ITALY: Market Practice Inherent to Market Liquidity Enhancement Activity

Wednesday April 22 2020

The Italian Regulator Consob published the Resolution no. 21318 of 7 April 2020 in the Official Journal of the Italian Republic relating to market liquidity enhancement.

The new accepted market practice no. 1 will enter into force thirty days after publication. At the same time, accepted market practice no. 1 previously admitted with Consob Resolution no. 16839 of March 19, 2009 will cease.

Market Practice no. 1 Highlights:

• Rationale for which the practice could constitute market manipulation
• Level of transparency provided to the market
• Degree of safeguards to the operation of market forces and the proper interplay of the forces of supply and demand
• Impact on market liquidity and efficiency
• The trading mechanism of the relevant market and the possibility for market participants to react properly and in a timely manner to the new market situation created by that practice
• Risks for the integrity of, directly or indirectly, related markets, whether regulated or not, in the relevant financial instruments within the Union
• Outcome of any investigation of the relevant market practice by any competent authority or other authority, in particular whether the relevant market practice infringed rules or regulations designed to prevent market abuse or codes of conduct, irrespective of whether it concerns, directly or indirectly, the relevant market or related markets within the Union
• Structural characteristics of the relevant market, inter alia, whether it is regulated or not, the types of financial instruments traded and the type of market participants, including the extent of retail investors’ participation in the relevant market

Click on the link for further information.