Spanish securities regulator CNMV has lifted its ban on short selling.
Spain initially introduced a ban on short selling in August 2011 following a recommendation by the European Securities and Markets Authority (ESMA) that Eurozone countries ban the practice. At the time, Spain, France, Belgium and Italy heeded the recommendation; Greece and Turkey already had instituted temporary bans.
In June, the CNMV admitted that the short-selling ban in fact had a detrimental effect on its markets. Despite that, the Spanish regulator several times extended its temporary ban, the latest of which it let expire January 31.
Since the financial crisis, countries around the globe have been instating temporary bans on the practice when stock markets appear particularly tumultuous, such as during the recent volatility in Europe.
(CG)