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 notification 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 certain circumstances, Member State regulators as well as the European Securities and Markets Authority (ESMA) may impose restrictions or outright bans “in exceptional circumstances.”
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