset manager, has said it felt necessary to reiterate its support for the “one share, one vote” principle.

A regulatory set-up that helps leading shareholders preserve a tight grip on companies has driven a number of top Italian companies in recent years to opt for a Dutch legal domicile – while remaining listed in Milan.

Car makers Stellantis and Ferrari, drinks group Campari, and MFE, the broadcaster controlled by the family of former Prime Minister Silvio Berlusconi, have all moved their registered offices to the Netherlands where they now hold their shareholder meetings.

“The effectiveness of rules that enhance voting rights – loyalty share schemes and multiple voting shares – is being reconsidered to see whether it could make sense to boost them in order to make Italy a more attractive location for companies to set up base and list,” the document said.

In particular, the Treasury suggested that companies which are planning to list could be allowed to issue special shares that give existing investors a right to cast more than three votes for each share owned at shareholder meetings, surpassing the current limit of three.


Another step to boost initial public offerings (IPOs) in Milan, according to the paper, could be to simplify the listing process, which current rules make costly and cumbersome for companies to provide adequate risk disclosure for investors.

The result is that prospectus documents can often run into several hundred pages.

“Excessive information risks, at the end of the day, producing the same negative effects of a lack of information,” the document said, suggesting a limit of 300 pages.

A discussion paper by Italian market regulator Consob dubbed “The long and winding road” put the average number of pages in an equity prospectus approved by Consob at 406 versus 298 in Germany, the country with the second highest average.

The Treasury also suggested scrapping a provision designed to protect savers that holds staff of institutions such as the Bank of Italy and Consob liable for damages in case of serious misconduct, while in other countries those staff would only be liable in cases of wilful misconduct.

“The possibility is being considered to introduce a rule that would limit legal action for damages only to institutions but not their top executives and staff,” the document said.

Shielding employees could speed up the approval process which in Italy, according to Chiomenti law firm partner Enrico Giordano, is estimated to take from six to 10 weeks from the formal filing of the IPO prospectus, longer than elsewhere.

The document also mentioned the possibility of bypassing the formal IPO process through a so-called direct listing, which sees a company sell existing shares directly on the open market, saving the money required to line up underwriters as middlemen.

The London Stock Exchange, which in 2020 sold the Milan bourse to pan-European rival Euronext, offers direct listing to companies as does the New York Stock Exchange.

($1 = 0.8990 euros)

(The story fixes typographical error in first quote.)

(Reporting by Giuseppe Fonte in Rome and Valentina Za in Milan;Editing by Elaine Hardcastle)