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Country / Authority
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ACTIONS TAKEN / HYPERLINK TO STATEMENTS
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BELGIUM / CBFA
(Updated 23.09.2008)
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Measures regarding the short selling of securities
After consultation with the other supervisory authorities responsible for the supervision of Euronext, and taking account of the exceptional market conditions, the Management Committee of the CBFA intends to take the following measures with regard to the short selling of securities.
These measures are aimed at maintaining a consistent regulatory framework among the various financial markets and at avoiding abusive arbitrage.
1. The measures concern financial instruments with voting rights issued by financial institutions traded on Euronext Brussels; they apply to transactions entered into on own account or for the account of third parties, with the exception of transactions entered into by intermediaries acting in the capacity of a market maker, a liquidity provider or a counterparty of block transactions.
2. Any sales order that may lead to delayed settlement and delivery of one of the securities in question must be 100% covered by the securities that are the subject of the sales transaction.
3. Anyone who holds a net short position which represents an economic interest in excess of 0.25% of the capital of one of the relevant companies must disclose this to the CBFA and the market by any appropriate means, at the latest on D+1.
4. These measures serve to ensure the integrity and smooth operation of the markets. They are, in particular, aimed at preventing the execution of transactions which give or are likely to give false or misleading signals regarding the supply of, demand for or price of financial instruments, as provided for in Article 25 of the Law of 2 August 2002.
5. The CBFA requests that parties respect these measures as from Monday, 22 September 2008, for a period of three months.
6. In order to limit the causes of the market disturbance, financial institutions are requested to refrain from lending the securities in question except in order to cover a transaction that has already been entered into by the aforesaid date.
CBFA’s Press Release: http://www.cbfa.be/eng/Press/html/2008-09-19_cbfa.asp
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BULGARIA / Financial Supervision Commission
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CZECH REPUBLIC / Czech National Bank
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The Czech National Bank does not ban legitimate short-selling techniques and at this moment does not intend to proceed with temporary bans.
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CYPRUS/ Cyprus Securities & Exchange Commission
(Updated 05.12.2008)
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Although short selling is not expressly prohibited on the Cyprus Stock Exchange (CSE) it is not practised. In view of this no further action was deemed necessary apart from the close monitoring of the market to ensure that indeed short selling is not practised.
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DENMARK / Finanstilsynet
(Updated 13.10.2008)
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Executive Order on short-selling
The following shall be laid down pursuant to sections 39b and 93(4) of the Act on Securities Trading etc., cf.
Consolidated Act no. 848 of 19 August 2008 as amended by Act no. 1003 of 10 October 2008:
1.-(1) Agreements which lead to a short position or an increase of an existing short position may not be entered into regarding shares which are admitted for trading on a regulated market and issued by banks licensed under section
7 of the Financial Business Act.
(2) A position shall be deemed short according to subsection (1), if the person entering into the agreement 1) does not own at least the number of shares, said person shall deliver, or 2) has not entered into agreements, leading to said person
becoming the owner of at least the number of shares said person shall deliver at the time of delivery.
(3) Ownership according to subsection (2) shall not cover loans of shares.
2.-(1) Agreements shall not be entered into regarding other financial instruments than shares, by which capital gain can be obtained, if share prices drop on shares covered by section 1(1).
(2) The provisions of subsection (1) shall not apply for entering into agreements to hedge risk on shares covered by section 1(1), including hedging carried out on the basis of a stock index, if the hedging is in reasonable proportion to the
risk.
3.-(1) The provisions in section 1(1), and section 2 shall not apply to sale of shares and other financial instruments by market makers, when acting in their capacity as market makers.
(2) A market maker shall mean a securities dealer who is willing to trade on a continuous basis in the financial markets on his own account by buying and selling securities from his own holding at prices defined by him.
