©Reuters. File photo: Milano Securities shares fall within hours of trading amid concerns that the Silicon Valley bank’s failure could trigger a broader financial crisis in Milan, Italy, March 13, 2023 A view showing the building of the exchange. REUTERS/Claudia. Greco/
Written by Giuseppe Fonte
ROME (Reuters) – Italy’s government on Tuesday overhauled the country’s capital markets, despite warnings from the financial industry that proposed legislation could backfire and stifle foreign investment. The plan cleared a major hurdle in Congress.
The House passed the bill 135-1, with 92 abstentions, but a final green light from the Senate is not expected until late February.
The Rome package is aimed at attracting new entrants to Borsa Italiana after the Milan Stock Exchange has lost a number of high-profile companies to other markets and acquisitions in recent years.
A bill that would allow listed companies to issue shares that would increase the voting rights of long-time investors by up to 10 times is under discussion as Italy seeks to block the move to the Netherlands, where corporate governance rules are It helps the company maintain strong control over the company.
“There is a real possibility that a historic brand that has made Italian history will return to Italy,” ruling party lawmaker Francesco Filini told Reuters, referring to luxury sports car maker Ferrari (NYSE:). .
However, the proposal has angered asset management companies, including major foreign funds, who support the “one share, one vote” rule that prevents the concentration of power in the hands of a minority.
Another provision would give investors greater say in how a company’s outgoing board presents its next list of candidates, potentially giving minority shareholders veto power.
The measure was supported by businessman Francesco Gaetano Caltagirone, an investor in Generali (BIT:), who has repeatedly expressed dissatisfaction with Mediobanca (OTC:)’s influence over insurance companies.
Generali CEO Philippe Donnet said last year that the bill could leave large publicly traded groups unmanageable.
If passed by the Senate as expected, the new rules would go into effect in 2025, meaning companies including Generali, whose board of directors is up for renewal next year, would have to amend their articles of incorporation to comply by then. be.
The government supported the parliamentary motion highlighting the risk of conflict and pledged to consider amendments to the Council-listed bill and other parts of the bill later this year.
Italian law also doubles to 16 billion euros the asset threshold under which the country’s cooperative lenders, whose shareholders each have one vote regardless of the size of their stake, must convert into regular joint stock companies. Removing obstacles to potential acquisitions.
The reform, which dates back to 2015 and was “one of the most popular reforms adopted under former Prime Minister Matteo Renzi, will now fall prey to economic recovery and anti-market fury.” ” said Luigi Malattin, an opposition lawmaker from the centrist Italia Viva party. Written by Renzi.
“Some banks will probably seek to merge while maintaining the ‘one head, one vote’ principle,” he added.
(1 dollar = 0.9310 euro)