Products of stock market in italy

Products of Stock Market in Italy

A Presentation by Akash Paul Lakra

766 BBA(Hons.)LLB(Hons.)

National Law University, Jodhpur

Understanding The Italian Stock

Exchange

Knowing the Different Indices in The Stock Market

Understanding Present Situation in the Italian Stock

Market

Overview of the Presentation

The Borsa Italiana S.p.A based in Milan, is Italy's main stock exchange

The Borsa Italiana S.p.A is responsible for the organisation and management of the Italian stock exchange. The Company, founded in 1997 following the privatisation of the exchange, has been operational since January 2nd, 1998

Borsa Italiana is now part of London Stock Exchange Group, following the merger effective October 1, 2007. Borsa Italiana organises and manages the Italian stock market with the participation of domestic and international brokers who operate in Italy or from abroad through remote membership, using a fully electronic trading system for the real-time execution of trades.

Oversee transaction activities Define the rules and procedures for admission and listing on the market for issuing companies

Define the rules and procedures for admission for intermediaries

Supervise listed companies' disclosure.

Main responsibilities of Borsa Italiana

Borsa Italiana's primary objective Is to ensure the development of its markets, maximising their liquidity, transparency and

competitiveness while pursuing high levels of efficiency.

Different Indices

All Share

FTSE MIB

Mid Cap

STAR Small Cap

Micro Cap

Sectorial industry

and super-sector

The FTSE All-Share Index, originally known as the FTSE Actuaries All Share Index, is a capitalisation-weighted index, comprising around 1000 of more than 2,000 companies traded on the London Stock Exchange.

To qualify, companies must have a full listing on the London Stock Exchange with a Sterling or Euro denominated price on SETS or SETSmm or a firm quotation on SEAQ or SEATS, and must meet a number of other eligibility requirements.

FTSE All-Share is the aggregation of the FTSE 100 Index, FTSE 250 Index and FTSE SmallCap Index.

FTSE All-Share Index

The FTSE MIB (Milano Italia Borsa) (the S&P/MIB prior to June 2009) is the benchmark stock market index for the Borsa Italiana, the Italian national stock exchange, which superseded the MIB-30 in September 2004.

The index consists of the 40 most-traded stock classes on the exchange.

The index was administered by Standard & Poor's from its inception until June 2009, when this responsibility was passed to FTSE Group, which is 100% owned by the Borsa Italiana's parent company London Stock Exchange Group.

The FTSE MIB

A company with a market capitalization between $2 and $10 billion, which is calculated by multiplying the number of a company's shares outstanding by its stock price. Mid cap is an abbreviation for the term "middle capitalization".

As the name implies, a mid cap company is in the middle of the pack between large cap and small cap companies.

Mid Cap

STAR is the market segment of Borsa Italiana’s equity market (MTA) dedicated to midsize companies with a capitalization of less than 1 billion euros, which voluntarily adhere to and comply with the above strict requirements.

STAR

High transparency and high disclosure requirements

High liquidity (free float of minimum

35% )

Corporate Governance in line with international

standards

Refers to stocks with a relatively small market capitalization. The definition of small cap can vary among brokerages, but generally it is a company with a market capitalization of between $300 million and $2 billion.

Small Cap

Micro-cap companies have greater market capitalization than Nano caps, and less than small, mid, large and mega-cap corporations.

Companies with larger market capitalization do not automatically have stock prices that are higher than those companies with smaller market capitalizations.

Generally, the larger the market capitalization, the less risky the investment and smaller the potential returns.

The smaller the market capitalization, the riskier the investment and the greater the potential returns.

Micro Cap

Italy Stock Market (FTSE MIB), declined 0 points or 0.00 per cent during the last 30 days. From 1997 until 2013, Italy Stock Market (FTSE MIB) averaged 29140 Index points reaching an all time high of 50109 Index points in March of 2000 and a record low of 12363 Index points in July of 2012.

The FTSE MIB (Milano Italia Borsa) Index is a major stock market index which tracks the performance of 40 leading and most liquid and companies listed on the Borsa Italiana.

It is a free floating, capitalization-weighted index. The base value of the FTSE MIB Index was set at the level of the MIB 30 Index at the close of trading on October 31, 2003 at 10644 points.

Current Status

Current Status

Statistics taken from Trading Economics, http://www.tradingeconomics.com/italy/stock-market

Italy has become the first country to introduce a tax on high-frequency trading in a move that has become a test case for potential further crackdowns on the controversial practice. The country will introduce levies against high-speed trading and equity derivatives in the final part of a two-stage process established this year to tax equity-related transactions. The Italian version explicitly focuses on high-frequency trading and derivatives, which are often used by corporations and banks to hedge against risk. The tax will also apply regardless of where the transaction is executed, or the country of residence of the counterparty. For high-frequency traders, order changes and cancellations will be taxed at 0.02 per cent when they occur within a timeframe shorter than half a second, once above a threshold. There will be fixed charges for equity derivatives, depending on the type of contract, and deals executed off-exchange will subject to a higher tax band. Intermediaries such as market makers are exempt from the tax.

Tax on high-speed trade and equity derivatives

For high-frequency traders, order changes and cancellations will be taxed at 0.02 per cent when they occur within a timeframe shorter than half a second, once above a threshold.

There will be fixed charges for equity derivatives, depending on the type of contract, and deals executed off-exchange will subject to a higher tax band. Intermediaries such as market makers are exempt from the tax.

Tax on high-speed trade and equity derivatives

Grazie