(3) The provision in section 1(1) and section 2 shall not apply to trading in own shares in buy-back programmes or to financial instruments as part of the stabilisation of the price of a security, provided such trading is carried out in accordance with Commission Regulation (EC) no. 2273 of 22 December 2003
implementing Directive 2003/6/EC of the European Parliament and of the Council regarding buy-back programmes and the stabilisation of financial instruments.
4.-(1) Any person violating section 1(1), and section 2 shall be liable to a fine.
(2) Companies etc. (legal persons) may incur criminal liability under the rules of Part 5 of the Criminal Code.
5. This Executive Order shall enter into force on 13 October 2008.
6.-(1) This Executive Order shall apply to Greenland and the Faeroe Islands.
(2) This Executive Order shall enter into force on the Faeroe Islands on the day after publication in the official Law Gazette of the Faeroe Islands.
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GERMANY / BaFin
(Updated 19.12.2008)
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Restrictions maintained on short-selling of financial stocks
The Federal Financial Supervisory Authority (BaFin) extended its ban on certain short-selling transactions to 31 March 2009.
By its Decrees dated 19 and 21 September, BaFin had prohibited naked short selling (uncovered short selling transactions) in shares of eleven financial companies. Naked short selling exists when the seller sells shares which he does not own or for which he does not have a plea-proof claim to transfer of title in shares of the same class at the time of the transaction.
Please also note that the BaFin has prepared a document concerning FAQs which will be updated continuously. The full text of both decrees and the answers to FAQs can be found under the following link:
http://www.bafin.de/cln_116/nn_720486/SharedDocs/Artikel/EN/
Service/Meldungen/meldung__081219__leerv__verlaeng.html?__nnn=true
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ESTONIA / Finantsinspektsioon
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GREECE / CMC
(Updated 31.10.2008)
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The Hellenic Capital Market Commission (HCMC), after taking into consideration the extraordinary circumstances which prevail in the international financial markets and after evaluating the particular circumstances of the Hellenic market, decided to take temporary measures in relation to short selling with the aim of further strengthening the transparency of the market and generally the protection of the smooth functioning of the market.
More specifically, the Board of Directors of the HCMC decided the following:
· The members of the Athens Exchange, which perform short sales on shares are obliged to flag them as such when entering the relevant sale orders
· On a daily basis the following will be published, in the Daily Official List Announcements:
a) the total amount of short sales performed by share
b) the total number of shares by issuer that have been lent
· The natural persons or legal entities that have short position on a specific share, which is greater than 0,10% of the number of shares of the issuer, are obliged to notify this position immediately to the HCMC and to make it public by publishing it in the Daily Official List Announcements of the Athens Exchange, at the latest the following day after exceeding this benchmark. The same requirement stands for every amendment of this percentage.
These measures are enter into force from tomorrow, the 24th September 2008, and will remain in force until the 31st December 2008.
It should be noted that the investment firms and the credit institutions which execute orders on clients accounts are obliged to ensure that their clients, who sell shares, are in the position to deliver the shares sold on time within the relevant settlement term.
On 31 October 2008, the Board of Directors of the HCMC has decided to extend the prohibition of short selling by 31 December 2008
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SPAIN / CNMV
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The Executive Committee of the CNMV, on an extraordinary session held today (22/09/08), recognizing the exceptional circumstances of securities markets and the initiatives taken by securities supervisors in other jurisdictions, on short selling, has agreed to:
1. Remind all regulated market members of the existence of rules that prohibit and penalize naked short sales and the need to observe them tightly. To this end, taking into account article 64 of the Stock Exchange Regulation, regulated market members are urged to use the powers that article 39 of the Securities Markets Act confers to them to ensure that their clients hold the securities before processing their orders to sell, either by relying on their own registers if they act as their custodians or by obtaining the explicit assurance by the client that they are not conducting a naked short sale.
2. Watch closely the observance of these rules by members of regulated markets and their clients to avoid any conduct that might alter the orderly functioning of markets or constitute market abuse.
