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ESMA Publishes Statement on the End of Short Selling Bans by Certain EU Financial Regulators

On May 18, the European Securities and Markets Authority (ESMA) published a statement regarding the non-renewal and termination of the short selling bans imposed by certain EU financial regulators (the Statement).

As a result of the impact of the COVID-19 pandemic on EU financial markets, the Austrian Finanzmarktaufsicht (FMA), the Belgian Financial Securities and Markets Authority (FSMA), the French Autorité des Marchés Financiers (AMF), the Greek Hellenic Capital Market Commission (HCMC), the Spanish Comisión Nacional del Mercado de Valores (CNMV) and the Italian Commissione Nazionale per le Società e la Borsa (CONSOB) introduced bans on short selling from the middle of March 2020.

In the Statement, ESMA notes that the Austrian FMA, Belgian FSMA, French AMF, Greek HCMC and Spanish CNMV chose not to renew their emergency restrictions on short selling, and that the Italian CONSOB decided to preemptively terminate its equivalent emergency restrictions (which were otherwise due to expire on June 18, 2020). All such short selling measures therefore expired at midnight on May 18, 2020.

Despite the end of the various short selling bans, holders (anywhere in the world) of net short positions in shares admitted to trading on an EU regulated market must continue to notify the relevant EU financial regulator if their net short position is equal to or greater than 0.1 percent of the issued share capital of the relevant EU company.  For further information on this requirement, please see the March 20, 2020 edition of Corporate & Financial Weekly Digest.

The Statement is available here.

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About this Author

Carolyn H. Jackson, International Attorney, Katten Muchin law firm
Partner

Carolyn Jackson is a partner in Katten Muchin Rosenman UK LLP and is a Registered Foreign Lawyer. She provides US financial regulatory legal advice to a broad range of market participants, including commercial banks, investment banks, investment managers, broker-dealers, electronic trading platforms, clearinghouses, trade associations and over-the-counter derivatives service providers.

Carolyn guides clients in the structuring and offering of complex securities, commodities and derivatives transactions and in complying with US securities and commodities laws...

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Nathaniel Lalone, Katten Muchin Law Firm, Financial Institutions Attorney
Senior Associate

Nathaniel Lalone, a partner at Katten Muchin Rosenman UK LLP, has a broad range of experience in the regulation of financial products and financial markets, and frequently provides regulatory and compliance advice to trading venues, clearing houses and buy-side firms active in the over-the-counter (OTC) derivatives, futures and securities markets. He is actively involved in advising clients on the implementation of MiFID 2 and MiFIR in the European Union as well as the international reach of US financial services regulation. He also has significant experience with structuring and documentation relating to OTC derivatives and structured products.

Prior to joining Katten, Nathaniel was a member of the US Regulatory and the Derivatives and Structured Finance practices at Allen & Overy LLP.

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Neil Robson, private equity fund managers counselor, Katten Law Firm, London
Partner

Neil Robson, a regulatory and compliance partner with Katten Muchin Rosenman LLP, focuses his practice on counseling hedge and private equity fund managers and other investment advisers on operational, regulatory and compliance issues. He regularly addresses Financial Conduct Authority (FCA) and EU authorization and compliance under both the EU Alternative Investment Fund Managers Directive (AIFM Directive) and MiFID, cross-border issues in the financial services sector, market abuse, anti-money laundering and regulatory capital requirements, formations and buyouts of...

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