On Oct. 8, 2025, the Italian Council of Ministers granted preliminary approval to a legislative decree implementing the delegation provided for in Article 19 of the so-called “Capital Markets Law.”[1] The new decree extensively reforms the legal framework governing capital markets, as set out in the Consolidated Law on Finance (“TUF”), and amends relevant provisions of the Civil Code concerning joint-stock companies.
Currently, the legislative decree (the “Decree”) is undergoing parliamentary review prior to its final adoption by the government. The Decree was drafted following internal technical discussions with a specially appointed government commission. No public consultation was held during the drafting process, although parliamentary hearings are scheduled.
The reform is presented as a means to foster economic growth by promoting savings and facilitating businesses’ access to equity capital. It seeks to enhance market competitiveness, simplify the regulatory framework, and rationalize the overall organization of financial markets. However, some investors may view certain changes with caution, particularly regarding the protection of minority shareholders.
Among the key areas of intervention, the Decree revises takeover rules outlined in Part IV, Title II of the TUF, as well as provisions in Part IV, Title III concerning ‘issuers’ and Section VI-bis of the Civil Code regarding joint-stock companies.
Notably, the Decree revises takeover provisions, updates corporate governance and remuneration obligations, and reforms rules on shareholder meetings. The Decree also establishes a new framework for transitioning from regulated markets to multilateral trading facilities, alongside a voluntary regime for newly listed companies and Small and medium-sized enterprises (SMEs) with market capitalizations below EUR 1 billion. Furthermore, the reform undertakes a comprehensive review of the three existing governance models under Italian law.
The following sections provide a detailed overview of the main changes introduced in these areas.
Takeover Rules
The Decree unifies the threshold for mandatory takeover bids at 30 percent of share capital or voting rights. Under the current version of Article 106 of the TUF, small and medium-sized enterprises (SMEs) may set a different threshold—ranging between 25 percent and 40 percent—in their bylaws. Additionally, for non-SME companies, the threshold is currently reduced to 25 percent if no other shareholder holds a larger stake. While this harmonization aligns Italy with several other European jurisdictions, some commentators have expressed concern that the reform could facilitate the consolidation of corporate control without sufficient safeguards for minority shareholders.
Moreover, the reference period for calculating the minimum takeover price is halved from 12 to 6 months, potentially lowering the offer price. Furthermore, the Decree increases the annual incremental threshold that triggers a mandatory public takeover bid under Article 106(3) of the TUF. The limit is raised from 5 percent of voting rights or voting share capital to 10 percent of voting rights. The threshold applies in the event of acquisition of additional shares or the obtaining of additional voting rights by investors who already hold more than 30 percent of the share capital or voting rights, but not yet a majority of voting rights in the ordinary shareholders’ meeting.
In parallel, the Decree lowers the threshold under Article 107(1) for exemption from a mandatory global tender offer following a prior partial bid. A shareholder will now be exempt if the stake potentially triggering the obligation is acquired through a tender or exchange offer covering at least 50 percent of each class of voting financial instruments, down from the current 60 percent. The threshold for enforcing a squeeze-out is also reduced, from 95 percent to 90 percent.
Lastly, inspired by the UK’s “scheme of arrangement”, the Decree introduces a mechanism allowing an extraordinary shareholder meeting to authorize the acquisition of the company’s entire share capital by a buyer identified by the board of directors. The resolution must be passed with the favorable vote of the majority of shareholders present at the meeting, excluding: i) the proposing shareholder and any concert parties who are already shareholders; and i) any shareholder or concert party holding a relative majority stake exceeding 10 percent of the share capital.
Other changes include, among others, amendments to the rules on shareholders acting in concert and provisions inspired by “put up or shut up” requirements.
Corporate Governance Report
The Decree requires companies to disclose, within their annual corporate governance report, where adopted, a description of the policy regarding: i) the use and monitoring of new technologies—particularly Artificial Intelligence (AI) systems—within administrative, organizational, and accounting frameworks; ii) the management and monitoring of Information Technology-related risks, including cybersecurity threats and risks arising from the integration of new technologies into administrative, organizational, and accounting structures.
