ESMA issues positive opinion on short selling ban by Italian CONSOB

17/03/2020

The European Securities and Markets Authority (ESMA) has issued an official opinion agreeing to an emergency short selling prohibition, for a period of three months, by the Commissione Nazionale per le Società e la Borsa (CONSOB) on all transactions which might constitute or increase net short positions on all shares traded on the Italian MTA regulated market, for which CONSOB is the relevant competent authority as well as to all related instruments relevant for the calculation of the net short position.

The ban applies to transactions executed both on a trading venue or over the counter. The measure applies to any natural or legal person domiciled or established within the European Union or in a third country

The proposed measure is expected to enter into force on 18 March 2020 before the opening of the trading session and to expire after the close of the trading session on 18 June 2020. The proposed measure may also be lifted before the deadline, taking into account market conditions.

The measure does not apply to market-making activities, trading in index-related instruments or short positions entered into to hedge positions on convertible bond or subscription rights.

ESMA considers that the proposed measure is justified by the adverse events or developments which constitute a serious threat to market confidence and financial stability in Italy and that it is appropriate and proportionate to address the existing threat to market confidence in the Italian market.

 

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