EUROPEAN UNION: ESMA Publish Updated Net Short Position Notification Thresholds for Sovereign Issuers

According to Article 7(2) of the Short Selling Regulation, ESMA is required to publish a list of the thresholds applicable to the sovereign issuers for the purpose of the notification to competent authorities of significant net short position in sovereign debt.

Commission Delegated Regulation No 918/2012 (DR) specifies that initial threshold categories shall be:

1. 0.1% applicable where the total amount of outstanding issued sovereign debt is between 0 and 500 billion euros;
2. 0.5% applicable where the total amount of outstanding issued sovereign debt is above 500 billion euros or where there is a liquid futures market for the particular sovereign debt.

The additional incremental levels shall be set at 50% of the initial thresholds. The reporting thresholds shall be monetary amounts fixed by applying the percentage thresholds to the outstanding sovereign debt of the sovereign issuer. They will be revised and updated quarterly to reflect changes in the total amount of outstanding sovereign debt of each sovereign issuer.

An initial net short position disclosure in UK sovereign debt is required at GBP 105bn and at each additional GBP 52bn thereafter.

For a list of reporting thresholds applicable from 01 May 2017 for all jurisdictions, please follow the link at the top of the page.