HCMC rejects ESMA’s rejection
12 January 2016 Athens
Image: Shutterstock
Greece’s Hellenic Capital Market Commission (HCMC) has disregarded the European Securities and Markets Authority’s (ESMA) disapproval of its renewal of the short selling ban.
The Greek and European regulators disagreed on the need to continue the prohibition of shorting shares of Attica Bank.
The ban, which has been ongoing since June 2015, ran out at midnight on 11 January but was reinstated until 25 January.
It includes all sales of Attica Bank shares covered by subsequent intra-day purchases.
It also applied to all depository receipts and warrants representing the bank’s shares admitted to trading on the Athens Exchange.
Market makers will continue to be exempt from the ban.
HCMC, in its explanation for extending the ban, said that Attica Bank, as the last Greek bank to be re-capitialised, should also be protected from short selling in the same way as other banks were.
The delivery of beneficiaries’ new shares isn’t finished and the date of admission to trading of the new shares has also not been confirmed.
Therefore, in the interest of consistency and equal treatment, the ban was renewed, according to HCMC.
ESMA had previously endorsed all eight renewals of the ban since it was first proposed last year, citing “adverse developments that had constituted a serious threat to market confidence in the Greek market”.
These conditions, according to ESMA, have now “considerably decreased with the successful completion of the share capital increase of Attica bank as announced by that bank on the 30th December 2015”.
In a statement on its decision, ESMA stated: “ESMA notes that the trading of the newly issued shares further to the completed capital increase has not started yet and thus there is a risk of increased volatility in the relevant market and that the confidence in the concerned bank could be affected if price movements were extreme.”
The Greek and European regulators disagreed on the need to continue the prohibition of shorting shares of Attica Bank.
The ban, which has been ongoing since June 2015, ran out at midnight on 11 January but was reinstated until 25 January.
It includes all sales of Attica Bank shares covered by subsequent intra-day purchases.
It also applied to all depository receipts and warrants representing the bank’s shares admitted to trading on the Athens Exchange.
Market makers will continue to be exempt from the ban.
HCMC, in its explanation for extending the ban, said that Attica Bank, as the last Greek bank to be re-capitialised, should also be protected from short selling in the same way as other banks were.
The delivery of beneficiaries’ new shares isn’t finished and the date of admission to trading of the new shares has also not been confirmed.
Therefore, in the interest of consistency and equal treatment, the ban was renewed, according to HCMC.
ESMA had previously endorsed all eight renewals of the ban since it was first proposed last year, citing “adverse developments that had constituted a serious threat to market confidence in the Greek market”.
These conditions, according to ESMA, have now “considerably decreased with the successful completion of the share capital increase of Attica bank as announced by that bank on the 30th December 2015”.
In a statement on its decision, ESMA stated: “ESMA notes that the trading of the newly issued shares further to the completed capital increase has not started yet and thus there is a risk of increased volatility in the relevant market and that the confidence in the concerned bank could be affected if price movements were extreme.”
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