EU’s lowered short selling reporting threshold renewed again
18 December 2020 France
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The European Securities and Markets Authority (ESMA) has renewed the lowered reporting threshold for net short positions at 0.1 percent until 19 March 2020.
The EU’s Short Selling Regulation requires the holders of net short positions in shares traded in its markets to notify the relevant national competent authority (NCA) if the position reaches or exceeds 0.2 percent of the issued share capital.
The threshold for reporting short positions was due to revert to its usual limit as of 18 December, having already been extended once since it was originally slashed in March.
The bar was initially lowered in order to give national regulators and ESMA greater oversight of markets during the period of turmoil when the COVID-19 pandemic first hit Europe.
In justifying the move, ESMA says the decision will “continue to support the ability of NCAs to deal with threats to the orderly functioning of markets and financial stability at an early stage”.
Shifting the deadline until 2021 represents another area of divergence between the UK and EU as the Financial Conduct Authority has set out plans to revert to the 0.2 percent threshold once the Brexit transition period ends on 31 December.
The EU’s Short Selling Regulation requires the holders of net short positions in shares traded in its markets to notify the relevant national competent authority (NCA) if the position reaches or exceeds 0.2 percent of the issued share capital.
The threshold for reporting short positions was due to revert to its usual limit as of 18 December, having already been extended once since it was originally slashed in March.
The bar was initially lowered in order to give national regulators and ESMA greater oversight of markets during the period of turmoil when the COVID-19 pandemic first hit Europe.
In justifying the move, ESMA says the decision will “continue to support the ability of NCAs to deal with threats to the orderly functioning of markets and financial stability at an early stage”.
Shifting the deadline until 2021 represents another area of divergence between the UK and EU as the Financial Conduct Authority has set out plans to revert to the 0.2 percent threshold once the Brexit transition period ends on 31 December.
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