LONDON, Feb 23 (Reuters) - Italy’s stock exchange rules for smaller companies will be relaxed within months in a bid to persuade swathes of family-owned firms to list and help boost a struggling economy.
Giuseppe Vegas, head of Italy’s market regulator Consob, said family firms will need capital to grow but find it difficult to obtain funding from banks who are required to build up their capital buffers over coming years.
“We are changing our regulation in a way permitting opting out of many market disclosures,” Vegas told reporters during a visit to the London Stock Exchange, owner of the Milan Bourse.
“The more important companies don’t do this opting out while the less important companies do it,” Vegas said.
Consob will launch a public consultation shortly on easing disclosure requirements on smaller listed companies, such as raising from 2 percent to 5 percent the threshold for notifying changes in shareholdings.
The rule changes would be effective after Easter.
About 2,000 mid-sized family firms could potentially list.
“I would be happy if 100 listed,” Vegas said.
He was in London to study the LSE’s AIM segment for start ups and see how it could be replicated in some way in Italy, such as through a new segment on the Borsa.
“The question is why London if functioning but Milan is not,” said Vegas who wants companies to tap the high level of personal savings in Italy, equivalent to about 11 percent of gross domestic product.
Consob will also make sure that Italy’s market rules are no tougher than elsewhere in the European Union as regulators create a “single rulebook” across the 27-nation bloc.
Vegas said there was also the more fundamental challenge of shifting the country’s “salotto buono” or “drawing room” culture of cozy business ties to a more open, market-orientated outlook.
Tough times like the present, difficulty of getting bank loans and reluctance of heirs to take over will put pressure on family firms to turn to the stock market, he said.
“We can use this moment to try something new,” Vegas said.
He also announced that Consob would not extend its ban on short-selling of financial stocks on the Milan stock exchange after it expires on Friday.
“It’s difficult to say if it worked or didn’t work,” Vegas said. (Reporting by Huw Jones; Editing by Elaine Hardcastle)