ROME, Feb 26 (Reuters) - Italy plans to adopt a less punitive approach to the way it sanctions irregularities by financial companies, sources said, as part of steps to address issues holding back the
Italy Eases Penalties for Financial Firms' Irregularities
By Giuseppe Fonte
ROME, Feb 26 (Reuters) - Italy said on Thursday it would adopt a less punitive approach to irregularities by financial companies, in an attempt to improve the way its capital markets work and boost the appeal of the Milan bourse.
Italy's New Approach to Financial Regulation
The government approved a decree giving firms the possibility to reduce sanctions by agreeing commitments with the authorities. The new rules also envisage no penalties at all in the case of minor infringements, a cabinet statement showed.
Italy's market capitalisation stood at 48% of gross domestic product (GDP) in 2025, according to data from market watchdog Consob, among the lowest in advanced economies.
Over the last 16 years, the difference between new listings and delistings resulted in a market value loss of 96 billion euros ($113.32 billion).
Penalty Reductions and Conditions
As part of the package approved on Thursday but not yet made public, Italy gives companies the option of cutting penalties by one third if they commit to compensate investors who suffered damage, the statement said.
As a general principle, penalties will only apply when infringements are considered "significant" and worth more than 10,000 euros, a draft seen by Reuters showed.
Junior Treasury Minister Federico Freni, who helped draft the package, said the government was trying to encourage markets to consider Italy's supervisory authorities not as adversaries but as allies.
Government's Rationale and Future Plans
"Supervision is cooperation to ensure proper functioning, not mere repression of illegal activities," he told Reuters.
Freni, who comes from the right-wing League party like Economy Minister Giancarlo Giorgetti, is among candidates to replace Paolo Savona as Consob chairman.
The government is also considering softening current legislation that holds leading officials from Consob and Italy's central bank liable for damages in cases of serious misconduct.
However, officials said changes to this measure were not expected to feature in Thursday's decree.
Other changes being considered by the government regard rules on so-called "enhanced voting rights," which Italy boosted in 2024 to encourage businesses to go public.
The government now sees a need to prevent leading shareholders from forcing the hand of minority investors, especially in takeover bids aimed at de-listing companies.
($1 = 0.8472 euros)
(Editing by Gavin Jones)
