AIM ITALIA SERVICE DESCRIPTION VERSION 1-3 OCTOBER 2008
Contents 1 Service description. 3 1.1 Introduction... 3 1.2 Diversifying the range of Italian growth markets... 3 1.3 Scope and readership... 3 1.4 Key features of AIM Italia... 3 1.5 Trading day... 4 1.6 Reference price determination... 4 1.7 Specialists... 4 1.8 Order types... 5 1.9 Data publication... 5 1.10 Clearing and settlement... 5 2 Technical overview... 6 2.1 Introduction... 6 2.2 AIM Italia market configuration...6 2.3 AIM Italia market data... 6 2.4 Customer testing requirements... 6 3 Trading on AIM Italia...7 3.1 Process... 7 3.2 Contact details... 7 3.3 Timescale...7 2
1 Service description 1.1 Introduction AIM Italia is a new Exchange-regulated multilateral trading facility from Borsa Italiana which builds on the global success of AIM. The market is designed primarily for Italian small cap companies but it is also expected to attract companies from the wider European region. It provides an attractive route to capital in Europe for dynamic SMEs and will strengthen the secondary market for smaller companies in Italy. The market structure is based on the existing AIM model, underpinned by a regulatory framework designed to suit the needs of smaller, growing companies. The rules have been tailored to the Italian regulatory landscape but keep the main features that have been central to the success of AIM, for example the key role played by Nominated Advisers (Nomads) in assisting issuers with meeting their obligations as laid out in the AIM Italia Rules. 1.2 Diversifying the range of Italian growth markets The introduction of AIM Italia diversifies the range of markets available to small cap issuers and investors offered by Borsa Italiana. This ensures that companies are able to join a market that best fulfils their capital raising needs and provides investors with access to the widest range of companies at an early stage of their development. Mercato Expandi and the Mercato Alternativo del Capitale (MAC) will continue to operate alongside AIM Italia in their present formats. While Mercato Expandi will migrate onto TradElect as part of the first phase of migration, MAC is due to migrate as part of the second phase. Further communication on this will follow. 1.3 Scope and readership This document contains an overview of AIM Italia and of the commercial details for a firm wishing to trade on the market. It also provides member firms with information on how to connect to, test and implement changes in their own environments prior to the launch of the service. Further technical information is available from the Borsa Italiana website www.borsaitaliana.it. 1.4 Key features of AIM Italia AIM Italia will be available to all current or eligible member firms of Borsa Italiana s MTA market. Central to the market is the presence and role of the Nomads. Nomads are advisory firms, approved to act as such by Borsa Italiana. They are responsible for ensuring that issuers are suitable for admission to the market, have correctly prepared the necessary admission documentation and understand their ongoing obligations. Following admission, an AIM Italia issuer must retain a Nomad at all times, and the Nomad must advise the company on its ongoing compliance with the AIM Italia rules. AIM Italia will be split into two trading segments. The main segment will follow the same trading hours as the blue chip segment of the MTA market. The second will be an order 3
display segment which will only contain securities from issuers in exceptional circumstances who do not have a Nomad. Borsa Italiana will decide the applicable trading times and mechanisms. Specialists will be present for all securities on AIM Italia to ensure that a minimum level of liquidity is maintained. The market will be open to retail and professional investors. 1.5 Trading day For the main segment the AIM Italia trading day will be the same as the current blue chip segment trading day: 08.00 09.00 (9.00.00 9.00.59) Opening auction, pre-auction phase; 09.01 09.03 Opening auction, validation phase; 09.03 09.05 Opening auction, opening phase; 09.05 17.25 Continuous trading; 17.25 17.30 (17.30.00 17.30.59) Closing auction, pre-auction phase; 17.31 17.35 Closing auction, validation and closing phase. There will be no After Hours session on AIM Italia. 1.6 Reference price determination Reference prices for AIM Italia securities will be determined according to the same rules as in the MTA, summarized as follows: Uncrossing price of the closing auction; If there is no uncrossing price in the closing auction, then the reference price will be equal to the weighted average of the prices of the trades of the last ten minutes of the continuous trading phase; If there is no uncrossing price in the closing auction nor any trade in the above period, then the reference price will be equal to that of the latest trade during the entire trading session; If there is no trade during the entire trading session, then the reference price will be equal to the reference price of the previous day. 1.7 Specialists An AIM Italia company is required to retain a Specialist at all times, which must be a participant of the market and which has specific duties under the AIM Italia Rules for Companies. 4
