Market Regulators

Background information

Independent market watchdogs are a relative recent invention in Italy. The stockmarket authority Consob, the equivalent of the US Security and Exchange Commission, was created in 1974 when the government gave up its powers over publicly listed companies.Consob approval to the prospectus is key for a company to go public, Consob can delist a company under certain circumstances, it can force a publicly traded company to make disclosures and it can also enforce certain special measures, such as banning the short selling on certain stocks for a limited, but often prolonged, period of time. In fact it banned the short selling on bank shares during the most acute pressure of the debt crisis began in mid 2011. Only in the Nineties of 1900, following a full opening of the country’s market and the enforcement of some compulsory European laws, Italy developed a set of independent agencies devoted to supervise competition in different fields. The most important is possibly the Agcm, better known as Antitrust authority, which has the last say over merger and acquisitions and can force companies to sell part of their business when the result of a combination is that of creating a “dominant position” within a specific market. All the mergers which followed the privatization and the liberalization in the banking and telecom industries during that decade had to pass the scrutiny of the Antitrust. Also the Agcom, which stands for Authority over the Communication industry, was created in the same years and had to deal with continuous controversies between the country’s incumbent, Telecom Italia, and its aggressive competitors, like Vodafone. The Agcom also had to handle the politically sensitive issue of the so called “conflict of interest” of four times PM Silvio Berlusconi, the television tycoon who as head of government cumulated to the ownership of his media empire the political power over state television RAI, the main competitor of Berlusconi’s television broadcaster Mediaset. It’s also worth mentioning Aeeg, the Authority which has the duty of setting the price of gas and power supply to the retail customers, even if it has to take account of market prices and conditions in doing its calculations. In Italy we also have the Garante per la Privacy, an independent body which is responsible for protecting the people private life from abuses. The privacy issue has been an issue as it was cause of limitation to marketing and commercial practices. By extension, the Italian Stock Exchange, which is part of the LSE, can be included in the market regulators list, even if it can inflict no sanctions or fines, as it sets the requisites for companies qualification to be listed. It can also temporary halt the trading on a specific stock when certain circumstances occur.

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