22 February 2018

Verena Ross, ESMA’s Executive Director, speaks at ECON scrutiny on Short-Selling Regulation

The ECON scrutiny session dealt with ESMA’s Technical Advice on the evaluation of certain elements of the Short Selling Regulation (SSR) of 21 December 2017. In her opening statement, Ms Ross explained the three main areas of ESMA’s SSR advice:

the exemption for market making activities and the definition of market making activities;

the procedure for imposing short-term restrictions on short-selling; and

the method of notification and disclosure of net short positions.

In relation to the last main topic, transparency of net short positions and reporting requirements the Technical Advice suggests:

a. maintaining the current thresholds for notification to competent authorities and disclosure to the public (respectively 0.2% and 0.5% of the issued share capital);

b. not imposing any requirement for competent authorities to periodically publish anonymised aggregated net short positions by issuers. Competent authorities may do so on a voluntarily basis;

c. that where the relevant thresholds are crossed, notifications to competent authorities should be submitted no later than 15:30 of the following day, while publication should be made no later than 18:00;

d. establishing a centralised reporting and disclosure system to reduce the burden of the notifying persons and further promote transparency by facilitating the access to the information;

e. clarifying that the determination of the issued share capital for the purposes of calculating the net short positions should be based on the publicly available information;

f. using the Legal Entity Identifier (LEI) for legal entities when notifying their net short positions; and

g. the use of the nominal method for the calculation of net short positions in sovereign debt for both spot and derivative instruments.

Full speech

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