EUROPE: ESMA issues official opinion on emergency Greek short selling ban

Monday June 29 2015

ESMA issued today its official opinion agreeing to a seven-day emergency short selling prohibition proposed by the Hellenic Capital Market Commission (HCMC). This short selling ban was issued by HCMC who gave notification to ESMA of its intention to make use of its powers in exceptional circumstances by introducing this emergency measure.

ESMA’s opinion is required by Article 27(2) of Regulation (EU) No 236/2012 of the European Parliament and of the Council of 14 March 2012 on short selling and aspects of credit default swaps (the Regulation). ESMA is legally bound to issue an opinion on whether it considers the measure or proposed measure necessary to address the exceptional circumstances.

In essence, ESMA’s opinion is as follows:

• ESMA agrees that adverse developments constituting a serious threat to Greek market confidence have arisen;
• ESMA considers the HCMC’s short selling ban to be appropriate and proportionate to address the issue;
• Finally, ESMA agrees that the duration of the measure is apposite with the provision that the ban can be reversed if the situation improves.

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