3. After establishing the limitations of the accuracy of existing public information on securities lending, the CNMV considers it necessary adopt temporary measures, in the current market context, aimed at reinforcing the public information on short positions. Therefore, according to article 85.5 of the Securities Markets Act (SMA), we have agreed to require any natural or legal person holding short positions over shares or cuotas participativas issued by the issuers listed in Annex 1 (that might be modified at any time by the CNMV) to disclose any short position exceeding 0.25% of the listed stock of any of those issuers. Increases or decreases of those short positions from 0.25% are also subject to public disclosure before 19:00h of the day after each change. This agreement will be forwarded to all members of regulated markets, investment firms, collective investment managing companies with the Central Securities Depository (CSD) forwarding it, immediately, to all their clients or participants.
The disclosure mentioned above will be made through a statement addressed to the Dirección General de Mercados (General Markets Directorate) of the CNMV, stating the date, the entity making the disclosure and the resulting net positions, expressed in number of securities and percentage of the listed capital (or cuotas).
This measure is adopted on a temporary basis, starting at 00:01 h Madrid time of the 24th September and it will be maintained until market conditions that motivated it fade away and the CNMV so declares.
4. For the purpose of this agreement, a naked short sale is a sale in which the seller does not hold previously the securities it is selling, either by means of a previous purchase, a securities loan agreed or signed before the sale or the irrevocable exercise of a convertible security, option or any kind of derivative instrument. In particular, at the settlement level, a sale justified on its theoretical settlement date with a securities loan registered after the sale date will be considered a naked short sale unless the seller demonstrates sufficient holding of the relevant securities before the order to sell was placed.
For the sole purposes of point 3, a short position will be the net result of all positions in financial instruments, including shares or cuotas and any derivative that has them as underlying, that give the firm or person a positive (profit) exposure to downward movements in the price of the shares (or cuotas) over which the disclosure is required.
5. The content of this agreement is without prejudice to the mechanisms established by Iberclear (Spanish CSD) to ensure settlement finality, including penalties for undelivered sales.
6. Hiding disclosable short positions and transmitting false information to market members regarding the fact that the client is not conducting a naked short sale will be regarded by the CNMV as an indication of a possible market manipulation. To this effect, the CNMV will take into account the operating needs of market makers and liquidity providers, understood as firms that trade on a principal basis to provide liquidity, hedge or process clients trades and hedging of derivative instruments positions.
Without prejudice to the above mentioned measures, the CNMV will reinforce its supervision and monitoring powers on financial instruments trading conducts and in particular those that could constitute market abuse.
Any clarification request in relation to this agreement can be sent to the Secondary Markets Directorate of the CNMV.
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FRANCE / AMF
(Updated 19.12.2008)
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AMF maintains exceptional measures on short-selling of financial sector securities
The Board of the Autorité des marchés financiers (AMF) has decided to maintain the measures it introduced on 19 September to govern the short-selling of financial sector securities.
In light of current market conditions, the Board saw no reason to modify the September measures, which therefore remain unchanged:
- the list of companies concerned is identical to that published on 22 September;
- the contents of the Q&A issued on 23 September are still valid.
Marie-Ange Debon and Jean-Pierre Hellebuyck, who co-chair the working group formed in early Novemberto recommend a permanent regime governing short-selling, have been asked by the Board to put forwardproposals as soon as possible with a view to harmonising the short-selling regulations that apply in leading
financial centres. The Board is closely monitoring the group's deliberations, as well as the work being donein this area by CESR and IOSCO, and intends to re-examine in February the measures it has today (19.12.2008) decided to keep in place.
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IRELAND / IFSRA
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Please refer to the guidance note on the website re short selling:
http://www.ifsra.ie/frame_main.asp?pg=%2Fnews%2Fnw%5Frecs%2Easp&nv=%2Fnews%2Fnw%5Fnav%2Easp
Additionally, the rules are updated as below in the section Industry/Securities Markets Regulation/Market Abuse Directive.
