EUROPEAN UNION: ESMA issues opinion on HCMC renewal of emergency measure

Tuesday July 21 2015

The European Securities and Markets Authority have issued their official opinion on the decision of the Hellenic Capital Market Commission (HCMC) to extend a short selling ban.

According to Article 72(2) of Regulation (EU) No 236/2012 of the European Parliament and of the Council of 14 March 2012 on short selling and certain aspects of credit default swaps, ESMA shall within 24 hours of notification having been made by a competent authority under Article 26 of the Regulation issue an opinion on whether it considers the measure or proposed measure necessary to address the exceptional circumstances.

ESMA is adopting the following opinion on the notified measure, on the basis of Article 27(2) of Regulation 236/2012 on short selling and certain aspects of credit default swaps:

On the adverse events or developments: ESMA considers that adverse developments which constitute a serious threat to market confidence in the Greek market still persist. Despite the partial reopening of credit institutions on 20 July 2015, the situation of fragility in the financial system and in the broader Greek economy persists.

On the appropriateness and proportionality of the measure: ESMA considers that the measure is appropriate and proportionate to address the threats that persist in the Hellenic Republic. Allowing short positions to be built at this stage could exacerbate the threats to financial stability, especially as regards the financial sector.

On the duration of the measure: ESMA considers that the duration of the measure is justified. ESMA appreciates HCMC’s statement in its notification of intent that the measure may be lifted before the end of the established period or renewed in accordance with the provisions of Regulation (EU) No 236/2012 if circumstances that justified the imposition of the measure improve, persist or worsen.

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