Resource Guide: EU Short Selling Regulation Compliance

The European Short Selling Regulation (“SSR”) will take effect on November 1, 2012.  The SSR will have a potentially significant impact on many MFA members, whether those members are based in the U.S. or in the European Union (“EU”). MFA has closely monitored the SSR throughout its development from proposed legislation by the EU Council and Parliament, to final implementing regulations issued by the European Commission and the European Securities and Markets Authority (“ESMA”). For your convenience, we have assembled below the key legislative and regulatory materials that have been issued by EU policy makers in connection with the SSR. In addition to these materials are links to the audio recording and presentation slides from MFA’s recent Members Only webinar covering the SSR.

In broad terms, there are three primary categories of regulation within the SSR that will have an impact on MFA members:

  1. Reporting and disclosure requirements for net short positions of shares and sovereign debt
  2. Restrictions on “uncovered” short sales of shares and sovereign debt
  3. Restrictions on “uncovered” EU sovereign CDS

If you have any questions about the SSR,  please contact MFA at (202) 730-2600. Please check back regularly, as this page will be updated when additional materials are published.

Final Text and Regulations Implementing the SSR

Final Legislative Text of the Short Selling Regulation

European Commission Short Selling Website (includes all of the links below)

Final Delegated Regulation

  • This Regulation covers the following issues: definitions, the calculation of net short positions, covered sovereign credit default swaps, notification thresholds, liquidity thresholds for suspending restrictions, and significant falls in the value of financial instruments and adverse events.

Final Delegated Regulation

  • This Regulation covers only the method of calculation of the fall in value for liquid shares and other financial instruments.

Final Implementing Technical Standards

  • These Standards cover the following issues: the means for public disclosure of net position in shares, the format of the information to be provided to ESMA, the types of agreements, arrangements and measures to “locate” shares or sovereign debt, and the determination of the principal venue for a share.

Final Implementing Technical Standards

  • These Standards cover the following issues: notification and disclosure requirements for net short positions, the details of the information to be provided to ESMA, and the method for calculating turnover to determine exempted shares.

EU Member State Resource Links

Guidance Issued by ESMA and Member States

ESMA: Short Selling Q&A (updated January 30, 2013)

ESMA: List of Exempted Shares (updated January 3, 2013)

ESMA: List of Net Short Position Notification Thresholds for Sovereign Debt (Figures are approximations; definitive thresholds to be published by November 1, 2012)

ESMA: List of Websites Where Net Short Positions in Shares are Disclosed (updated November 22, 2012)

ESMA: List of Websites with Information on the Process for Notification of Net Short Positions and Reporting Forms (updated November 22, 2012)

Germany: BaFIN Short Selling FAQ (updated January 31, 2013)

France: AMF User’s Guide (released October 31, 2012)

MFA Resources