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ICELAND / FME
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http://www.fme.is/?PageID=580&NewsID=335
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ITALY / CONSOB
(Updated 30.12.2008)
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Consob: short sales prohibition extended, with amendments, until January 31, 2009
Consob (Commissione Nazionale per le Società e la Borsa) resolved today to extend until January 31, 2009 the prohibition of short sales expiring tomorrow, December 31, 2008, by introducing amendments to the previous resolution.
According to the today resolution, the sale of shares, which are listed and traded on a regulated market, issued by banks and insurance companies or by the relevant holdings and issued by companies increasing their capital shall be supported, from the moment of the order up and until the date of the settlement of the transaction, by both the availability and the ownership by the ordering party of the relevant securities. Therefore, the regime in force as of October 29, 2008 will continue to apply to the limited extent of the shares issued by the abovementioned companies (see encl. ).
Conversely, as regards the remaining shares listed and traded on a regulated market, the sale shall be supported by the availability of the securities.
In the course of January Consob will carry out consultations with market operators.
The text of the resolution (no. 16765 of December 30, 2008) is available on Consob web-site.
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With regard to the measures on short sales adopted by Consob (Commissione Nazionale per le Società e le Borse) on September 22, 2008, Consob discloses to have adopted on 1 October 2008 a resolution which introduces further restrictions. According to the new resolution, the sale of shares issued by banks and insurance companies listed and traded on the Italian regulated markets should be supported not only by the availability, but also by the ownership, by the ordering party of the relevant securities, from the moment of the order up and until the date of the settlement of the transaction.
Moreover, the resolution provides that securities held by way of securities lending transactions, carried out in whatsoever technical form, shall not be taken into account for the purposes of the availability and ownership requirements.
The resolution takes effects from 2.00 pm of October 1, 2008 to 12.00 pm of October 31, 2008.
The text of the resolution (no. 16645 of October 1, 2008) is the following:
Measures on short sales of securities aimed at ensuring the orderly conduct of trading and the integrity of the market
THE ITALIAN COMPANIES AND STOCK EXCHANGE COMMISSION (CONSOB)
Having regard to Law 216 of June 7, 1974, as subsequently amended;
Having regard to Article 74, para. 1 and para. 3, of Legislative Decree No. 58 of February 24, 1998, according to which Consob shall supervise regulated markets with the aim of ensuring the transparency of the markets, the orderly conduct of trading and the protection of investors, by adopting, in cases of necessity and as a matter of urgency, all the measures required for the above-mentioned purposes;
Having regard to Article 21, paragraph 1, lett. a) of Legislative Decree No. 58 of February 24, 1998, according to which, in providing investment services and activities and non-core services authorized intermediaries shall act diligently, fairly and transparently in the best interest of the clients and the integrity of the market;
Having regard to Consob Resolution No. 16622 of September 22, 2008 whereby Consob adopted measures setting restrictions on short sale of shares issued by banks and insurance companies with the aim of ensuring the transparency, the orderly conduct of trading and the protection of investors;
Taking into account that, in light of the evolution of the market situation, it is necessary to adopt additional restrictions with reference to short sale of the above-mentioned shares;
R E S O L V E S
1. The sale of shares issued by banks and insurance companies listed and traded on the Italian regulated markets shall be supported, from the moment of the order up and until the date of the settlement of the transaction, by the availability and ownership by the ordering party of the relevant securities.
2. For the purpose of para. 1 above, securities held by way of securities lending transactions, carried out in whatsoever technical form, shall not be taken into account.
3. The operators for the clearing and settlement systems shall adopt any and all measures to prevent speculative manoeuvres that may entail an anomalous reduction of the prices of shares issued by banks and insurance companies.
4. These provisions shall not apply to the activity carried out, in the exercise of their own functions, by market makers referred to under Article 1, paragraph 5-quater of Legislative Decree No. 58 of February 24, 1998, nor to the activity carried out in regulated markets, in the exercise of their own functions, by specialists and liquidity providers as defined in the Listing Rules of the regulated markets organised and managed by Borsa Italiana S.p.A.
