Approved the amendments to the Market Rules

Amendments to the Market Rules starting from March 1st, 2006:
admission to trading under an exemption from the obligation to publish a prospectus, for financial instruments already listed on other regulated markets; admission of Investment Companies; rules on suspension and revocation for Issuers 

On 21 December 2005 the shareholders’ meeting of Borsa Italiana approved some amendments to the Market Rules.
The amendments were approved by Consob in Resolution no. 15319 of 8 February 2006.

Starting from March 1st, 2006 these amendments will enter into force:

 Admission to trading under an exemption from the obligation to publish a prospectus

The amended version of Consob Regulation 11971/1999 incorporates the Community legislation on prospectuses by introducing the possibility of admitting financial instruments already listed on other regulated markets to trading in the absence of an application by the issuer.
Consequently, provision has been made in the Market Rules for the admission of financial instruments to trading without the publication of a listing prospectus; to be admitted to trading on the MOT market by means of this procedure: bonds, Eurobonds and other debt securities, structured bonds and asset-backed securities.
Analogous rules for shares of foreign issuers will enter into force with a subsequent Notice.

 Admission of Investment Companies

Rules have been added governing the admission of a particular type of company limited by shares whose exclusive corporate purpose is to invest in majority and minority holdings in listed and unlisted companies (“investment companies”). More specifically:

• the bylaws of investment companies must contain specific criteria for the diversification of their investments and a high quorum requirement for bylaw amendments in order to protect the investment diversification rules;
• Italian companies intending to apply for admission to trading as investment companies must also be entered in one of the registers referred to in Articles 106, 107 and 113 of the Consolidated Law on Banking;
• ad hoc rules have been introduced for admission to trading, together with simplified due diligence;
• admission may be revoked: if the overshoot of one of the bylaw limits on the concentration of risk lasts for more than 12 months; in the case of changes to the bylaw criteria for the diversification of investments; and if an investment company does not invest at least 25% of its total assets within 24 months;
• shares of investment companies are to be traded in class 3 of the MTF segment.

 Transposition of the Prospectus Directive

Following the transposition of the Community legislation on prospectuses into Consob Regulation 11971/1999, the Market Rules have been amended by eliminating the time limit for the publication of the prospectus of “at least five days before” the beginning of the acceptance period, since it is no longer envisaged by the applicable legislation.
In order to allow Borsa Italiana to obtain the information necessary for the correct operation of the market in good time, the calendar for extraordinary corporate actions must be disclosed to the public 2 trading days before the start of the transaction and the prospectus must be sent to Borsa Italiana in order to increase the accessibility and availability of such information.

 Issuers: rules on suspension and revocation

Additions have been made to the rules on the suspension and revocation of listing with reference to the conditions for the readmission of financial instruments that have been suspended or for which the revocation procedure has been initiated.
Borsa Italiana may now require issuers to provide it with information when the conditions for suspension or revocation cease to exist as a consequence of material changes in issuers’ profits and losses, assets and liabilities or financial position such that the situation of the company is radically different from that of the original company.

 Transposition of the Market Abuse Directive

Following the transposition of the Market Abuse Directive Borsa Italiana has amended the following aspects of the Market Rules:

1. Buy-back programmes
Additions have been made to the Market Rules to regulate the purchase of own shares using derivatives. As for purchases made on the cash market, those made by means of derivatives may not be carried out using the internal or interbank functions, which permit the counterparty to be selected, and a specific disclosure regime has been added to the Instructions.

2. Internal dealing
The directive includes legislative provisions making it mandatory to notify transactions involving a company’s financial instruments carried out by relevant persons within the company.
In its implementing regulations Consob has provided for continuity with the discipline laid down in the Market Rules and has largely taken over their approach and content (in particular, as regards the manner of transmitting notifications and disclosing them to the public).
Accordingly, the provisions of the Market Rules and the Instructions that concern the code of conduct referred to in Articles 2.6.4 and 2.6.5 of the Rules will be repealed as of 1 April 2006 following the entry into force of the new Consob regulations.

The following amendments have also been approved:

• Procedure for cross orders on the MTA, SEDEX and MOT markets;
• Information and conditions for adjustments of covered warrants, certificates and structured bonds;
• Abolition of the obligatory presence of a specialist in the EuroMOT segment.
  

The other changes introduced by the shareholders’ meeting and already approved by Consob in Resolution no. 15319/2006 concerning the introduction of tailor-made combination orders on the IDEM market and the revision of the procedure for the admission of intermediaries to trading and the parallel revision of the contract governing their relationship with the markets will enter into force at a later date and be included in a new revision of the Market Rules and the Instructions.

Milan, February 24, 2006