ESMA updates short selling Q&As
31 May 2018 Paris
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The European Securities and Markets Authority (ESMA) has updated its Q&A documents on the short selling regulation (SSR)
ESMA said the overall SSR Q&A revises a pre-existing answer regarding locate arrangements, further specifying the requirements for ‘easy-to-borrow and purchase’ lists.
The Q&A also aims to promote “common supervisory approaches and practices in the application of SSR”, as well as provide investors and other market participants with clarifications on the applicable requirements.
In its revised answer, ESMA said it deems that an “easy-to-borrow or purchase list” can be considered as an “easy to borrow or purchase confirmation” only where it is complemented for each share in the list with an assessment of: the maximum amount of shares affected by the possible short sale; the market conditions at the time of providing the list, including the liquidity of the shares concerned; and any other information available on the supply of the shares.
ESMA said the overall SSR Q&A revises a pre-existing answer regarding locate arrangements, further specifying the requirements for ‘easy-to-borrow and purchase’ lists.
The Q&A also aims to promote “common supervisory approaches and practices in the application of SSR”, as well as provide investors and other market participants with clarifications on the applicable requirements.
In its revised answer, ESMA said it deems that an “easy-to-borrow or purchase list” can be considered as an “easy to borrow or purchase confirmation” only where it is complemented for each share in the list with an assessment of: the maximum amount of shares affected by the possible short sale; the market conditions at the time of providing the list, including the liquidity of the shares concerned; and any other information available on the supply of the shares.
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