The provisions of this resolution shall take effects from 2.00 p.m. of October 1, 2008 to 12.00 p.m. of October 31, 2008.
On October 10, 2008 CONSOB adopted a resolution with the effect of banning short sales on all shares listed and traded on Italian regulated markets (Resolution no. 16652).
On October 29, 2008 Consob resolved to extend to December 31, 2008 the deadline of the resolution concerning the banning of short sales on all shares listed and traded on Italian regulated markets (Resolution no. 16670).
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CYPRUS / CYSEC
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LATVIA / Financial & Capital Market Commission
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Short-selling is not specifically restricted on our regulated market (Riga Stock Exchange) because it is not widespread, and therefore we have no special rules for such measures.
At the same time, the Commission notifies the market participants of decisions regarding any restrictions on short-selling taken in other Member States and will follow the developments in this regard also in the future.
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LITHUANIA / Lithuanian Securities Commission
(Updated 01.10.2008)
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There is no legal possibility to perform a naked short-sell transaction, as according to Lithuanian legislation one should have equities (of his own or borrowed) on his account when submitting respective order to the market. In general, short-selling is neither specifically regulated, nor restricted on the Vilnius stock exchange (Lithuanian regulated market).
This kind of activity is not wide spread on the market.
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LUXEMBOURG / CSSF
(Updated 23.09.2008)
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Decision taken by the CSSF prohibiting net short selling in publicly quoted banks and insurance companies
http://www.cssf.lu/uploads/media/communique__short_selling190908.pdf
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HUNGARY / HFSA
(Updated 01.10.2008)
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Dear CEO letter on data provision obligation for reporting short-selling transactions
CESR has initiated uniform measures to be taken by the supervisory authorities of the capital markets of the EU for handling short selling transactions.
With respect to the recent developments in the capital markets and the initiative of the CESR moreover in order to enhance transparency and prevent possible market manipulation the Hungarian Financial Supervisory Authority (“HFSA”) similarly to other supervisory authorities finds necessary to give effect to the following measures in excess of the already ordered data provision obligation.
Any and all investment firms as well as credit institutions pursuing investment services supervised by the HFSA that have trading rights on the Budapest Stock Exchange (“BSE”) (“Financial Institutions”) are hereby obliged to report to the HFSA.
The Financial Institutions shall report with respect to the shares listed on the BSE those short selling transactions realized in the trading system of the BSE (including intra-day transactions as well) in which the number of the items of the transaction reaches or exceeds 0.01% of the total number of the same share listed on the BSE.
The report shall contain the following data:
(i) day of the transaction;
(ii) name of the share;
(iii) ISIN Code of the share;
(iv) the number of shares involved in the transaction;
(v) selling price of the share;
(vi) indication whether dealing on own account or on the basis of client order.
The reports with the above data shall be provided for the transactions concluded between September 29, 2008 and December 31, 2008. The data for a given day shall be provided to the HFSA until 2 p.m. on the trading day following the transaction to the following e-mail address: sstadat@pszaf.hu.
The HFSA hereby draws the attention of the Financial Institutions that when executing client orders they shall make sure that the client will be able to deliver the securities within the settlement period.
The obligation to provide the above data shall not restrict the conclusion of the transactions.
Dated at: Budapest, September 29, 2008
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MALTA / MFSA
(Updated 25.09.2008)
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The MFSA has not taken any action regarding short-selling because although short-selling is not prohibited and the MFSA has not issued any rules in this regard, the activity is not taking place on the local stock market.
