Greece imposes one-month short selling ban
23 March 2020 Athens
Image: Shutterstock
The Hellenic Capital Market Commission (HCMC) is the latest European market regulator to ban short selling and certain aspects of credit default swaps in response to recent market upheaval.
The temporary prohibition includes sales of shares on the Athens Stock Exchange that are covered by subsequent intraday purchases, as well as all related instruments relevant for the calculation of the net short position determined under the EU Short Selling Regulation.
The measure was imposed last week and will only cease on the 24 April.
The HCMA says that, given the severity of the coronavirus pandemic, it deemed this level of threat appropriate in order n to be in a position to monitor the developments in the Greek market.
The Greek market regulator has confirmed it is in regular communication with its European counterparts, as well as the European Securities and Markets Authority (ESMA), and did not rule out further actions to steady local markets during this period of uncertainty.
In Europe, Greece joins France, Spain, Italy and Austria in banning short selling for periods in recent weeks. Most opted for one-month bans, while Italy, which is the EU country worst affected by the pandemic, imposed a three month ban.
ESMA came out in favour of the several bans last week and said the lockdowns were necessary to avoid undue downward pressure on equities markets.
For many EU markets, the actions mark the most significant regulatory interventions since the 2008 financial crisis, when short selling was also paused.
Many countries curbed short-selling in the aftermath of the 2008 financial crisis, HCMC is now one of many financial regulators to enforce a short-selling ban amid the ever-expanding coronavirus pandemic.
The temporary prohibition includes sales of shares on the Athens Stock Exchange that are covered by subsequent intraday purchases, as well as all related instruments relevant for the calculation of the net short position determined under the EU Short Selling Regulation.
The measure was imposed last week and will only cease on the 24 April.
The HCMA says that, given the severity of the coronavirus pandemic, it deemed this level of threat appropriate in order n to be in a position to monitor the developments in the Greek market.
The Greek market regulator has confirmed it is in regular communication with its European counterparts, as well as the European Securities and Markets Authority (ESMA), and did not rule out further actions to steady local markets during this period of uncertainty.
In Europe, Greece joins France, Spain, Italy and Austria in banning short selling for periods in recent weeks. Most opted for one-month bans, while Italy, which is the EU country worst affected by the pandemic, imposed a three month ban.
ESMA came out in favour of the several bans last week and said the lockdowns were necessary to avoid undue downward pressure on equities markets.
For many EU markets, the actions mark the most significant regulatory interventions since the 2008 financial crisis, when short selling was also paused.
Many countries curbed short-selling in the aftermath of the 2008 financial crisis, HCMC is now one of many financial regulators to enforce a short-selling ban amid the ever-expanding coronavirus pandemic.
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