The European Securities and Markets Authority (ESMA) is calling for feedback to the European Commissions (EC) proposed regulation on short selling and certain aspects of credit default swaps (SSR).
The EC previously handed a formal mandate to ESMA seeking technical advice on the evaluation of the effects of the SSR. ESMA is asking investors, market participants and any other interested stakeholders to supply feedback by March 15. The authority plans to deliver its technical advice to the EC by May 31.
The ESMA advice will contribute to ECs report on the review of the Short Selling Regulation, which it is obliged to submit to the European Parliament and the European Council by June 30.
The SSR, which has been in application since November 1, is meant to enhance transparency, reduce risks and streamline the regulatory approach to short selling across member states.
The regulation includes that significant net short positions must be notified to regulators above a threshold of 0.2% and to the public if above 0.5%, apart from EU sovereign debt, which must only be notified to the regulator; a locate plus rule for short sales will be introduced requiring that the third party issue a locate confirming that it is reasonable for the investor to expect to be able to cover their short sale; intervention powers are given to national regulators and to ESMA to adopt measures in exceptional situations to mitigate threats to financial stability; and a ban on naked sovereign credit default swaps is introduced.
Click here for ESMA’s call for evidence.
(CG)