Remuneration Policies and Report
Where permitted by the company’s bylaws, the Decree provides that companies may elect a non-binding shareholder vote on the remuneration policy, and the remuneration of managers with strategic responsibilities—excluding board members—may be excluded from the policy’s scope. Furthermore, ex post information regarding such managers should always be provided in aggregate form, rather than individually. Additionally, the requirement to disclose remuneration received from associated entities has been eliminated.
Shareholder Meeting Format and Shareholder Rights
The Decree introduces new rules for shareholder meetings.
Even in the absence of specific provisions in the company’s bylaws, the administrative body may resolve, with the favorable vote of the majority of independent directors or with the approval of the supervisory board, that the shareholder meeting be held exclusively through telecommunication means, or that participation in the meeting and the exercise of voting rights occur solely through the company-designated representative (so-called “closed-door meeting”)[2]. Voting may also be conducted by mail or electronically.
To convene virtual-only or closed-door meetings pursuant to these new rules, the administrative body must adopt a regulation—approved with the same governance requirements—defining the conditions and procedures for shareholder participation. This regulation must be published on the issuer’s website and referenced in the meeting notice.
Partially mitigating potential investor concerns regarding such meeting formats, the Decree provides that shareholders holding, either individually or jointly, at least 5 percent of the share capital with voting rights on the agenda items—or a lower threshold specified in the bylaws—may request, within five days of the meeting notice, that the meeting be held in a physical venue, without exclusive reliance on the designated representative or telecommunication means.
With the stated aim of curbing interventions deemed merely disruptive, the bylaws or, alternatively, the aforementioned regulation may also establish a minimum individual shareholding threshold—not exceeding 0.1 percent of the share capital—for participating in discussions during the meeting. This does not affect the right to submit questions. Considering the maximum 0.1 percent limit, some observers argue that this measure may partially preclude active participation by small and/or retail investors.
With the exception of the last paragraph, these provisions also apply to companies whose shares are admitted to trading on multilateral trading systems.
Additional changes include, among others, a significant reduction in the timeframe for shareholders (holding at least 2.5 percent of the share capital) to request additions to the meeting agenda. The deadline is shortened from 10 days (or 5 days for certain meetings) to 3 days (or 2 days for specific cases), with a corresponding acceleration of the company’s obligation to update the agenda. Furthermore, the right to submit shareholder proposals directly at the meeting has been abolished, with the stated goal of ensuring full pre-meeting transparency, inter alia.
Downlisting from Regulated Market to MTF
To purportedly support market mobility and potentially reduce delistings, the Decree introduces a regulatory framework governing the transition from regulated markets to less demanding multilateral trading facilities (MTFs), such as Euronext Growth Milan.
A downlisting is permitted provided the following conditions are met: (i) the regulated market operator verifies that the MTF ensures an equivalent level of investor protection with respect to public takeover and exchange offers according to criteria set by Consob regulations; (ii) the company’s extraordinary shareholder meeting approves the transfer at least two months prior to its execution, with the majorities required by Consob regulation; (iii) the company discloses information relating to the rationale and implications of the transaction for investors at least two months before the scheduled transfer date, in accordance with the procedures established by Consob through regulation.
New Framework for Newly Listed Companies and SMEs Opting-in
The Decree establishes a new, more flexible regulatory framework for newly listed companies. SMEs that have not exceeded a market capitalization of EUR 1 billion in any of the three financial years preceding the Decree’s entry into force may also opt into this regime, within two years. To do so, they must amend their bylaws accordingly and not exceed the capitalization threshold at the time of opting in. The relevant resolution must be approved with the favorable vote of the majority of shareholders present at the meeting, excluding the shareholder(s) holding individually or jointly a relative majority stake exceeding 10 percent (i.e. “whitewash mechanism”).
