Noteworthy in this respect, as announced on the occasion of that extension, is the ongoing process of restructuring in the Spanish financial sector to cover the banking sector's capital needs. This process is being undertaken in the framework of the Memorandum of Understanding (MoU) signed on 23 July by the European Commission, the Kingdom of Spain and the Bank of Spain. The MoU made the provision of assistance conditional upon fulfilment of a number of conditions, including an assessment of individual capital needs, recapitalisation of the banks, and the segregation of impaired assets into an asset management company.
This process of bank restructuring has not yet concluded, which creates a range of uncertainties with respect to the Spanish financial system that may affect financial stability. In this context, failure to ban short sales would heighten uncertainty through their likely impact on the market. Completion of that process is considered to be absolutely necessary to ensure the stability of the Spanish financial system and capital markets. Moreover, available empirical evidence reveals that a number of events or circumstances that led to the adoption of the July decision and its extension and which may threaten the integrity of the Spanish financial markets are persisting.
Accordingly, the foregoing factors make it advisable to maintain the temporary restrictions on transactions that create or increase net short positions in Spanish shares and to impose a ban, in accordance with Regulation (EU) No. 236/2012 of the European Parliament and of the Council, of 14 March 2012, on short selling and certain aspects of credit default swaps, effective from this day.
Additionally, on this day, in accordance with article 27 of the aforementioned Regulation, ESMA has issued its opinion on the measures adopted by the CNMV, in which it considers the measure to be appropriate and proportional to address the threats persisting in Spain and that its duration is justified.
Press release
ESMA-opinion
© Comisión Nacional del Mercado de Valores
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