MFA Blog

ESMA Struggling to Implement Short Selling Rules

Posted on October 22, 2013

The new short selling regulation is giving the European Securities and Markets Authority a difficult time, according to a recent article from Money Marketing.  The publication reported that ESMA is “finding it difficult to implement European regulation on short selling due to a lack of clarity over how the rules have been set out.”

The short selling regulation came into force in November 2012, and ESMA is overseeing it.  While the rules require mandatory reporting of significant net short positions, ESMA’s executive director noted there are certain areas of the regulation that are unclear.

“The regulation’s aim is to create transparency in short positions to the regulator and the public at large, and [they] also include prohibitions around uncovered short sales,” Verena Ross said.  “We have spent a lot of time trying to clarify how to implement this.  There are a number of areas we have indicated that need further clarification.”  Ms. Ross did not say which aspects of the regulation are unclear, but the report said that ESMA later noted that it was aiming to refine certain definitions within the rules.

Read more about this story online from Money Marketing.  MFA has set up a resource guide for information on the European short selling regulation, available here.