European Short Sale Restrictions

Beginning on November 1, 2012, existing short selling regimes in individual European Member States (except Austria and Spain) will lapse with the implementation of the new European Short Selling Regulation.

Under the new Regulation, Member States will have authority to enact emergency bans during extreme periods of volatility.  MFA will post any further information on Member State bans on this page.

Click here to learn more about the European Short Selling Regulation.

Italy Reintroduces Short Selling Ban

Spain Reintroduces Short Selling Ban

Greece Extends Short Selling Ban

ESMA Update on Measures Adopted by Competent Authorities on Short Selling, July 24, 2012

 

Several European regulators imposed short sale restrictions on August 11, 2011. The links to the specific bans appear below:

Belgium:

France:

Germany:

Greece:

Ireland:

  • Beginning at midnight on Friday, December 30, 2011, the Central Bank of Ireland lifted the ban on short selling of certain financial instruments, which has been in place since September 2008.

Italy:

Spain:

ESMA:

MFA has been in touch with European regulators and the SEC regarding these matters.

8.13.2011 – 8.15.2011
MFA submitted letters to EU policymakers and market authorities on the decision by certain market authorities to restrict short selling.  In our letters, we urged them to consider the past experience when market authorities have implemented short sale restrictions and to refrain from or reconsider their decision to implement a short selling restriction, as evidence shows that such bans have proven to be more harmful than beneficial to markets.  Specifically, past experience with short selling restrictions show that:

  • Restrictions are counterproductive, further deteriorate investor confidence and increase volatility.
  • Restrictions impair the ability of investors to manage risk, leading many to sell additional securities to balance their portfolios.
  • Restrictions freeze the ability of financial institutions to raise capital through convertible bond and convertible preferred security issuances by preventing investors to purchase the convertible products and hedge the risk with offsetting short sales.
  • The absence of a consultation period undermines investor confidence and creates market uncertainty with respect to interpretive guidance and compliance efforts.

MFA submitted letters to:  France’s AMF and Ministry of Finance; Italy’s Consob and Ministry of Finance; Spain’s CNMV and Ministry of Finance; Belgium’s FSMA and Ministry of Finance; Germany’s BaFin and Ministry of Finance; European Securities and Markets Authority; European Council; European Central Bank; EC Commission Michel Barnier; and EC Commissioner Olli Rehn.