Italy: the POC non standard and what Consob said about it

An Italian listed company can issue a convertible bond whose conversion price is struck against the market at each conversion, and can run a standby equity facility drawn in tranches; Consob has a name for the convertible: the POC non standard. Italian law imposes no percentage floor under that price. What binds instead is Article 2441 of the Civil Code and, since July 2025, Consob's disclosure package.

Key takeaways

• The regulator has already written about this. Consob's richiamo di attenzione n. 14/25 of 7 July 2025 records that issuers reaching for these loans were generally in serious balance-sheet difficulty at the outset, that most had not recovered years later, and that several ended in insolvency proceedings.
• Italy has two ways to switch off the diritto di opzione, and they are not interchangeable. Article 2441 permits a standing 10% exclusion at market value on an auditor's report, and a separate, larger exclusion only quando l'interesse della società lo esige.
• Conversion settles on a semester rhythm by default. Article 2420-bis has the directors issue shares in the first month of each half-year to bondholders who requested conversion in the previous one.

Start with what Consob published, not with the mechanics

On 4 July 2025 Consob issued Comunicazione n. 13/25, raising the disclosure standard for these arrangements. Three days later came richiamo di attenzione n. 14/25, the document an Italian board will be shown across the table.

The findings are the regulator's own, and they are unflattering. Companies using these loans typically presented serious patrimonial and balance-sheet imbalances before signing; several years later most had not improved, and some had deteriorated into insolvency proceedings. The single investor rarely settles into a stable shareholding, and sells the converted shares back into the market to recover the loan, depreciating the price and diluting the register. Consob also invoked Article 149 of the Consolidated Law on Finance, putting the control body on notice to verify that the decision process was transparent and adequately informed.

None of that makes the instrument unlawful. It does mean an Italian issuer should be able to say why its own facts are different, and that question belongs before the term sheet.

Article 2441: the two exclusions of the option right

Everything runs through the diritto di opzione, the shareholders' right to be offered new shares and convertible bonds first. It cannot be waived by contract, only excluded under Article 2441, and the route chosen fixes both size and paperwork.

A facility of any real size lives in the right-hand column. That is where the fifth paragraph bites: quando l'interesse della società lo esige, the option right may be excluded or limited by the capital-increase resolution. The sixth paragraph then requires the directors to illustrate the proposal in a report setting out the reasons for the exclusion and the criteria used to determine the issue price, with the collegio sindacale giving its opinion on the congruity of that price within 15 days. The same paragraph then directs the resolution to determine the issue price on the basis of net asset value, taking account, for shares listed on a regulated market, of the trend of quotations over the last six months. That is a reference and a sign-off, not a floor.

Where the bond itself comes from

The instrument is a prestito obbligazionario convertibile, resolved under Article 2420-bis by the extraordinary general meeting, which must simultaneously resolve the capital increase serving the conversion and cannot act unless the existing capital is fully paid up. Article 2420-ter is how the articles delegate that power to the directors, which is what makes a multi-tranche drawdown workable without a meeting each time.

One mechanic catches foreign investors out. Under Article 2420-bis conversion settles half-yearly by default: in the first month of each semester the directors issue shares to bondholders who asked to convert during the previous one. Reconcile a drawdown schedule with that in the term sheet, not at the first conversion notice. See also convertible notes for listed issuers and equity facilities.

Resale, and why the growth market carries the volume

Italy has the shortest resale path in this region. Shares delivered on conversion are fungible with the listed line, settle through Euronext Securities Milan and are tradable on delivery, with no holding period and no resale registration. Issuers with a US register should read Rule 144 and restricted securities separately.

On Euronext Milan, admitting shares fungible with those already admitted is exempt from a prospectus up to 30% of the number already admitted over 12 months, raised from 20% by Regulation (EU) 2024/2809 with effect from 4 December 2024. On Euronext Growth Milan, a multilateral trading facility, no admission prospectus arises at all. That asymmetry, not the pricing rule, is why the growth market carries most of these deals.

What an Italian board needs in front of it

Which exclusion route the articles support; the congruity file behind the issue price; and a disclosure plan answering Comunicazione n. 13/25 at signing, at each drawdown and each conversion request. Send the ticker, the segment and the current articles and we will come back on which route is open.

• All markets
• France
• Belgium
• Spain
• Greece

Primary sources

• Consob — Richiamo di attenzione n. 14/25 of 7 July 2025
• Directive (EU) 2017/1132 — Articles 47 and 72

Orientation

Commentary, press and unofficial texts: useful for orientation, never the citation of record.

• Civil Code, Article 2441 — diritto di opzione
• Civil Code, Article 2420-bis — obbligazioni convertibili in azioni

Convertible financing in Italy: frequently asked questions

What is a POC non standard?

Consob's own label for a prestito obbligazionario convertibile subscribed by a single investor, drawn down in tranches rather than in one issue, with the conversion price set against the market shortly before each conversion request instead of fixed at signing. Warrants are frequently attached.

Does Italian law set a minimum conversion price?

There is no percentage floor of the kind Spain applies. The hard limit is that shares may not be issued below nominal value or accountable par, which Article 47 of Directive (EU) 2017/1132 imposes across the Union. Where the option right is excluded because the interest of the company requires it, the discipline on price is the congruity opinion under Article 2441, not a formula.

When do conversion shares become tradable in Italy?

Shares delivered on conversion are fungible with the listed line and settle through Euronext Securities Milan, and Italian law imposes no holding period on them. Timing is driven by the allotment mechanics in Article 2420-bis of the Civil Code and by the terms of the loan, not by a resale registration.

Did Consob prohibit these structures in July 2025?

No. It raised the disclosure and governance bar and published what it had observed, which is a different thing. Its findings were that issuers using these loans were generally already in serious balance-sheet difficulty, that most had not recovered years later and some had entered insolvency proceedings, and that the single investor is rarely a stable shareholder.