Companies that have opted into the new regime and subsequently resolve to downlist may retain the statutory options adopted—except for the exclusion of withdrawal rights—provided the bylaws remain compatible with the destination market and the shares have been traded on a regulated market for at least three consecutive years.
Election of Corporate Bodies
The Decree introduces greater flexibility in the appointment of directors for newly listed companies and SMEs under the new regime. Specifically, it allows companies to deviate from the traditional slate voting mechanism, enabling alternative methods such as cumulative voting on individual candidates. To submit nominations, shareholders must hold at least 1 percent of the share capital with voting rights, although the bylaws may set a different threshold, up to a maximum of 5 percent[3].
Under the new regime, minority shareholder seat allocation rules no longer apply to the renewal of the board of directors unless the company has issued multiple voting shares or provides for enhanced voting rights, or if the company is controlled by a public shareholder. In any case, if the bylaws do not stipulate that the board is composed predominantly of independent directors, they must ensure that at least one candidate nominated by shareholders who does not exercise control—either individually or jointly—and who is not a related party to the controlling shareholders, is elected.
The individual voting method may also apply to the supervisory body, with the chair of the board of statutory auditors (or a member of the supervisory board) reserved for minority representation.
Bylaws Amendments
The bylaws may reduce quorum requirements for amendments to the bylaws, requiring a simple majority instead of two-thirds, unless the newly listed company or SME adopts multiple voting shares or enhanced voting rights.
In addition, the bylaws may exclude mandatory withdrawal rights under Article 2437(1) of the Civil Code, except in instances of significant changes to the corporate purpose where such amendments materially alter the business risk[4].
Lastly, the bylaws may partially or fully exclude the application of procedures governing related party transactions, as referenced to in Article 2391-bis(3), letter b, of the Civil Code, except where at least one of the quantitative thresholds established by Consob exceed 10 percent.
Governance Model
The Decree also undertakes a comprehensive review of existing governance models, introducing more autonomous regulatory frameworks for the three alternatives recognized under Italian law: the traditional, one-tier, and two-tier systems. The “traditional” model is no longer recognized as the default system.
The stated objective is to grant companies greater discretion in selecting their preferred governance structure, while simultaneously enhancing the transparency and recognizability of these models for foreign investors. Some of the proposed changes may result in a reallocation of powers from shareholders to boards.
[1] Law No. 21 of March 5, 2024
[2] In Italy, following the approval of the Capital Markets Law, a company’s articles of association may now provide that shareholder participation in general meetings and the exercise of voting rights can also be exclusively carried out through a company-designated representative. Furthermore, Italy’s Law Decree No. 202/2024 extended the measures regarding shareholder meeting formats previously implemented under emergency legislation adopted in response to the COVID-19 pandemic. Consequently, Italian listed companies may hold closed-door meetings without amending their bylaws until Dec. 31, 2025. In this context, the European Commission has initiated an infringement procedure by sending a formal notice to Italy (INFR(2025)4004) for failing to correctly transpose the Shareholder Rights Directive (Directive 2007/36/EC). The Commission contends that “Italian law undermines shareholders’ freedom to choose their proxy for general meetings without limitations, imposing instead a company-designated proxy. In doing so, it violates the shareholders’ right under the Directive to table resolutions for any agenda item, including newly added ones, hence denying those company-designated proxy holders the same rights to which the shareholders they represent would be entitled”. Should Italy fail to provide a satisfactory response, the Commission may issue a reasoned opinion.
[3] Under the current framework, the threshold ranges between 0.5 percent and 4.5 percent of the share capital, unless the bylaws provide for a lower limit.
[4] The first paragraph of Article 2437 regards: a) Amendment of the corporate purpose clause, when it allows for a significant change in the company’s activity; b) Transformation of the company; c) Transfer of the registered office abroad; d) Revocation of the liquidation status; e) Elimination of one or more causes for withdrawal provided in the following paragraph of the article or in the bylaws; f) Modification of the criteria for determining the share value in the event of withdrawal; g) Amendments to the bylaws concerning voting or participation rights.
By:
Gianluca Antipasqua, Mariangela Iannaccone