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THE NETHERLANDS / AFM
(Updated 30.10.2008)
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The Netherlands Authority for the Financial Markets (AFM) and De Nederlandsche Bank N.V. (the Dutch central bank - DNB) hereby give notice that the AFM, in view of the current exceptional market conditions and also with regards to the pending legislative proposal to amend the Financial Supervision Act (Wet financieel toezicht – Wft), announces new measures concerning the holding of a short position in financial enterprises. This concerns financial enterprises as referred to in the Financial Enterprises appendix to this measure. Therefore, the measure of 21 September 2008 will no longer apply with effect from 5 October 2008, without prejudice to the provisions in section 2(IV) of the present measure.
DNB welcomes this announcement from the perspective of financial stability.
1.Short selling in Financial Enterprises
(I)An entity that enters into a transaction or places a trading order which, (either by itself or in combination with other transactions or trading orders) has the following effect:
a.to create a net short position1 in a Financial Enterprise; or
b.to increase a net short position in a Financial Enterprise, which position existed before 5 October 2008;
will be considered to fall under the prohibition of Section 5:58 (1), of the Financial Supervision Act (market manipulation).
(II)Part (I) is not applicable to an entity acting in the capacity of Market Maker2.
(III)Part (I) is not applicable to a transaction entered into or trading order that has been placed before 5 October 2008.
(IV)This regulation becomes effective on 5 October 2008 and applies for a period of 30 days. Both the term and the contents of this measure can be modified in the meantime.
2.Notification of existing positions
(I)The AFM requests the entity that holds or will obtain a Notifiable short position3 in a Financial Enterprise – irrespective of how and when this position has arisen – to make proper contiguous notifications.
(II)In part (I), `proper contiguous notification’ means notification to the AFM not later than on the following working day after the Notifiable short position has arisen. The notification contains at least the name of the entity that holds the position, the size of the position, the name of the Financial Enterprise concerned and the date on which the Notifiable short position was held.
(III)The first notification under this measure will be made at the end of the day on Tuesday 7 October 2008. This notification concerns the positions that were held at the end of the day on Monday 6 October 2008.
(IV)The request to notify short positions on the basis of the measure of 21 September 2008 remains effective for the short positions held at the end of the day on Friday 3 October 2008.
(V)This request becomes effective on 5 October 2008 and applies for a period of 30 days. Both the term and the contents of this request can be modified in the meantime.
DEFINITIONS
1. Net short position: a net short position which gives rise to an economic exposure to the issued share capital of a financial enterprise. In calculating whether an entity holds a short position, the entity must include every form of economic interest related to the total issued capital of the Financial Enterprise concerned.
2. Market maker: an entity that, ordinarily as part of their business, deals as principal in equities and/or derivatives (whether OTC, exchange-traded or on an MTF) in a way that ordinarily has the effect of providing liquidity on a regular basis to the market on both bid and offer sides of the market in comparable size.
3. Notifiable short position: a Net short position that represents an economic interest in the total issued capital of the financial Enterprise concerned of a quarter percent (0.25%) or more. When calculating whether an entity holds a Notifiable short position, the entity must include every form of economic interest related to the total issued capital of the Financial Enterprise concerned, with the exception of an economic interest that it holds in its capacity of Market Maker.
FINANCIAL ENTERPRISES APPENDIX
AEGON N.V. NL0000303709
ING GROEP N.V. NL0000303600
FORTIS N.V. BE0003801181
BINCKBANK N.V. NL0000335578
KAS BANK N.V. NL0000362648
SNS REAAL N.V. NL0000390706
VAN DER MOOLEN HOLDING N.V NL0000370179
VAN LANSCHOT N.V. NL0000302636
The AFM also updated their FAQ concerning short-selling:
http://www.afm.nl/marktpartijen/default.ashx?DocumentId=11485
Update as of 30/10/2008
In view of the ongoing exceptional market circumstances, the Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten, AFM) has decided to extend its October 5th measures against short selling until 17 January 2009 without change.
