The European Securities and Markets Authority (ESMA) has published its decision of 16 March 2020 (Decision), which requires natural or legal persons who have net short positions in relation to a share admitted to trading on a regulated market to notify to a competent authority details of any such position if the position reaches or exceeds 0.1% of the issued share capital. The requirement will last for three months from the date of its entry into force, which is today.
The Decision was taken in accordance with Article 28 of Regulation EU 236/2012, which allows for ESMA to take such measures where there is a threat to the orderly functioning and integrity of financial markets or to the stability of the whole or part of the financial system in the Union; and there are cross-border implications.
The Decision follows from short selling bans initiated by a number of competent authorities last week, also made under EU 236/2012. The Decision looks to provide a community-wide position, which in turn reduces arbitrage opportunities and looks to protect the integrity of the market as a whole.
For the full text of the Decision, please click here.