Thursday May 5 2016
News Source: Global Exchanges
Focus: Trading Systems and Technology
Type: General
Consob has decided to proceed with the adoption of the so-called rolling model with reference to the highly-dilutive rights issues launched by listed companies. These are operations where a high number of new shares are issued at a heavily discounted price.
This practice can cause extreme volatility of price, which in turn interferes with the regular price discovery process and generates distortion effects which could. This can be very misleading for less-experienced investors.
To prevent the market volatility, Consob has decided to adopt a technical solution called “rolling model”. It consists of making the new shares available in the market more times during the rights issue and not only once, as is currently the position.
The technical activities necessary to implement the rolling model should be concluded within a few months. Consob will publish a special Communication when the new model is due to come into effect.
Furthermore, Consob has requested Borsa Italiana make the necessary changes to its Regulation of Organised and Managed Markets and to the relative Instructions.
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