This extension is in line with the UK Financial Services Authority's measure, which is in force until 16 January 2009.
http://www.afm.nl/corporate/upl_documents/verlenging_triss_en.pdf
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NORWAY / Kredittilsynet
(Updated 09.10.2008)
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In connection with the financial market turmoil, Kredittilsynet (the Financial Supervisory Authority of Norway) has observed unusual market movements in some shares quoted on the Oslo Stock Exchange, and cannot rule out the possibility that the volume of short sales in these quoted instruments may be substantial.
In the present market situation, with particularly wide movements in the price of some shares issued by financial institutions, Kredittilsynet is of the view that any investment firms and investors making short sales, covered or uncovered, in such financial shares are acting in contravention of the Securities Trading Act section 3-9 on prohibition of unreasonable business methods. Kredittilsynet emphasises that this is a provisional assessment. Kredittilsynet will monitor the situation with a view to prolonging the ban and, if appropriate, to including in the ban other financial instruments quoted on the Oslo Stock Exchange.
When, in Kredittilsynet’s assessment, the situation is once again such that short selling in financial shares is no longer in contravention of the ban, Kredittilsynet will inform the market accordingly..
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AUSTRIA / FMA
(Updated 12.11.2008)
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1) Short Selling Circular of the FMA
In a circular dated 22 September 2008, FMA defines in detail the obligation to report suspicious transactions laid down in section 48d par. 9 in conjunction with section 48e par. 5 Stock Exchange Act in accordance with the EU's Market Abuse Directive. Under this Directive, anyone transacting business in financial instruments professionally has the duty to promptly report to the FMA any justified suspicion that a transaction that might qualify as market manipulation or an illegal insider trade. In its circular, the FMA stated that taking on or holding net short positions may constitute market abuse. A net short position is defined as offsetting and/or aggregated positions in a financial instrument of more than 0.25% of an issuer’s capital outstanding. This includes equities as well as all equity derivatives (options, futures, convertible bonds, CfDs, for example).
For questions arising from the Circular market members can consult the “Frequently Asked Questions” on the FMA’s website.
2) Changes in the Terms and Conditions of the Central Clearing Agent CCP.A
The Vienna Stock Exchange and the central clearing agent CCP.A, in co-ordination with FMA, have reduced the period allowed for covering deliveries not made on time by 8 days. Sellers will remain under the obligation to deliver the securities within three days of the trade (T+3), but should he fail to deliver on time, the clearing agent will require delivery to be to be completed in a much shorter time (within two days). In the case of failure to deliver on time, the Austrian clearing agent will cover the transaction (buy the securities) or settle the trade by cash (cash payment of the current value of the securities). In the case of cover purchases, the defaulting seller will be charged the higher price between the original sell price and the cover price.
3) Changes in the Trading rules of the Vienna Stock Exchange
On 10th of october the Vienna Stock Exchange has prohibited short selling in it´s trading rules in all traded securities temporarily. The Stock Exchange defines Short selling if a seller of a share is not the owner of the concerned securities at the time of the transaction, or when at the time of the transaction the seller does not have any unconditional right under contract law or property law to enforce the transfer of ownership of securities of the same category or when the seller does not have any unconditional right under contract law or property law that would reysult in the transfer of ownership of securities of the same category.
The Trading Rules apply to all market members on the Vienna Stock Exchange.
4) Short Selling Regulation of the FMA dated 28th of October 2008
According to the adjustment of the Austrian Stock Exchange Act which entered into force on 26th of October 2008 the FMA is authorized, to appoint specified financial instruments where so-called short selling shall not be permitted for a definite period of max. 3 month or where short sellings are subject to certain restrictions.
With the Regulation the FMA prohibited the uncovered short selling in stocks of four relevant financial intermediaries namely Erste Bank, Raiffeisen International, Uniqa Insurance Group and Vienna Insurance Group.
In case of an ongoing „danger in delay“ after a period of three month, FMA is entitled, upon approval by the minister of finance, to prolongue the taken measures for up to 6 months.
