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Under Thursday’s agreement, traders will now be able to roll over existing short positions on European indices, although they will not be able to take out new short bets.
The AMF admitted on Thursday that it had “adjusted” its position and said that investors holding a net short in an index basket would be allowed to roll forward their positions, “even if such a rolling results in the creation of a net short position with a further expiry”. The change in stance by AMF, amid slumping stock markets, effectively reversed its earlier position that had banned an extension to contracts of futures and options – so-called “rolling over” – that are due to expire on Friday.
The legal position of the contracts had been complicated by AMF’s stance that banned investors both within France and abroad from creating or increasing short positions in specified French financial stocks, such as Société Générale and BNP Paribas. Traders also reported that investors had turned their attention to shorting the German Dax index, which outpaced rival European indices in falling 5.8 per cent.
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