ESMA gives SSR technical advice
23 February 2018 Brussels
Image: Shutterstock
Verena Ross, executive director at the European Securities and Markets Authority (ESMA), addressed the Economic and Monetary Affairs Committee of the European Parliament to discuss elements of the short selling regulation that came into effect on 1 November 2012 and in respect of which the European Commission requested technical advice in January 2017.
Ross said that in preparing its technical advice, ESMA’s focus has been to achieve more transparency and to promote a more effective supervision of the SSR requirements while limiting—if not avoiding—the risk of circumvention.
ESMA’s technical advice focuses on three main topics related to the short selling regulation. These include the exemption for market-making activities and the definition of market-making activities; the procedure for imposing short-term restrictions on short-selling; and the method of notification and disclosure of net short positions.
ESMA conducted a survey amongst competent authorities and received 20 responses to the
public consultation it launched.
Given this limited feedback and the potential effect that the recent application of Second Markets in Financial Instruments Directive (MiFID II) might have on some of the recommendations included in the technical advice, Ross highlighted that ESMA could revise some elements of its advice at a later stage.
In particular, the technical advice could not benefit from a number of elements that became available as of the MiFID II/Markets in Financial Instruments Regulation (MiFIR) application date.
Those elements include the additional information to be provided by the new transaction reporting and record-keeping obligations under MiFIR; the number of firms that will become systematic internalisers; and the number of firms that will be engaged in a market-making agreement under MiFID II.
Ross also discusses the technical advice recommendations for the exemption of market-making activities, short-term restrictions on short selling and transparency of net short positions and reporting requirements.
Click here to read ESMA's full list of technical advice recommendations.
Ross said that in preparing its technical advice, ESMA’s focus has been to achieve more transparency and to promote a more effective supervision of the SSR requirements while limiting—if not avoiding—the risk of circumvention.
ESMA’s technical advice focuses on three main topics related to the short selling regulation. These include the exemption for market-making activities and the definition of market-making activities; the procedure for imposing short-term restrictions on short-selling; and the method of notification and disclosure of net short positions.
ESMA conducted a survey amongst competent authorities and received 20 responses to the
public consultation it launched.
Given this limited feedback and the potential effect that the recent application of Second Markets in Financial Instruments Directive (MiFID II) might have on some of the recommendations included in the technical advice, Ross highlighted that ESMA could revise some elements of its advice at a later stage.
In particular, the technical advice could not benefit from a number of elements that became available as of the MiFID II/Markets in Financial Instruments Regulation (MiFIR) application date.
Those elements include the additional information to be provided by the new transaction reporting and record-keeping obligations under MiFIR; the number of firms that will become systematic internalisers; and the number of firms that will be engaged in a market-making agreement under MiFID II.
Ross also discusses the technical advice recommendations for the exemption of market-making activities, short-term restrictions on short selling and transparency of net short positions and reporting requirements.
Click here to read ESMA's full list of technical advice recommendations.
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