Article 8(3) of the DR states that “provided always that they are highly correlated in accordance with Article 3(5) of the Regulation and with paragraphs 4 and 5, all net holdings of sovereign debt of a sovereign issuer which is highly correlated with the pricing of the sovereign debt in any short position shall be included in the calculation of the long position”. Does the use of the language “shall be” imply that it is a mandatory requirement to net long positions in sovereign debt of one Member State which are “highly correlated” with a short position in another Member State?

The Regulation defines the “issued share capital” as “total of ordinary and any preference shares issued by the company”. It is correct to suppose that the scope of this Regulation does not include shares that do not give to the stockholder any right to vote (so called saving shares)?

To what extent are instruments which give claims to shares not yet issued (subscription rights, convertible bonds) taken into account in the calculation of a net short position?

In order for any non-EEA entity to be able to use the market making activities exemption as defined in the Regulation, the market in its home jurisdiction should be subject to a legal and supervisory regime which is equivalent to the MiFID, MAD and Transparency directive and should be declared “equivalent”. Has such a determination of “equivalence” already taken place? Will non-EEA entities be able to use the exemption for their market making activities under the Regulation in time for 1 November, 2012?

A replacement trade is a practice used in compression service for CDS. They aims partially terminate a CDS and subsequently replace with new swap corresponding in economic terms with the trades they replace. With respect to sovereign CDS concluded before 25 March 2012, are replacement trades on these CDS deemed to fall under the transitional measures set out in Art 46(2) of the Regulation (sovereign CDS concluded before 25 March 2012 may be held until the maturity date of the contract even if such CDS result in an uncovered position)? Or should such replacement trades be subject to Article 14 of the Regulation (restriction to enter into an uncovered CDS)?