Friday, September 24, 2021

Reddit Trading and Resilience in U.S. Equity Finance

Part 4. ESMA expands short sale disclosures and rules for borrower locates

Author: Ed Blount

Paris, September 24, 2021 - The next shoe has fallen in reaction to the January 2021 GameStop short squeeze, by which certain online brokers interpreted clearinghouse rules to necessitate suspension of their retail customers’ ability to buy “meme stocks." Today, the European Securities Markets Authority (ESMA), citing SEC and EU data for January 2021 on suspiciously high levels of failed meme stock settlements, asked for public comment on rule changes to avoid future short squeezes. This ESMA consultation on systemic risk management will surely propel industry leaders to advance their previously-announced plans for a block-chained securities market infrastructure, so as to add even more robust operating and disclosure protocols.

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Thursday, June 6, 2013

EU Court to Hear Britain's Challenge to ESMA Powers Over Short Selling

Author: David Schwartz
The Court of Justice of the EU (CJEU) has announced that it will hear a challenge to EU short selling regulations on June 11, 2013. Britain's finance ministry filed the legal challenge in June of 2012 against the European Union in an effort to limit the European financial regulators' power to ban short-selling. Britain's lawsuit seeks to clarify the powers granted to the European Securities and Markets Authority to halt or limit short selling across the 27-member EU nations in the event of a crisis.
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Monday, October 29, 2012

EU Members Tinker With Short-Selling Bans, But to What Effect?

Author: David Schwartz
On October 19, 2012, Spain’s financial regulator the CNMV announced that it would extend its ban on short selling until October 31 and has also submitted a proposal to the European Securities and Markets Authority (ESMA) to impose a further three month ban, effective November 1, 2012.  Spain's action on short selling is just the latest in a recent series of steps taking by EU members intended to deal with individual members' banking and financial woes.  On September 14, Italy's regulator Consob lifted that country's short selling ban on banking and insurance stocks introduced in July.  In July, Greece’s Capital Market Commission extended its short-selling ban, which has been in place since August 2011, to October 31, 2012, extending the ban again last week to January 31, 2012.  Decisions to extend short selling bans by countries like Spain and Greece may not be as effective as hoped, however.  Such decisions may only exacerbate financial fears, rather than allay them. This is because short selling bans may be read by some as more politically motivated than financially necessary, and can, even if unintentionally, signal a crisis of confidence with respect to these key economies just at the point they are restructuring their banking systems to make them more sound and resilient.
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Monday, January 30, 2012

Italian Regulator Extends Financial Sector Short Selling Ban

Author: David Schwartz
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.
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