Transposition of the AIFMD in Italy
Studio Legale Crocenzi e Associati
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Italian Regulatory Update Issue 2013 04
To: Primary contacts
Date: December 10, 2013
Re: Transposition of the AIFMD in Italy
On December 2, 2013, the Italian Council of Ministers approved a series of amendments to the Consolidated Text of Finance Regulation (Legislative Decree no 58 of February 24, 1998, as amended, hereinafter, “TUF”) aiming at implementing in the Republic at a statutory level the Alternative Investment Funds Managers Directive (“AIFMD”). These amendments to the TUF will likely enter into force in Q1 2014 after the review of the Parliament required by the law, and shall be followed by second level regulations of the Minister of Economy and Finance (“MEF”), the Bank of Italy and CONSOB.
Until then, the interim rules issued by CONSOB in order to allow EU alternative investment funds managers (respectively, AIFs and AIFMs) to manage Italian AIFs and the marketing of AIFs covered by the AIFMD to Italian professional investors under the passporting procedures provided for by the AIFMD shall be applicable. These interim rules of CONSOB have been examined in our Italian Regulatory Update no 2013 02 of July 29, 2013.
2 The new rules of the TUF on the activities of foreign AIFMs in Italy
The analysis will focus on the activities of non Italian AIFMs in the Republic.
The EU AIFMs can manage Italian AIFs, either on a cross border basis or through a branch by prior notification from the home Member State (“MS”) regulator to the Bank of Italy, provided that (i) the relevant EU AIFM is authorized in its home MS to manage AIFs similar to those that it intends to manage in Italy and that (ii) the relevant EU AIFM has agreements in place with the depository of the AIF in order to allow to the latter access to the information which are necessary in order to perform its duties as depository, in compliance with the Italian law (e.g., to verify that the transactions carried out in managing the fund comply with its investment policies). The agreements per point (ii) must comply with the requirements that will be determined by the Bank of Italy.
Non-EU AIFMs can manage Italian AIFs by prior authorization of the Bank of Italy. The authorization procedure will be governed by regulations to be issues by the Bank of Italy, provided that the above requirements applicable to EU AIFMs described at points (i) and (ii) of the preceding paragraph must be complied with.
3 Template for the Listing Documents of ETFs listed on Borsa Italiana
ETFs listed on the Italian Exchange must draft a sales document for the underlying investors called Listing Document (in Italian, “Documento di Quotazione”), drafted according to a template issued by CONSOB and attached to Reg 11971. It should be noted that the template Listing Document of CONSOB only refers to “passively managed” (i.e., index tracking) ETFs.
Before Res 18671 such template provided (in accordance with a requirement of Reg 11971) that the underlying (possibly retail) investors who purchased the units/shares of the fund on the secondary market were entitled to apply directly to the ETF in order to ask the redemption of their units out of the ETFs assets (instead of selling their units/shares on the secondary market).
During the consultation for the revision of Reg 11971 that lead to Res 18671, the author of this Regulatory Report, through the comments that can be inspected at:
informed CONSOB that the template Listing Document for ETFs should have been amended in order to reflect the ESMA Guidelines (Section IX, paragraphs 21 to 24) where said ESMA Guidelines provide that in general the underlying investors in ETFs shouldn’t be entitled to seek redemption directly from the ETF, except in case of “significant” difference between the stock exchange value of the unit/share and its Net Asset Value or “NAV”.
Therefore, the new template Listing Document of CONSOB provides for the insertion of a wording saying that the investors who purchased shares/units on a secondary market can ask the redemption directly from the fund only when the market value of the units/shares “significantly varies” from the NAV and thus that the direct redemption from the fund is an exception, not the general rule.
Finally, it should be mentioned that Res 18671 didn’t introduce a template Listing Document for actively managed ETFs, although there is a specific market segment for these products in Borsa Italiana (which, however, is still without listed funds as of the date of this memo). Therefore, it is expected that CONSOB will issue a template Listing Document for actively managed ETFs in the near future.
We remain at disposal for any clarification.
Francesco P Crocenzi
 IMPORTANT INFORMATION This memorandum is not given in performance of a professional engagement during an attorney-client relationship and is only given for a general information to the reader regarding the matters discussed herein. Therefore, this document should not be relied upon as a legal opinion and no action should be taken on the basis of the information herein contained. © 2013 Francesco Paolo Crocenzi
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