On 24 September 2021, the European Securities and Markets Authority (ESMA) issued a consultation paper on the review of the Short Selling Regulation (SSR).

In the consultation paper ESMA conducts a systematic review of the provisions of the SSR. Among other things ESMA sets out suggestions for operational improvements and policy clarifications on:

  • The calculation of net short positions, the prohibition of uncovered short selling and the locate rule under which short selling trades can take place.
  • The mechanism for transparency of net short positions and the proposal to publish aggregated net short positions per issuer based on all individual positions and the scope of the exemptions for shares that are more heavily traded in a third country.
  • The introduction of a centralised notification and publication system to reduce reporting burdens, increase cost efficiency and foster ESMA’s monitoring capacity and coordination powers in case of potential threats at EU level.

The deadline for comments on the consultation paper is 19 November 2021. ESMA expects to publish a final report by the end of Q1 2022.