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

Friday August 4 2017

According to Article 7(2) of the Short Selling Regulation, ESMA has 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.

On 1^st August 2017, ESMA updated the sovereign issuer notification list.

The way these notification thresholds are defined is further specified in the Commission Delegated Regulation No 918/2012 (the “DR”). The 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.

The table of thresholds contains the name of the sovereign issuer, the amount of outstanding debt duration adjusted, the initial threshold amount and the relevant percentage, the incremental threshold amount and the relevant percentage.

Click here for net short position notification thresholds for sovereign issuers.

Click on the above link for further details.