On 14 June 2010, the European Commission published a consultation document on the options for dealing with short selling. We have reported previously on the CESR report on short selling published in March 2010 (click here for our post). The European Commission consultation draws heavily from that report. The consultation covers:
- – whether the same rules should be applied to every type of traded financial instrument that can be the subject of short selling
- – whether the CESR approach on transparency in relation to short selling should be applied only to EU shares and sovereign bonds, or to all financial instruments traded in the EU
- – whether uncovered (or ‘naked’) short selling should be subject to a condition that the seller has entered into a borrowing agreement
- – whether market making activities should be exempt
- – whether competent authorities in each jurisdiction should have the power to place restrictions on short selling or credit default swaps in an emergency
The consultation is open until 10 July 2010. Click here to read the consultation document.
