In light of current conditions in the financial markets, CONSOB, the Italian banking and securities regulatory body, has extended its ban on short selling of financial sector stocks. Initially adopted on August 12, 2011 and subsequently extended until January 15, 2012, the ban has been further extended to February 24, 2012.
The ban prohibits market participants from taking net short positions or increasing existing net short positions, (
i.e. downward positions, calculated as the difference between sale activities and purchase activities, considering all financial instruments, including derivatives and financial instruments on indexes). The prohibition applies to shares of the banking-insurance sector. This ban mirrors short selling restrictions adopted by regulators in France, Belgium, and Spain.
Also still in force, and without deadline, are other previously adopted restictions:
- the obligation to report to CONSOB relevant downward positions on shares listed in Italy which entered into force on July 10, 2011 (by CONSOB Resolution no. 17862);
- prohibition of uncovered short sales, i.e. sales not supported by the availability of the shares at the moment of the order; the prohibition applies to all shares listed on Italian regulated markets, wherever traded (by CONSOB Resolution no. 17993 of November 11, 2011).
CONSOB reserves the option of further extending these short selling restrictions, making them permanent, or eliminating them altogether depending on changes in market conditions.