The objection period in relation to the Commission Delegated Regulation of 27 September 2021 amending Regulation (EU) No 236/2012 of the European Parliament and of the Council as regards the adjustment of the relevant threshold for the notification of significant net short positions in shares expired on 27 December 2021.
The threshold for the notification of significant net short position in shares to the competent authorities is thereby permanently adjusted from 0.2% to 0.1%. This reporting requirement affects shares traded on a European Union regulated market with the generally existing reporting threshold remaining at the reduced level of 0.1% of the issued share capital. The reporting threshold does not apply for shares, whose principle venue for trading is in a third country outside the European Union, as well as for market making or stabilisation activities. This transparency measure applies to every natural or legal person, irrespective of whether their country of residence being inside or outside of the European Union. Positions are required to be reported to the competent national supervisory authority – the FMA in the case of the Vienna Stock Exchange (Wiener Börse). Positions that already exist above the new threshold level of 0.1 % are required to be notified when the delegated act becomes applicable. ESMA will publish more detailed information regarding how net short positions are required to be notified when the threshold is adjusted to 0.1% in a harmonised opinion. The Regulation will become applicable on the 20th day following that of its publication in the Official Journal of the European Union.
Protecting Investors and Financial Market Stability
Instability occurring as a result of the global outbreak of COVID-19 led to regulatory authorities and ESMA on several occasions making use of extraordinary measures with regard to short selling, with the risk of retail investors being caught up in short squeezes duly increasing. This made it apparent how important it is to collection addition information about significant net short positions in shares on a permanent basis, since such information proves decisive for marketing monitoring purposes. Furthermore, the Commission is of the opinion that uncertainties regarding statutory reporting obligations must be avoided, and that stability should be guaranteed in the regulations and obligations in this regard. The best opportunity to achieve stability and planning security would emerge by permanently reducing the notification threshold to 0.1 %. Such an approach is a lot clearer than defining the threshold on a temporary basis that is also bound with uncertainty, as the potential expiry date gets closer.
Journalists may address further enquiries to:
Annemarie Bauer
Tel.: +43/(0)1/24959-6007