The CNMV has agreed ban for a month carrying out operations on securities and financial instruments that involve the constitution or increase of net short positions on shares admitted to trading in Spanish trading centers (Stock Exchanges and Alternative Stock Market, MAB) for which the CNMV is the competent authority .
The ban takes effect from tomorrow, March 17, until April 17, 2020, both dates included, and may be extended for additional periods not exceeding 3 months if the circumstances that motivated it were maintained, in accordance with article 24 of Regulation (EU) No 236/2012, or to be lifted at any time without exhausting the term, if deemed necessary.
The decision, which has been notified to ESMA as provided in the aforementioned Regulation, has been made due to the extremely volatile situation that the European stock markets, including the Spanish ones, are going through, its evolution in the context of the situation created by the COVID-19 virus and the risk that disorderly price movements may occur in the coming weeks. Another factor that has been considered has been the implications of the declaration in Spain of the state of alarm last Saturday, March 14.
Prohibition affects any stock or index related transaction, including cash operations, derivatives in organized markets or OTC derivatives, which involves creating a net short position or increasing a pre-existing one, even if it is intraday. Net short positions for the purposes of the prohibition are understood to be those defined in article 3.1 of the aforementioned Regulation (EU) No 236/2012. These positions include short sales even if they are covered by a securities loan.
The following operations are excluded from the scope of the prohibition: market creation activities in the terms provided in the aforementioned European Regulation (articles 2.1.k and 17). The creation or increase of net short positions when the investor who acquires a convertible bond has a neutral position in terms of delta between the position in the variable income element of the convertible bond and the short position taken to cover said element.
The creation or increase of net short positions is also excluded when the creation or increase of the short position in shares is covered by an equivalent purchase in terms of the proportion of subscription rights. By last, the creation or increase of net short positions through index financial derivative instruments or baskets of financial instruments that do not consist mainly of securities affected by the ban.
This decision comes after last Thursday they decided to ban the short selling on shares of 69 companies after the falls registered in the stock markets due to the incidence of the new coronavirus pandemic. during a single session.
This measure was very well received in the market, the Ibex closed with a rise of 3.74% after having registered the biggest drop in its history on Thursday. In the weekly set it decreased more than 20%.
. (tagsToTranslate) CNMV (t) temporarily prohibits (t) (t) increment (t) short positions (t) (t) listed (t) Category: All (t) Category: Market Report (t) Category: Pulses (t ) mostread_ultimas (t) mostread_fundsnews (t) mostread_mercados