EUROPE: EC Consults on Adjustment of Threshold for Notification of Significant Net Short Positions

Friday July 16 2021

The European Commission (EC) has published a consultation on adjusting the threshold for notifications of net short positions.

The EC agrees with ESMA’s opinion that the lower notification threshold would significantly improve transparency and monitoring of significant net short positions in shares at individual, sectorial and market-wide level, resulting in an increase in regulatory efficiency.

ESMA also considered that marginal costs for implementation by market participants should be negligible, considering that they have been applying such threshold for several months.

Therefore, the EC believes that that it is appropriate to amend the current relevant notification threshold and set it permanently at 0.1%. In turn, it has put forward the following amendments to Regulation (EU) No 236/2012:

In Article 5 of Regulation (EU) No 236/2012, paragraph 2 is replaced by the following:

‘2. A relevant notification threshold is a percentage that equals 0,1 % of the issued share capital of the company concerned and each 0,1 % above that.’.

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