GREECE: HCMC reminder to investors on Greece short selling rules in relation to share capital increases

Wednesday May 7 2014

The Hellenic Capital Market Commission has issued a press release to remind investors of the application of Greece short selling rules in the event of a company’s share capital increase.

According to the preamble of the Implementing Regulation (EU) No 827/2012 of 29 June 2012, which complements and refines Regulation (EU) No 236/2012 of the European Parliament and of the Council on Short Selling and certain aspects of credit default swaps:

“The use of rights to subscribe for new shares in relation to a short sale may adequately ensure availability for settlement only where the arrangement is such that settlement of the short sale is ensured when it is due. Therefore, it is essential to specify rules to ensure that the shares resulting from the subscription rights are available on or before the settlement date and in a quantity at least equivalent to the number of shares intended to be sold short.”

Per Article 5 para 1 of the Implementing Regulation, “an agreement to borrow or other enforceable claim referred to in Article 12(1)(b) and Article 13(1)(b) of Regulation (EU) No 236/2012 shall be made by means of the following types of agreement, contract or claim which are legally binding for the duration of the short sale:

[…]

(e) agreements relating to subscription rights: agreements relating to subscription rights where the natural or legal person is in possession of rights to subscribe for new shares of the same issuer and of the same class and covering at least the number of shares proposed to be sold short provided that the natural or legal person is entitled to receive the shares on or before settlement of the short sale.”

The Hellenic Capital Market Commission draws the attention of investors to the fact that, in accordance with Eurobank’s prospectus on its share capital increase, the timing of the Tender Offer is characterized as “expected”.

The SEC warns and assures investors that under the powers provided for by the applicable legislation (Law 4141/2013), it will conduct a thorough audit of the transactions related to the above and in the event of infringements will impose appropriate sanctions.

Click on the above link for more details (in Greek).