Further update 18 May 2020
On 18 May 2020, all of the six EU Member State regulators referred to below announced that their respective bans would be lifted at 23:59 or 24:00 CET of 18 May 2020. Accordingly, the bans no longer apply from the start of the trading day on 19 May 2020. Please note that the ESMA Decision referred to below (under which the reporting threshold for net short positions in shares has been reduced from 0.2% to 0.1%) remains in place and is scheduled to expire on 16 June 2020.
Originally published 20 March 2020, updated 20 April 2020
The EU Short Selling Regulation (Regulation (EU) no. 236/2012) (the SSR) has, since 1 November 2012, regulated short selling and sovereign credit default swaps (CDS) in the EU.
The SSR imposes (i) a net short position reporting requirement for shares and sovereign debt, (ii) a prohibition on uncovered short sales of shares and sovereign debt and (iii) a prohibition on uncovered sovereign CDS.
The SSR also contemplates that in “exceptional circumstances”, EU Member State regulators as well as the European Securities and Markets Authority (ESMA) may impose additional restrictions or outright bans.
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