ETFs - requirements and listing process

Article 2.2.35 of the Rules of the markets organised and managed by Borsa Italiana S.p.A. (following the “Rules”) defines the requirements for the admission to listing for Exchange Traded Funds. the listing application form and the relevant annexes to be provided to Borsa can be found in the Instructions.

ETFs Requirements

• In the ETFplus market it is possible to list harmonized CIUs that are compliant with the European directive UCITS, and have received Consob and Bank of Italy authorization or, in the case of foreign CIUs within the European Union, an equivalent authorization from the home authority and have completed the procedure for marketing in Italy as referred to in Article 42 of the Consolidated Law on Finance.

• Units/shares of CIUs for which the admission is requested must be freely negotiable and can be settled by Euronext Securities Services Milan.

• The reference index or basket of securities of an indexed ETF must be calculated in a transparent manner and updated daily. The value of the index must be made available to the public at least once a day. For structured ETFs it is otherwise requested that the index to which the performance of the fund is linked and the formula linking the performance of the index and the fund are marked by transparent methods of calculation. The fund’s reference index must be made available to the public at least daily once a day.

• For ETFs, it is also required that the relevant prospectus provides for the listing in a regulated market.
  

Liquidity support

Specialist

For the listing of ETFs there must be at least one market maker that undertakes to support the liquidity of the ETFs for which application for listing has been made. In detail, as set out in article 4.4.2, the market maker must display continuous bid and ask prices with a minimum quantity and a maximum spread established by Borsa Italiana in accordance with article IA.7.4.1 of the Instructions. The specialist is also obliged to restore quotes in the event of a total or partial hit on the book. Borsa Italiana monitors the performance of these obligations on a continuous basis. The specialist function must be performed by an intermediary that is an ETFplus market member able to post an executable quote type of order (simultaneous bid and ask prices). In case the specialist function is covered by an intermediary not yet specialist on the ETFplus market some simple tests must be executed in order to verify this functionality. Specialists will benefit from a total exemption from the trading fee.