EUROPE: ESMA Publishes the Draft Technical Standards on EU Short Selling

Monday April 2 2012

Regulation (EU) No 236/2012 of the European Parliament and of the Council of 14 March on EU short selling and certain aspects of credit default swaps requires ESMA to develop draft regulatory (RTS) and implementing technical standards (ITS) in relation to several provisions contained in Articles 9, 11, 12 and 16 of the Regulation.

The draft regulatory technical standards cover the following:

– Details of the information on net short positions to be notified and disclosed;

– Details to be supplied to ESMA on net short positions by competent authorities;

– Method of calculation of turnover to determine the principal trading venue for a share.

A draft standard form is attached to the standards as an annex.

The draft implementing technical standards concern:

– The means for public disclosure of significant net short positions in shares;

– Format of the information to be provided to ESMA by competent authorities regarding net short positions;

– Agreements, arrangements and measures to adequately ensure availability for settlement;

– Determination of the principal trading venue for an Article 16 exemption A draft form for public disclosure is attached as an annex.

The draft RTS and ITS were submitted to the European Commission by 31 March 2012. The Commission has three months to decide whether to endorse ESMAs draft technical standards. A further regulatory technical standard, on the method of calculation of the fall in value of a financial instrument required under Article 24(8) of the Regulation will be submitted together with the technical advice in the course of April 2012.

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