ESMA consults on the evaluation of the short-selling regulation

The European Securities and Markets Authority (ESMA) issues today a public consultation regarding its future technical advice to the European Commission (EC) on the Short-Selling Regulation (SSR). ESMA publishes this consultation paper to seek the views of market participants on the three main elements of its advice to the EC:

• the scope and functioning of the exemption for market making activities;
• the procedure for imposing a short term ban on short-selling in case of a significant fall in price of a financial instrument; and
• the transparency of net short positions, and the related reporting and disclosure requirements.

Steven Maijoor, ESMA Chair, noted: “The Short-Selling Regulation has increased market transparency and helped investors to have a more complete picture of short-selling activity, allowing better informed investment decisions.
ESMA aims to develop proposals for the legal framework which remove inconsistencies and reduce the regulatory burden for firms.”

ESMA will evaluate to what extent the SSR has achieved its original objectives in terms of relevance, effectiveness, coherence, and efficiency. To improve the Regulation, the technical advice will propose potential changes to the legal framework.

In order to prepare its technical advice, ESMA is inviting investors, market participants and any other interested stakeholders to provide responses to the questions outlined in the consultation paper and any other issues they may want to raise.

ESMA expects to deliver its final advice to the EC by 31 December 2017. This technical advice is one of the follow up actions announced by the EC in its Communication on the Call for Evidence on the EU regulatory framework for financial services published on 23 November 2016.

The closing date for responses is 4 September 2017.