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POLAND / KNF – Polish FSA
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Short-selling, although possible, is a very uncommon activity in Poland due to relatively restrictive regulations (although some financial instruments on the WSE are eligible for being traded that way): list available here.
http://www.gpw.pl/gpw.asp?cel=e_inwestorzy&k=6&i=/e_papiery/short_selling/short&sky=1
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PORTUGAL / CMVM
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The Executive Board of the Comissão do Mercado de Valores Mobiliários (CMVM) approved, at an Extraordinary Meeting, an Instruction (Instruction 1/2008 – Short Selling Transactions), published on Friday 19th September on the CMVM website, which makes the daily reporting of information on short-selling transactions mandatory.
This obligation is incumbent on the members of Euronext Lisbon and members of the PEX Multilateral Trading Facility.
The Press Release in English may be found on our website:
http://www.cmvm.pt/NR/exeres/B39F37CF-C36F-4BCC-99C8-175ECD6396E2.htm
The CMVM Instruction nr 1/2008 is also available through:
http://www.cmvm.pt/NR/exeres/A0BF5A48-BA88-4CD1-82A6-173AEC445477.htm
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ROMANIA / National securities Commission
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SLOVAK REPUBLIC / National Bank of Slovakia
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National Bank of Slovakia has not published any statements regarding short-selling
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SLOVENIA : Securities Market Agency
(Updated 23.09.2008)
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The Securities Market Agency has not taken any actions related to short-selling. No Press Release or Statement has been published.
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FINLAND / Rahoitustarkastus
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Rahoitustarkastus has not taken any actions related to short-selling
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SWEDEN : Finansinspektionen
(Updated 25.09.2008)
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Due to the discussion concerning short-selling of shares, Finansinspektionen (FI) would like to provide information on what actions have been taken:
· FI continually requests that the banks and other financial market participants submit statistics on share loans.
· FI has increased its focus on market surveillance of trading in financial companies. Suspected market manipulations are immediately reported to the Swedish National Economic Crimes Bureau.
· FI compiles statistics on the settlement quality of securities transactions from the Swedish Securities Register Centre.
A ban on short-selling in Sweden would probably require legislative changes. At the present time, Finansinspektionen sees no reason to limit short selling.
Using short selling to unlawfully influence the price of a security is already prohibited today through the regulation contained in the Financial Instruments Trading (Market Abuse Penalties) Act (SFS 2005:377).
Short-selling normally refers to when someone sells shares or other securities which have been borrowed from someone else. For this loan, the person pays a fee and assumes the responsibility to return the shares. The purpose of short selling can be to protect one's portfolio, but is often for speculating on a decline in the short sold shares. Because it is a matter of a securities loan, the person is obligated to return the borrowed shares, most often at a predetermined time. This means that those who short sell a share sooner or later must buy back the same shares for the purpose of returning them to the owner.
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UK / FSA
(Updated 06.12.2008)
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The Financial Services Authority (FSA) is proposing to extend its temporary disclosure regime for significant net short positions in the stocks of UK financial sector companies until 30 June 2009. Continuing to require disclosure will reduce the potential for abusive behaviour and disorderly markets. The FSA is not proposing to renew its ban on short selling of these stocks but is prepared to reintroduce the ban without consultation if necessary.
Press release
http://www.fsa.gov.uk/pages/Library/Communication/PR/2009/001.shtml
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Press notice and a 5 page Q&A on short-selling proposals
http://www.fsa.gov.uk/pages/Library/Communication/PR/2008/102.shtml
http://www.fsa.gov.uk/pubs/other/short_selling_faqs.pdf
Instrument, list of firms, disclosure form and copy of Callum McCarthy’s speech from 18th September 2008.
http://www.fsa.gov.uk/pubs/handbook/instrument2_2008_50.pdf
http://www.fsa.gov.uk/pubs/handbook/list_instrument200850.pdf
http://www.fsa.gov.uk/pubs/other/Form_TR4.pdf
http://www.fsa.gov.uk/pages/Library/Communication/Speeches/
2008/0918_cm.shtml
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