The Role of the Italian Securities Regulator Ten Years after the Consolidated Act on Financial Intermediation (A dieci anni dal Testo Unico della Finanza: il ruolo delle Autorita' di Vigilanza)

Abstract

This essay first shows how the 1998 Consolidated Act on Financial Intermediation (TUIF) and subsequent reforms strengthened the role of Consob (the Italian S.E.C.). It argues that the TUIF greatly enhanced Consob's powers and role in the Italian securities market. Later reforms went in the same direction by granting Consob the authority to impose heavy fines, which Consob has been doing since 2005. It argues next that, because with great power comes great responsibility, now is the time for a reform of Consob's corporate governance itself, which is almost the same as when it was created 34 years ago. Turning to current policymaking initiatives, after providing an efficiency-oriented explanation of why Italian companies should be free to opt out of the passivity rule in case of takeovers, it defends the main policy choices underlying Consob's draft regulation on related party transactions. Finally, it contains a few cautionary thoughts on post-financial crisis re-regulation, arguing inter alia that re-regulation cannot just mean more rules, but also, in some areas, less rules and, in all areas, better, cost-benefit-justified rules.

Note: Downloadable document is in Italian.

Keywords: Corporate Governance Reform, Draghi Law, Consob, Securities Regulator, Related Party Transactions, Takeover Law, Re-regulation

JEL Classification: G34, G38, K22