THE ROLE AND TASKS OF
THE DIFFERENT
AGENCIES INVOLVED IN
REGULATION AND
SUPERVISION OF SOEs.
THE ITALIAN EXPERIENCE
Presentation by Roberto Ulissi,
Director General, Ministry of
Economy and Finance, Head of
Directorate “Bank and Financial
System. Legal Affairs”
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The SOEs in Italy
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Large privatization program in Italy,
started in 1993
Present situation: still many SOEs
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26 directly owned; some are 100% controlled
large groups: many indirect shareholdings
diversified sectors
listed and non-listed
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ENTITIES INVOLVED IN
REGULATION AND
SUPERVISION OF SOEs
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Ministry of Economy and Finance
Other Ministries
National Commission for Corporations and
Stock Exchange (CONSOB, the Securities
and Financial Market Regulator)
Other Independent Authorities
Stock Exchange Operator
Court of Auditors
Parliament
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Ministry of Economy and
Finance
Two separate roles:
 Owner
 Shareholder
Two levels of responsibility:
 Minister: guidelines and political decisions
 Officers: proposals, implementation of
political decisions, administrative and
contractual activity
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…The Ministry of Economy as
owner
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MEF is only the formal owner; it is not free to
sell shares
Some limited exceptions to MEF ownership exist
Decision to sell and how (political decision):
In general: Prime Minister on a proposal by the
Minister of Economy and the Minister of Productive
Activities
Only for minor shareholdings: the Minister of Economy
alone
Exception for national broadcasting company (RAI):
CIPE resolution (Interministerial Committee for
Economic Planning); comprehensive resolution
Implementation of sale: the Ministry of
Economy alone (officer level)
Permanent assistance of an Advisory and
Transparency Committee, appointed by
Government
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…The Ministry of Economy as
shareholder
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Exercise of rights (political level):
• in major companies: Minister of Economy with other Ministers
(competent for the specific sector) and according to guidelines
of Prime Minister
• in some cases, Minister of Economy alone;
• in some limited cases, competence of other Ministers alone

Content of rights: the same as common shareholders, with
limited exceptions:
• non application of ceilings on shareholding established in bylaws
• golden share
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No involvement in the management of the company
(company law prescription)
Only monitoring of management (particularly of non-listed
companies): monitoring of industrial objectives and to
prevent critical situations (officer level)
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The role of other Ministries

General role, not specific for SOEs:
• regulation of industrial sectors; licences;
• licence and control of public services management
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Specific role as to SOEs:
• participation in selling decisions
• participation in the exercise of shareholder’s rights; for
appointments of directors, actual involvement of whole
Government and coalition party leaders
• CIPE guidelines for specific tariffs (e.g. railways)
• guidelines to specific companies in sensitive sectors
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Securities and Financial Market
Regulator (CONSOB)
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Exclusive competence in supervision and
regulation of securities market and listed
companies
Limited exceptions for SOEs in the law:
• non application of provisions on investment solicitation,
if securities issued or guaranteed by the State. No
occurance as to SOEs’ shares and not permitted by EU
law. Only for public debt sec.
• facilitations in reporting indirect shareholding;
• market abuse exemption for public debt transactions
(permitted by EU directive)
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No exemption for SOEs granted by CONSOB
MEF must comply with all regulations and
obligations and it is subject to common
supervision and sanctions; also payment of fees
to CONSOB
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Other Independent Authorities
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Regulatory and supervisory authorities for
specific sectors; general competence for
all enterprises:
• electricity and gas; telecommunications
• banking and insurance (Bank of Italy and
ISVAP); some competences shared with
CONSOB
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Antitrust authority (national and EU):
compliance with competition rules (e.g. as
to sales, assignment of exclusive licences,
public procurement); State-aid control;
actions against monopolies or dominant
positions
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Stock Exchange Operator
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Listing and delisting
Regulation of transactions
Disclosure of prices
No specific rules for SOEs
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Court of Auditors
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Control of financial management of Statecontrolled companies for possible
damages to public finance; prosecution
against directors and managers.
