Company law

The twenty-seventh entry is il diritto di opzione, and an English reader who recognises the second word will read the whole phrase wrongly. In English finance « an option » is an instrument in its own right: a contract that is bought or sold and that gives its holder the right to buy or sell something later at a price fixed now. None of that is meant here. Il diritto di opzione is the right every existing member has, when fresh capital is issued, to subscribe a part of it before anybody from outside is let in, in proportion to what they already hold. It is there so that a holding cannot be watered down without its owner having had the chance to keep it whole, and it can be set aside only by a resolution that says so. British practice calls it « the pre-emption right » or « the subscription right », and the issue built on it « a rights issue ». So l’esclusione del diritto di opzione is the disapplication of pre-emption rights, and rendering it with the word « option » turns a protection for shareholders into a derivative.