Wed, Mar 18, 2020

ESMA and FCA Short Selling Announcements

The European Securities and Markets Authority (ESMA) has issued a decision temporarily requiring the holders of net short positions in shares traded on a EU-regulated market to notify the relevant national competent authority if the position reaches or exceeds 0.1% of the issued share capital after 16 March 2020 for a period of three months. This is a reduction from the current 0.2% notification threshold to competent authorities. 

ESMA considers that lowering the reporting threshold is a precautionary action which is justified as a result of the COVID-19 pandemic for authorities to monitor developments in markets.

ESMA also believes the measure addresses the threat to the orderly functioning and integrity of financial markets and the stability of the whole or part of the financial system in the Union.

The additional transparency obligations apply neither to market making activities nor a net short position in relation to the carrying out of a stabilisation. Firms should assess their short positions to ensure appropriate regulatory reporting. A link to the full decision is available here.

The Financial Conduct Authority today has also temporarily prohibited short selling under the Short Selling Regulation 236/2012 in certain listed Belgian, French and Italian equities following the announcement of prohibition orders by the relevant regulators; the Financial Services and Markets Authority, Autorité des Marchés Financiers and CONSOB. A list of the relevant rel="noopener noreferrer" securities is provided here.

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