Short Selling

The purpose of this consultation is to seek comments on the technical advice that ESMA proposes to give to the European Commission on a number of possible delegated acts concerning the Regulation as listed in the Commission request for advice. These delegated acts should then be adopted in accordance with Article 290 of the Treaty of the Functioning of the European Union (TFEU).

The Alternative Investment Management Association (AIMA), the global hedge fund association, has responded to the temporary short selling bans introduced by France, Italy, Belgium and Spain.

 AIMA ceo Andrew Baker said: “We do not think these bans will help the current market situation. Past experience has shown that bans on short selling do not prevent market falls and indeed can exacerbate volatility. Independent academic research also supports this conclusion. 

The Financial Services and Markets Authority (FSMA) modifies the rules governing short selling of financial shares. The decision to do so was taken after consultation with the other members of ESMA, the European Securities and Markets Authority .

One of the aims of the measure is to limit the possibility of making a profit by disseminating misleading information. The measure also ensures a uniform approach to this matter, given the close inter-linkage between some European financial markets.

ESMA today published a statement on the harmonised action by national competent authorities on short-selling.

European financial markets have been very volatile over recent weeks. The developments have raised concerns for securities markets regulators across the European Union. ESMA has been actively monitoring the markets over the last few weeks and has been exchanging information with national competent authorities on the functioning of the markets and the market infrastructure.

Economic and monetary affairs 

Three proposals making derivatives trading less fragile, reducing speculative practices linked to short selling and reducing the time for the setting up of investor compensation schemes received Parliament's backing on Tuesday ahead of negotiations with Member States.

The Alternative Investment Management Association (AIMA) – the global hedge fund industry association – says the proposals on short selling and over-the-counter (OTC) derivatives published today by the European Commission could help remove uncertainty and confusion in the market.

The European Commission today adopted a proposal for a regulation on short selling and certain aspects of Credit Default Swaps (CDS). Its main objectives are to create a harmonised framework for coordinated action at European level, increase transparency and reduce risks. The new framework will mean regulators – national and European - have clear powers to act when necessary, whilst preventing market fragmentation and ensuring the smooth functioning of the internal market.

Jean-Paul Gauzès, EPP Group Spokesman on Economic and Monetary Affairs

The EPP Group in the European Parliament has welcomed the proposals by the European Commissioner for Internal Market and Services, Michel Barnier, on the regulation of derivatives and short-selling.