The European Securities and Markets Authority (ESMA) has issued technical advice to the European Commission on how to improve the Short-Selling Regulation. ESMA’s technical advice includes proposals around the following:

• Exemption for market making activities. ESMA proposes including the different types of on-venue market making activities described in MiFID II in the definition of ‘market-making activities’. It considers that market makers should be members or participants of only one of the trading venues where their market-making activity takes place, not of all of them. ESMA proposes not requiring any membership requirement for OTC market-making activity. It also suggests introducing reporting obligations for market makers;
• Short-term bans on short-selling. ESMA recommends that only the Member State competent authority of the most relevant market should have the capacity to adopt a short-term ban applicable across Europe. ESMA proposes transforming the current bans on short selling into a ban on entering into or increasing net short positions; and
• Transparency of net short positions. ESMA suggests practical improvements of the current regime including building a centralised notification and publication system across Europe. It also supports requiring the LEI for the identification of certain position holders.

View ESMA advises the Commission on specific elements of the Short-Selling Regulation, 21 December 2017