On 18 March 2021, Consob published a special "question and answer" (the "Q&A") in order to clarify:
- how listed companies may establish information flows concerning information that may assume a "privileged"(1) nature with the shareholders and, in particular, with the controlling shareholder;
- under what circumstances the information relating to business plan shall be made public.
The topic on information flows towards shareholders or the controlling shareholder (see point sub (i)) has particular relevance for its implications on the prevention of market abuse and governance structures. Specifically, the management of information flows between listed companies and shareholders covers two different regulatory areas. On one side, the rules on so-called "selective information" are relevant where the information has a "privileged" nature; on the other side, information flows are relevant in relation to the corporate governance of a company and to the relation between directors and shareholders and are subject to ad hoc provisions.
Therefore, Consob deemed it necessary to provide the market, through the Q&A, with some applicative guidance on the conditions that may justify the establishment of information flows.
The Q&A outline the conditions under which selective information can be considered legitimate towards shareholder and/or the controlling shareholder, always in compliance with the confidentiality constraints of the recipients of the information. Information flows functional to the preparation of the accounting reports are also taken into consideration as well as further hypotheses whereas an explanatory report of the selective information can be detected.
Finally, the Q&A provide clarifications about the publication of the business plans, recalling that, although they are not subject to specific disclosure requirements, they remain subject to the obligations of management and disclosure to the public of the privileged information contained therein.
(1) Pursuant to the rules on market abuse and, in particular, Article 7 of Regulation (EU) 596/2014, "inside information" means "information of a precise nature, which has not been made public, relating, directly or indirectly, to one or more issuers or to one or more financial instruments, and which, if it were made public, would be likely to have a significant effect on the prices of those financial instruments or on the price of related derivative financial instruments". In the context of Article 7 of the abovementioned (EU) Regulation, there are specific definitions of "inside information" in relation to: (i) commodity derivatives; (ii) emission allowances; and (iii) orders in financial instruments.