October 27, 2020

Volume X, Number 301

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October 27, 2020

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October 26, 2020

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ESMA Renews 0.1 percent Reporting Requirement of Net Short Positions in EU Issuers

On September 17, the European Securities and Markets Authority (ESMA) renewed its decision (ESMA70-155-11072) to temporarily require holders of net short positions in shares traded on a European Union- (EU) regulated market to report to the relevant EU financial regulator at a reduced threshold of 0.1 percent net short (instead of the pre-existing threshold of 0.2 percent net short). The measure will take effect starting September 18 for a period of three months.

In ESMA’s decision notice, it comments that EU Financial Markets have partially recovered since the early days of the COVID-19 outbreak; however, ESMA continues to monitor the situation (which remains unpredictable, particularly in the context of a possible second wave of COVID-19 infections). The renewal of the 0.1 percent reporting threshold is intended to sustain the capacity of EU regulators to manage threats to market integrity and the orderly functioning of markets and financial stability at an early stage, allowing them and ESMA to address such threats in case of signs of exacerbated market stress.

Subsequently, net short positions of 0.1 percent and above held until December 18 are to be disclosed to the relevant EU financial regulator(s), no later than 9:30 a.m. (ET) on December 19 (i.e., T+1).

The ESMA decision of June 11 is available here.

The ESMA decision of September 16 is available here.

The EFTA decision of September 17 is available here.

The ESMA Register of Exempted Shares under Short Selling Legal Framework is available here.

©2020 Katten Muchin Rosenman LLPNational Law Review, Volume X, Number 262
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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...

+44 0 20 7776 7625
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.

+44 0 20 7776 7629
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...

44-0-20-7776-7666
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