COVID-19

The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has today launched a consultation, as part of the post-Covid MiFID II Recovery Package, seeking input from market participants on its draft Technical Standards for commodity derivatives.

ESMA’s proposals relating to the application of position limits to commodity derivatives focus on:

  • developing procedures for financial entities undertaking hedging activities and for liquidity providers to apply for an exemption from position limits; and
  • suggesting other technical adjustments to improve the application of the position limit regime in practice.

In addition, the Consultation Paper also contains ESMA’s proposals for technical standards on position management controls.

The consultation forms part of ESMA’s mandates under of the MiFID II Recovery Package, a set of measures aimed at supporting the recovery from the severe economic shock caused by the Covid-19 pandemic.

Next steps

The consultation closes on 23 July 2021, following which ESMA will consider the responses received, finalise the draft technical standards and submit a final report to the European Commission for endorsement by November 2021.

 

Further information:

Dan Nacu-Manole

Communications Officer

   +33 (0)1 58 36 52 06

@   press@esma.europa.eu

 

Consultation Paper - Technical standards for commodity derivatives - MiFIDII Recovery Package

The European Securities and Markets Authority (ESMA), as part of the post-Covid MiFID II Recovery Package, is seeking input from market participants on its draft Technical Standards for commodity derivatives.

Responding to this paper

ESMA invites comments on all matters in this paper and in particular on the specific questions summarised in Annex 1. Comments are most helpful if they:

The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, recommends to the European Commission (EC) to permanently lower the threshold to notify net short positions on shares to national competent authorities (NCAs) from 0.2% to 0.1%.

ESMA has examined the evidence gathered after its successive emergency decisions, beginning in March 2020, which lowered, for the first time, the notification threshold to 0.1% on a temporary basis.

The analysis showed that a substantial amount of additional and essential information became available to NCAs due to the reporting of net short positions at the level of 0.1%. This additional transparency to NCAs of the real level of net short positions established in the market translates into an improved ability by NCAs to conduct market oversight. ESMA therefore considers it essential to lower the reporting threshold to 0.1% on a permanent basis.

Next steps

The EC may adopt a delegated act modifying the notification threshold in Article 5(2) of the Short Selling Regulation.

 

Further information:

Dan Nacu-Manole

Communications Officer

   +33 (0)1 58 36 52 06

@   press@esma.europa.eu

The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has decided not to 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 16 March 2020, will expire on 19 March 2021.

ESMA’s view is that with GDP forecasts showing moderate optimism for recovery, volatility decreasing and the main EU stock indices close to pre-pandemic levels, 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 19 March 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.

The EFTA Surveillance Authority, in cooperation with ESMA, has also decided not to renew their current measure applicable to EEA EFTA States' markets, that will therefore also expire on 19 March 2021.

The decision requiring net short position holders to report positions of 0.1% and above was first introduced on 16 March 2020 and was renewed in June 2020, September 2020 and December 2020.

Next steps

ESMA, in coordination with NCAs, will continue to monitor developments in financial markets as a result of the COVID-19 pandemic, and is prepared to use its powers to ensure the orderly functioning of markets, financial stability and investor protection.

 

Further information:

Dan Nacu-Manole

Communications Officer

   +33 (0)1 58 36 52 06

@   press@esma.europa.eu

The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has renewed its decision to temporarily require the 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 applies from 19 December 2020 for a period of three months.

While overall financial markets performance registered recent improvements linked to the positive news on vaccines, the COVID-19 pandemic continues to have serious adverse effects on the EU real economy with any outlook for a future recovery remaining uncertain. A forecast from the European Commission and the information on the risk of decoupling between asset valuations and fundamentals, in ESMA’s Risk Dashboard, have been used for the economic analysis supporting the decision.

Today’s action extends the measure taken on 17 September and will expire on 19 March 2021. ESMA believes that this decision will continue to support the ability of NCAs to deal with threats to the orderly functioning of markets and financial stability at an early stage.

The temporary transparency obligations apply to any natural or legal person, irrespective of their country of residence. They do not apply to shares admitted to trading on a regulated market where the principal venue for the trading of the shares is located in a third country, market making or stabilisation activities. See the relevant ESMA register here.

The EFTA Surveillance Authority, in cooperation with ESMA, adopted a corresponding decision today, also effective as of 19 December, applicable to EEA EFTA States' markets.

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