REVIEW - Commissione Nazionale per le Società e le Borse (CONSOB)

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The term “CONSOB” means the Commissione Nazionale per le Società e le Borse. It is basically the control body of the Italian financial market. 

It is the Italian government authority that regulates the Italian securities markets. This also includes the regulation of their stock exchange, the Borsa Italiana.

It also covers the regulation of public offering transactions in Italy and the information required from listed companies in Italy.

CONSOB or the Italian Companies and Exchange Commission formed in the year 1974. It was through legislation merging the functions and jurisdictions that until then had been part of the Italian Ministry of Treasury. Primarily, power to monitor the securities markets was theirs.

Over time, CONSOBs powers and responsibilities have expanded, and in the year 1983 a new law extended its jurisdiction to protect public savings. Two years later, the regulator received juridical personality and autonomy. It gained the power to audit securities brokerage companies and monitor insider trading in 1991.

Organizational Structure

CONSOB is headed by a collegiate body consisting of a chairman and four members. They are appointed by a decree of the President of the Republic on the proposal of the President of the Council of Ministers. These council ministers remain in office for seven years and their term is non-renewable. 

The organizational structure includes a central management committee with eleven departments including issuers, intermediaries, markets, etc. It has thirty-nine divisions namely company controls, public tender offers and ownership structure, financial representatives monitoring and registering, insider trading, derivatives markets, etc. They have offices in Rome and Milan.

CONSOB’s chairman as of November 2019 was Paolo Savona. He is an Italian economist, professor and politician. He also became the Italian Minister of European Affairs from Jun 1, 2018 until Mar 8, 2019, his second stint in government after 1993–1994.

Additionally, he held several public offices in Italy and abroad. Savona left his post as Minister of European Affairs on Mar 8, 2019, in order to become President of the Italian Companies and Exchange Commission or CONSOB.

Savona’s predecessors in CONSOB include Mario Nava, Giuseppe Vegas, Lamberto Cardia, Luigi Spaventa, Enzo Berlanda, and Franco Piga.

How CONSOB Controls the Financial Market?

It verifies the transparency and correctness of the operators’ behavior. This is in order to safeguard the trust and competitiveness of the financial system, protect investors, and comply with financial rules.

CONSOB supervises to prevent and, where necessary, sanction any incorrect behavior. It exercises the powers attributed by law, so that the information necessary to make informed investment choices is made available to savers.

Moreover, the organization works to guarantee the maximum efficiency of the negotiations, ensuring the quality of the prices. It also ensures the efficiency and certainty of the methods of execution of the contracts concluded on the regulated markets.

Functions

Among its functions are regulating the investment services and operations of intermediaries. It also regulates the reporting obligations of companies listed on regulated markets, and the solicitation of investment from the public.

CONSOB authorizes the operations of regulated markets, the publication of prospectuses, the centralized management of financial instruments, and enrollment in registers.

The organization monitors the management companies’ operations, the transparency, and orderly conduct of trading. It also monitors the transparency and fairness of the conduct of intermediaries and financial representatives.

Moreover, it penalizes any unfair conduct by the above-mentioned parties. It checks the information provided to the market by entities that solicit investment from the public. It also checks the information contained in the accounting documents of listed companies.

Activities 

Its activity is aimed at the protection of the investing public, making it the competent authority for ensuring transparency and correct behaviour by market participants.

Disclosure of complete and accurate information to the investing public by listed companies is among its activities. 

CONSOB shows competence in ensuring accuracy of the facts represented in the prospectuses related to offerings of transferable securities to the investing public. It is also active in checking compliance with regulations by auditors entered in the Special Register

This Italian regulator conducts investigations with respect to potential infringements of insider dealing and market manipulation law.

CONSOB and COVID-19

A section of its website contains links and information to the most important resolutions and decisions it has taken. This is concerning savers, investors, business and financial operators, in relation to the outbreak of Covid-19 (Coronavirus).

CONSOB structures information so that it can be facilitated quickly and effectively by the public. This is through simplified paths and links to the Consob website.

Their organization received influence by the fast and continuous spreading of the pandemic. They act upon the resulting need to have clearly available new helpful information or data.

Reprinted from financialbrokerage, the copyright all reserved by the original author.