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The AMF started a consultation on a set of measures intended to regulate short-selling in normal market conditions.
The measures proposed consist of:
- considering that it is neither realistic nor advisable to attempt to ban short-selling systematically, but that the practice should be regulated; in particular, any person placing an order for a short-sale must make the necessary arrangements to be able to deliver the securities within the standard settlement cycle (T+3);
- imposing stricter penalties than currently, on sellers unable to make timely delivery;
- ensuring a transparent market by publishing net short positions exceeding a defined threshold such as 0.25% of the capital of a listed company; as a supplemental measure, investors could be required to inform their intermediary whether the order they are placing is for a short-sale, thus allowing the regulator to disseminate aggregate information to the market;
- requiring that short-sellers declare to the regulator the volumes and prices of securities loans, so that the regulator is alerted in good time to possible pressures in the securities lending market.
Deadline for responses is 10 April 2009.
Report (French only)