Greek regulator the Hellenic Capital Markets Commission (HCMC) has extended the country's ban on short selling to July 31.
The ban is on credit institutions traded on the Athens Exchange, namely Alpha Bank, Attica Bank, National Bank of Greece, Eurobank, Piraeus Bank and Cyprus Popular Bank. The ban extends to trades on exchange, over the counter or by multilateral trading facility.
The prohibition on short selling includes sales covered by subsequent intraday purchases, depositary receipts, warrants and derivatives.
In a statement regarding the extension of the ban, the European Securities Market Authority (ESMA) wrote: "HCMC indicated that the adverse situations or circumstances leading to the introduction of the temporary prohibition in February have been persisting in the Greek banking sector. They continue to constitute a serious threat to the financial stability of, and confidence in, the financial market in Greece. The necessary process of bank recapitalization and restructuring is to date not completed and remains fragile, thus creating market uncertainties. Unusually high volatility associated with the potential substantial selling pressures to arise could cause significant downward spirals in any financial instrument related to these credit institutions and would jeopardize this process which is essential to the overall stabilization of the Greek economy."
A ban on short selling in Greece was first introduced in August 2011 when the Greek economy began to deteriorate.