Short Selling Restrictions Update
March 25th | 2020
More jurisdictions are curtailing short selling and short positions in the wake of the market’s recent volatility. We’ve detailed some of these in prior posts, which we’ve repeated below but tagged the new items for easier reference.
UPDATED 03/24 - ESMA has issued its opinion supporting the short sale and short position ban, affecting shares listed on the Vienna Stock Exchange, proposed by the Austrian Finanzmarktaufsicht (FMA) from March 18 – April 20, 2020.
UPDATED 03/23 - The Securities Commission Malaysia and Bursa Malaysia Berhad have temporarily banned short selling from March 23 – April 30, 2020. The ban applied to intraday short-selling (IDSS) and regulated short-selling (RSS),as well as intraday short-selling by proprietary day traders. It does not, however, apply to permitted short-selling (PSS).
Greece the Hellenic Capital Market Commission (HCMC) has banned short selling and increases in net short positions in shares trading on the Athens Stock Exchange from March 18 – April 24, 2020.
o The ban applies to index-related instruments only if the shares represent more than 20% of the index weight.
The ban does not apply to the activity of market making.
German Federal Financial Supervisory Authority (BaFin) has clarified the scope of the short selling bans introduced in March 2020 by several European national authorities. As stated by BaFin the short selling bans do not apply to derivatives on the Euro STOXX 50, STOXX Europe 600, MSCI Europe, MSCI EMU and Euro STOXX® Banks.
Spain has followed Italy by first enacting one-day bans of short in certain stocks, followed by a one-month ban (with an option to extend it two more months) on creation or increase of net short positions
One day short sale ban for March 17, 2020
All of the EU – holders of net short positions in shares traded on a European Union (EU) regulated market must notify the relevant national competent authority (NCA) if the position reaches or exceeds 0.1% (the previous threshold was 0.2%)
South Korea – All short-selling in the stock market banned for six months, from March 16 to September 15, 2020.