ECON committee: Consideration of amendment on draft report on short selling and CDS
08 February 2011
Maria Teresa Fabregas, deputy head of DG MARKT’s Unit on Securities Markets, stressed that the flagging issue is an essential provision in the Commission proposal in order to guarantee transparency.
Rapporteur Pascal Canfin (Greens/FR) said that the first working group meeting on the compromise amendments was last week and that is was very productive. Next week another working group meeting will take place.
Antolín Sánchez-Presedo (S&D, ES), on behalf of shadow rapporteur Goebbels (S&D, LU) said that the regulation should strengthen the role of the ESMA and that all financial products should be supervised regardless of where these products are traded. He also stressed that there is a need to mark the orders and that legislators cannot rule out this regulatory option by arguing that it will be too costly. On naked short selling, the S&D opposes a ban on it but believes that there is a need to look at it in detail and to see whether the underlying assets are own or not by the investor.
Shadow rapporteur Olle Schmidt (ALDE, SE) believes that Canfin has evolved in the right direction on his arguments. He supports giving more power to ESMA than to national authorities on this issue. Schmidt also thinks that marketing of orders will be very costly for the final investor. On the core issue on naked short selling, he is against any ban of it.
Shadow Rapporteur Syed Kamall (ECR, UK), was very pleased with Canfin’s attitude towards other arguments during the first negation for the compromise amendments. As regards sovereign CDS, Kamall stressed that investors across Europe are very concerned about the cost of banning CDS. He pointed out that by banning naked CDS, the cost of government borrowing will be pushed up and the current debt crisis will get even worst. Moreover, there is an urgent need to understand why institutions use naked short selling and why do they invest on that way.
Shadow Rapporteur Markus Ferber (EPP, DE) said that most of his amendments were focused on orders’ flagging. He explicitly supported the role of ESMA on supervising the short-selling and CDS markets.
Pascal Canfin concluded by saying that the flagging of orders already exists in the US and in Hong Kong and it does not imply such a huge cost for the investor.
Next Steps:
· Vote in ECON committee: 28 of February
· Vote in plenary: April 2011
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