Italy Establishes New Rules for Internet Communications in Italy

Washington, DC, August 6, 1999 - On July 7, 1999, Italy’s CONSOB set out its position regarding internet communications that are viewable in Italy but not directed at Italian investors. Also, on July 15, 1999, a new decree was published which revises certain aspects of Italy’s legislation with respect to mutual funds.

Communication No. DI/99052838, issued by CONSOB on July 7, 1999, provides that an internet site may be deemed to make an offer to Italian investors where its contents and the connected circumstances lead one to presume that the activities or promotion and placement have as their objective persons residing in Italy. The communication sets forth a non-exclusive list of factors that may indicate that the site is aimed at Italian residents. For instance, the use of Italian, prices quoted in lire, registration with Italian search engines, or referrals to Italian broker-dealers may all indicate the website is intended for Italian residents.

Ministerial Decree No. 228 of May 24, 1999 revises Italian mutual fund regulation to permit Italian management companies to solicit investments in non-harmonized open-end funds and to create hedge funds and reserved funds. Under the decree, a hedge fund may have no more than 100 investors and may not be the subject of a solicitation for investment. In addition, each investor must invest a minimum of one million Euro. Reserved funds may be organized as open-end funds or closed-end funds but can only be sold to types of investors described in fund bylaws that also meet qualifications set out in the eecree. Under the decree, qualified investors are limited to certain specified institutional investors and natural persons having specific capabilities and experience in operations involving financial instruments. The Bank of Italy will issue regulations with respect to specific items of the Decree.