GERMANY: Revised regulation on Germany short selling exemptions published

Tuesday April 29 2014

A new regulation on Germany short selling has been published in the German Federal Gazette (Bundesgesetzblatt).

The revised regulation (Leerverkaufs-Anzeigeverordnung) sets out the details to be provided when notifying the German Federal Financial Supervisory Authority (BaFin) of the intention to use the market making or the primary dealer exemptions under Article 17 of the EU Short Selling Regulation.

Market making

The notification of intent to avail of the market making exemption shall contain the following information:

* the first and last name or company, and country, address, and if available the Bank Identifier Code (BIC) of the notifier,

* the first and last name, phone number, the Fax number and e-mail address of a contact person,

* the status of persons reporting as

a) a credit institution,

b) the investment firm,

c) legal personality of a third country or

d) local firm under Article 2 paragraph 1 letter l Directive   2004/39/EC of the European Parliament and of the Council of 21 April 2004 on Markets in financial instruments

* the marketplace on which the person is a member,

* a detailed description of the current or intended market-making activities in accordance with Article 2, paragraph 1, point k of Regulation (EU)No. 236/2012,

* in case of an existing contractual agreement for provision of market making services: description of the main duties and activities under the contract or a copy of the contract,

* with regard to the financial instruments in respect of which the market-making activity is carried out or to be carried out:

a) shares: International Securities Identification Number (ISIN) and their name,

b) for public debt and credit default swaps on sovereign debt: the name of the issuer of the debt instrument and

c) financial instruments that fall under neither a letter nor under letter b:

aa) the category of financial instrument in accordance with Annex I Section C of Directive 2004/39/EC and

bb) the ISIN and the name of the share to which the financial instrument relates, or an indication of the issuer of sovereign debt referenced in the instrument, and

* The date of intention to avail of the exemption.

Primary dealing

The notification of intent to avail of the primary dealing exemption shall contain the following information:

* the first and last name or business name, country, address, and if available the BIC of the notifier,

* the first and last name, phone number, fax number and e-mail address of a contact person,

* the indication of public issuers for whom the intention to use the exemption will be used, and

* The date of intention to avail of the exemption.

The application must include a copy of the agreement or other recognition of the primary dealer activities of the notifier. The agreement or acknowledgment must be signed by the respective public issuer or a person acting on his behalf.

The forms provided by BaFin must be used for notification – available here. The form is to be submitted by fax and by email. For submissions by email, details of the instruments in which market making an primary dealing activities are to be carried out shall be supplied in CSV format. Forms are no longer required to be submitted by post.

The revised regulation entered into force on 26 April 2014.

Click on the above link for the Regulation (in German).