On 4 April 2022, the European Securities and Markets Authority (ESMA) published its final report on the review of certain aspects of the Short Selling Regulation (SSR).

The final report:

  • Contains empirical analysis of the impacts of the short selling bans imposed during the COVID-19 pandemic and proposes legislative amendments to provisions that govern emergency measures (for example, long and short term bans and the ESMA’s emergency measures). The purpose of the amendments is to clarify the interpretation of certain provisions and ensure that the procedure for issuing bans is sufficiently flexible for Member State competent authorities to tackle emergency situations.
  • Reviews the existing framework for the calculation of net short positions, the so-called ‘locate rule’ and the list of exempted shares. The ESMA proposes enhancements to the current rules against uncovered short sales by introducing record keeping requirements and proposing the harmonisation of sanctions.
  • Reviews the framework for transparency and the publication of net short positions. In light of recent market turmoil events the ESMA proposes the introduction of a centralised system for publication and disclosure to the public of net short positions.

The report has been submitted to the European Commission. It will provide technical support in relation to a potential review report of the SSR.