Comment Letter to European Commission on Proposals Relating to Short Selling

MFA submitted a letter to the European Commission in response to its Consultation Paper on Short Selling. In our letter, we recommend that: (i) any rules require that reporting to a regulator be non-public and fully protect the confidentiality of the information; (ii) any rules should be based on a de minimis reporting threshold for private reporting to regulators of at least 0.5%; (iii) if there is evidence showing that public disclosure is necessary and beneficial, any rules should only require regulators to make available to the public aggregated anonymised data on short selling using the information privately reported to them, but at a higher threshold (such as 2%); and (iv) any rules prohibiting uncovered or naked short selling of shares should apply where the investor has neither pre-borrowed, agreed to borrow, nor has reasonable grounds that he will be able to borrow the shares by the time of settlement.