October 24, 2019 / 1:51 PM / a month ago

Italy gives initial OK to powers to protect 5G, stock exchange

ROME (Reuters) - Italy’s parliament on Thursday gave its initial approval to a decree granting the government powers to protect 5G telecoms networks and Milan’s Borsa Italiana stock exchange from foreign takeovers.

FILE PHOTO: The Milan stock exchange building is seen in downtown Milan March 18, 2013. REUTERS/Alessandro Garofalo

Non-European Union players will be required to notify Rome of any takeover intentions or plans to acquire controlling stakes in key financial infrastructures.

Regarding fifth-generation (5G) telecoms, the measures aim to give the government protective powers over 5G supply deals between domestic firms and non-EU providers such as China’s Huawei and ZTE Corporation (000063.SZ).

The U.S. government has raised concerns that Huawei equipment could be used by Beijing for spying - an accusation which Huawei denies.

The Milan bourse is regarded as strategic by Italian authorities as it controls domestic government bond trading platform MTS.

The exchange is owned by the London Stock Exchange Group (LSE.L), which last month rebuffed a takeover approach from Hong Kong Exchanges and Clearing (0388.HK).

The LSE instead is moving ahead with a $27 billion plan to buy Refinitiv, in which Thomson Reuters, parent of Reuters News, holds a 45% stake.

Italy’s coalition of the anti-establishment 5-Star Movement and centre-left Democratic Party (PD) approved the emergency legislation last month.

The measures were originally drafted in 2012 to give Rome protective powers over infrastructure such as the Borsa Italiana.

The decree entered into force immediately and needs to be approved by Italy’s two houses of parliament by Nov. 21 or will expire.

Reporting by Giuseppe Fonte, editing by Giselda Vagnoni, Jason Neely and David Evans

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