The listing of Alternative Investment Funds (AIFs) on the Italian Stock Exchange, Borsa Italiana, is expected to gain in importance in the funds market.

Background

Having launched the market segment dedicated to open-ended UCITS funds over a year ago (see our previous article here), the Italian Stock Exchange is now also looking after AIFs, as part of ongoing efforts to improve its funds framework.

The listing of AIFs may be of particular interest to those professional investors, for example pension funds and social security institutions, who may seek to overcome investment limits applying with respect to non-listed financial instruments.

Borsa Italiana’s market segment dedicated to AIFs is the MIV (Market for Investment Vehicles). Following the implementation of the AIFMD in Italy, market rules and relevant instructions of the MIV have been amended to allow AIFs to list on the MIV, thereby simplifying the previous listing regime for closed-ended funds.

The MIV segment is designed to accommodate a variety of types of AIF and is open to both professional and retail investors; AIFs reserved to professional investors are listed on the professional segment of the MIV.

Listing requirements

Admission to listing of an AIF on the MIV is subject to the following requirements:

  • its shares/units must be freely negotiable and suitable for settlement through settlement services;
  • its management regulation/by-laws must contain a provision allowing the listing on a regulated market;
  • financial statements (including for a period of less than a year), accompanied by a report of an independent auditor, must be prepared;
  • the amount of assets raised through its offer must not be less than Euro 25 million;
  • its shares/units must be distributed to an extent deemed adequate by Borsa Italiana to meet the need for the regular operations of the market;
  • a specialist must be appointed (for retail offers only).

Listing an AIF on the MIV has several advantages. First, it represents an alternative channel to raise money from investors and strengthen the marketing of the fund. Further, it brings a certain degree of liquidity and listing on an EU regulated market (such as the MIV) provides an opportunity to overcome the limits which apply to certain professional investors (for example pension funds and social security institutions) with respect to the investment in non-listed financial instruments.