Judge attending board meetings
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Parliament
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Opinion on sale of State’s controlling
shareholding in public utilities
Opinion on industrial plan in case of sale
of State’s controlling shareholding in
national airline (Alitalia)
Specific powers as to the national
broadcasting company (RAI):
• participation in appointment of directors;
permanent supervision
• qualified majorities needed: participation of
opposition parties
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Assessment of the allocation
of responsibilities
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Clear distinction
No overlapping between Ministry of Economy and
CONSOB
Some overlapping between Ministries:
overlapping of shareholder’s rights and regulatory
competences
De facto interference in some decisions by other
Ministers and coalition party leaders
Statutory political influence by Parliament in
specific companies
More rational distinction of responsabilities
between financial sector supervisors is possible
(CONSOB, Bank of Italy and ISVAP) and between
Bank of Italy and Antitrust authority
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ACCOUNTABILITY
Ministry of Economy
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Officers: accountable to Minister
Minister: accountable to Parliament
Minister and officers: to Court of Auditors;
personal liability for damages to public finance;
formal control, inadequate to market
transactions; it may affect decision making
General principles of administrative action: rule
of law, due process, transparency, justiciability,
possible liability for individual damages
Accountability to the market: decisions may
affect market value and further sales
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Consob
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To Parliament through MEF: annual report and information
on major events
To Parliament and Government:
• appointment of Commissioners
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To the Prime Minister and the Minister of Economy
• approval of internal regulations (formal control)
• removal of Commissioners, only in exceptional cases
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To the Minister of Economy
• annual report; regular reporting of major events and duty to
submit info requested
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To the Court of Auditors: control of accounts and personal
liability
General principles of administrative action
To the market: consultations (now mandatory)
To CESR (Council of European Securities Regulators)
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Other Authorities
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To Parliament
• appointment of governing bodies
• annual report
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To the Court of Auditors
Bank of Italy: accountability to be better defined
Stock Exchange Operator
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To CONSOB
To the market
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CONFLICTS
Internal conflicts within MEF
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Different roles and functions of Ministry of
Economy
• owner and shareholder; multiple shareholdings;
responsibility for State budget; responsibility for
general economic policy
• possible conflicts in decision to sell, dividend policy,
intercompany transactions, economic and tax policy
measures
• statement in prospectuses to protect shareholders’
value in his role as shareholder
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Conflicts between Minister and officers: formal
independence
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Conflicts between competent
entities
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Conflicts between Ministries
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On sale (timing and modalities) and
exercise of shareholder’s rights
On tariffs, within CIPE
Different approaches and different
interests protected
Resolution at Government level (Council of
Ministers)
Conflicts on board appointments: often
general political compromise
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Conflicts between Ministry of
Economy and CONSOB
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CONSOB is an independent authority; it
can not be forced to take a decision
No fiduciary relationship
The supervision of MEF over CONSOB does
not affect the institutional activity
Possible conflicts on sanctions, in the past
Judicial review available
Possible effect on re-appointment
In fact, CONSOB is cooperative; smooth
relationship
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Conflicts between MEF and
other independent authorities
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Possible conflicts in particular with the
Authority for electricity and gas (e.g. on
tariffs), the Authority for
telecommunication (concerning the
national broadcasting company, RAI) and
the Antitrust authority
Independence of the authorities
Judicial review available
No leverage as to re-appointment
More formal relationship
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Conflicts between Ministry of
Economy and Parliament
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Parliament opinion not binding; MEF may
override it, disclosing reasons
Conflict may involve political confidence
Conflicts on the national broadcasting
company (RAI):
• conflicts and uncertainty on political
orientations may affect the regular
management of company
• possible internal conflicts preventing the
formation of qualified parliamentary
majorities; delay
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PROSPECTIVE REFORM
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Bill on the protection of saving. Issues
being discussed, concerning financial
sector authorities:
Strengthnening of CONSOB (partly
achieved)
Clearer distinction of responsibilities (by
objectives)
Stronger independence
Stronger accountability to Parliament and
transparency; regular consultation of
market
Coordination
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