New EU rules on short selling unveiled
29 June 2012
New EU rules on short selling unveiled
The EU Commission has today set out the detailed rules aimed at reducing the risk of settlement failures linked to naked short selling, as well as the means by which market participants should disclose significant short positions to the market.
The technical standards adopted today by the Commission are based on the work of the European Securities and Markets Authority (ESMA). They notably specify the details of the so-called "locate rule," which ensures that short sales do not result in a failure to deliver.
The new rules also detail how ESMA is to determine the shares which are exempt from the Short Selling Regulation by virtue of their principal trading venue being outside the Union.
Together with the Short Selling Regulation that they implement, the regulations adopted today will create a more transparent, orderly and stable market by reducing the risks tied to short selling.
Internal Market and Services Commissioner Michel Barnier said: "The new rules give public authorities and market participants legal certainty on the detailed requirements which short sellers must comply with to adequately ensure the settlement of shares or sovereign debt when this is due. The technical requirements on how to disclose significant short positions are also set out, so that market participants can prepare to apply the Short Selling Regulation as of 1 November 2012."
Disclaimer for Business News
The Business News is provided for information purposes only and comes from Business World. It is provided solely as a convenience to you and not as an endorsement or approval by us of the content thereof. KBC Bank Ireland can not guarantee the accurateness and completeness thereof. KBC Bank Ireland does not accept any liability or responsibility for the content of and/or any opinions expressed therein (including but not limited to liability arising out of any allegation that the content of or the information contained therein infringes any law or the rights of any person or entity).
