ESMA not to extend requirements for short position reporting
The European Securities and Markets Authority (ESMA) today announces that it will not renew its decision to require holders of net short positions in shares traded on a European Union (EU) regulated market, to notify the relevant national competent authority (NCA) if the position reaches, exceeds or falls below 0.1% of the issued share capital.
The measure, which has applied since March 16, 2020, will expire on March 19, 2021.
ESMA explains that GDP forecasts are showing moderate optimism for recovery, volatility is decreasing and the main EU stock indices are close to pre-pandemic levels. Hence, the current situation in financial markets no longer resembles the emergency situation required by the Short Selling Regulation to maintain the measure.
The overall level of net short positions is decreasing across the EU, reducing the risk that selling pressures could initiate or exacerbate potential negative developments connected with the evolution of the pandemic.
The last renewed decision expires on March 19, 2021. Therefore, the last reporting where the lower threshold of 0.1% applies will be in relation to Friday, 19 March 2021, and must be reported to NCAs by 15.30 of Monday 22 March 2021.
From 20 March 2021 onwards, positions holders will need to send notifications only if they reach or exceed the 0.2% threshold again, while any outstanding net short position between 0.1% and 0.2% will not have to be reported.
ESMA, in coordination with NCAs, will continue to monitor developments in financial markets as a result of the COVID-19 pandemic.