Spain in short selling move 01 February 2013Madrid Reporter: Mark Dugdale
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Spain’s financial markets regulator has lifted its ban on short selling as markets rally.
Spanish regulator the CNMV extended an existing ban on short selling for an additional week in October 2012 and submitted a proposal to the European Securities and Markets Authority (ESMA) to impose a further three-month ban, effective from 1 November.
The additional seven-day ban was an extension of the CNMV’s previous three-month suspension, which it introduced on 23 July 2012 to stabilise the volatility of the Spanish market.
Spain’s short selling bans were in part due to the ongoing structuring process of the Spanish financial sector to cover capital needs.
The process, which was outlined in the 23 July MoU between the European Commission, the Kingdom of Spain and the Bank of Spain, was still underway at the time that the extension was requested, and uncertainties surrounded Spanish financial stability.
Spain has now lifted the short selling ban as the IBEX 35 Index rallies and the country’s banks take steps to repair their balance sheets amid deep austerity measures.
Restrictions that expired on 31 January would not be extended, according to reports.
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