Similar to the MTA market, Specialists will commit, for each of the securities they are registered for, to operate on their own account maintaining firm two way prices on the book starting from 15 minutes before the end of the pre-auction phase of the opening auction. Specialists acting in this capacity will have to use a specific order type, the executable quote, which comprises a pair of firm, non anonymous two way orders for their own account. Borsa Italiana defines obligations for Specialists regarding maximum spreads and minimum quantities for each executable quote. In each trading session, Specialists will have to quote throughout the trading day until they reach a minimum daily volume of trading. For further information please refer to Article 16 of the AIM Italia Trading Manual available at http://www.borsaitaliana.it/documenti/regolamenti/aimitalia/tradinmanual.en_pdf.htm 1.8 Order types The order types that can be displayed on the AIM Italia order book are the same as on the MTA market. Orders on AIM Italia will be posted anonymously, with the exception of Specialist orders (see above). Post trading information on the executed trades will include the counterparty identity. A full description of these order types is included in the Service Manual for the MTA and Expandi markets with the TradElect platform available at http://www.borsaitaliana.it/prodottieservizi/negoziazione/intermediari/manualemtatradelect.en _pdf.htm 1.9 Data publication Complete market data for the AIM Italia order book will be publicly available in real time through Infolect and MDF/DDM Plus. This data will be covered by existing data charges. 1.10 Clearing and settlement Contracts executed on AIM Italia will not be guaranteed by a central counterparty. As for the MTA market, contracts executed on AIM Italia will be routed and pre-settled through Monte Titoli s X-TRM and settled via Monte Titoli s Express II system. 5
2 Technical overview 2.1 Introduction This section provides an overview of the technical changes being made to the Trading and Information systems to support the AIM Italia market including the market configuration, customer testing and implementation approach. 2.2 AIM Italia market configuration AIM Italia will be traded on TradElect in two new segments: AIM Italia 1 (MA1) and AIM Italia 2 (MA2). The AIM Italia configuration for segments and sectors will follow shortly and will also be detailed in the market configuration matrix, available at www.bitsystems.it 2.3 AIM Italia market data Market data relating to AIM Italia will be disseminated both through MDF/DDM Plus and through Infolect via the existing Borsa Italiana service channels, D01 to D06: Infolect SC Description D01 Italian Equity Level 1 D02 Italian Equity Level 1 Plus D03 Italian Equity Level 2 D04 D05 D06 Italian Equity Reference Data Market Status Indicators Market Reference Data 2.4 Customer testing requirements The AIM Italia market structure will be available from 27 October 2008 on the Customer Development Service (CDS) environment. This environment allows customers to test forthcoming changes on the Exchange in a live-like environment. There will be no additional pricing charges for this activity. Testing is mandatory for any member firms that need to make functional changes to their software to accommodate this new market structure. 6
3 Trading on AIM Italia 3.1 Process MTA and Expandi member firms will be automatically admitted to trade on AIM Italia unless they choose to opt-out. A further communication on this subject will follow. Eligible members for MTA and member firms of all other markets managed by the London Stock Exchange Group may be eligible for membership of AIM Italia upon request. 3.2 Contact details Borsa Italiana recognises the importance of supporting its customers throughout the implementation of the changes detailed in this document. For more information on the technical set up, enablement and testing please contact your Technical Account Manager in Milan or London, or the BIt Systems desk on 00 800 26772000. For a commercial and/ or business question please contact your Primary Account Manager in Milan or London. 3.3 Timescale The market configuration will be live for member firms to be able to test in CDS from 27 th October. The AIM Italia launch date will be announced with a Borsa Italiana Avviso. 7
Copyright October 2008 Borsa Italiana S.p.A. Borsa Italiana SpA Piazza degli Affari, 6 20123 Milano Tel.: +39 02 72426.1 www.borsaitaliana.it 2