Market Integrity

The European Securities and Markets Authority (ESMA) has today updated its Questions and Answers (Q&As) on the Short-Selling Regulation (SSR).

The overall SSR Q&A revises a pre-existing answer regarding locate arrangements, further specifying the requirements for ‘easy-to-borrow and purchase’ lists.

The purpose of this Q&A is to promote common supervisory approaches and practices in the application of SSR. It aims at providing investors and other market participants with clarifications on the applicable requirements.

ESMA will periodically review these Q&A and update them where required.

ESMA staff recently participated in Global Financial Markets Association (GFMA) webinar on Legal Entity Identifier (LEI).  

A full video of the webinar can be viewed on ESMA’s YouTube channel or you can download the presentation slides

ESMA staff presented on the topic of LEI requirements under the Markets in Financial Instruments Directive (MiFID II) and the upcoming LEI requirements under other sectoral legislation such as CSDR, SFTR, and Prospectus.

Further information on the LEI is available in ESMA’s latest briefing and the ESMA statement on LEI under MiFID II.

The European Securities and Markets Authority (ESMA) has published today an opinion on the Accepted Market Practice (AMP) notified by the French Autorité des Marchés Financiers (AMF), which replaces the AMP under the Market Abuse Directive (MAD) established in March 2005. 

This AMP refers to liquidity contracts by which a credit institution or an investment firm (financial intermediary) provides quotes at certain French trading venues on behalf of the issuer, with a view to enhancing the liquidity of a particular share and its regular trading.

The regular functioning of this AMP implies that these liquidity contracts should operate according to limits on the resources allocated to them and on the prices and volumes quoted. However, this AMP also foresees that for an initial two-year transitional period both issuers and financial intermediaries may not be bound by those limits in case not defined “market conditions” occur. Contrary to issuers, financial intermediaries are not obliged to disclose publicly when they are operating out of those limits.

Whereas ESMA does not object to the regular functioning of the AMP, it considers that permitting liquidity contracts to operate during the transitional period out of boundaries in terms of resources, price or volume and, in the case of financial intermediaries, without providing transparency to the market, would not meet the requirements set out in MAR.

The proposed AMP also departs from some of the elements specified by ESMA in its Opinion on liquidity contracts, issued in April 2017.

Following the publication by ESMA of the negative opinion, the AMF is expected to make a final decision on the AMP in the near future. According to MAR, in case a national competent authority establishes an AMP contrary to the opinion of ESMA, it shall publish on its website a notice setting out in full its reasons for doing so, including why the AMP does not threaten market confidence.  ​

The public disclosure of net short positions in EU shares influences investors’ behaviour, a recent study by the European Securities and Markets Authority (ESMA) finds

ESMA’s latest Trends, Risks, Vulnerabilities (TRV) Report No. 1, 2018, analysed net short positions reported under the Short-Selling Regulation (SSR).

The SSR data shows that there were 210,341 net short positions reported from January 2013 to December 2016. These net short positions related to over 2,000 European shares, the majority being UK and German securities. The ESMA analysis reveals that around 1,000 different investors are active in EU shares, with the large majority of them being domiciled in the US (40%), the UK (30%), and only 15% in the rest of EU. In addition, short-selling activities appear highly concentrated, with 150 investors accounting for more than 80% of all reported short positions. 

The ESMA study also provides evidence that investors seem to avoid crossing the public disclosure threshold in order to keep their strategy secret. The evidence gathered also indicates that disclosure to the public of significant net short positions might, as a side effect, re-inforce herd behaviour in short-selling activities.


Investors use short sales for directional trading or hedging purposes. Under the SSR, net short positions above 0.5% of a company’s issued share capital are publicly disclosed. Firms must also report to authorities net short positions below that level – when their position is equal to at least 0.2%, and again at each further 0.1%.  

The SSR is intended to reduce, inter alia, settlement risks and other risks linked with uncovered or naked short-selling carried out by investors. The Regulation came into force in 2012 and ESMA, in December 2017, advised the Commission about a possible revision of certain aspects of the SSR. 

The European Securities and Markets Authority (ESMA) has issued today its final Implementing Technical Standards (ITS) regarding the application of Market Abuse Regulation (MAR).

ESMA’s ITS clarify how national competent authorities (NCAs) and ESMA should cooperate with each other as well as with other EU authorities, entities and public bodies in the field of market abuse.

Market abuse can take many forms and concern different markets at the same time. As markets’ integration is increasing further, smooth cooperation between authorities, entities and public bodies is paramount in order to track down on abusive behaviour. Therefore, ESMA’s ITS set out procedures and forms for NCAs and ESMA to facilitate those exchanges of information and assistance.

ESMA submits its ITS today for endorsement to the European Commission, which has three months to do so. Once fully implemented, these ITS will contribute to delivering a regulatory rule-book for securities markets.

The European Securities and Markets Authority (ESMA), in cooperation with national competent authorities (NCAs) in the European Economic Area (EEA), has overseen the launch of the Markets in Financial Instruments Directive II (MiFID II) and the Markets in Financial Instruments Regulation (MIFIR) on Wednesday 3 January.

A key element in ensuring the new regime functions properly is ensuring the availability of data to market participants – firms and trading venues – and NCAs. This data is now available on ESMA’s website and will be continuously updated.