Short selling – Basic information

On 14 March 2012 the European Parliament and the Council adopted the Regulation (EU) No 236/2012 on short selling and certain aspects of credit default swaps (hereinafter referred to as “Regulation”) and it was published in the Official Journal of the European Union on 24 March 2012. This Regulation entered into force on the day following its publication in the Official Journal of the European Union. This Regulation is binding in its entirety and directly applicable in all Member States. The Regulation applies from 1 November 2012.

The regulation is aimed at harmonising rules for short selling and certain aspects of credit default swaps. It introduces common EU transparency requirements and harmonises the powers that national regulators (competent authorities) may use in exceptional situations where there is a serious threat to financial stability and market confidence. In such situations the regulators gain clear powers to restrict or ban short selling. This Regulation inter alia also requires investors (natural persons and legal persons) to provide notifications of net short positions in shares and sovereign debt to the competent authorities (for more information see section Notification).