On 29 June, the Commission adopted an implementing regulation laying down Implementing Technical Standards which details technical rules on, amongst other things: (1) information on significant net short positions; (2) the requirements for agreements to borrow that ensure settlement of shares can be effected when due; (3) the requirements for arrangements and measures to ensure settlement in due time of short sales of shares; (4) the details of arrangements with third parties relating to short sales of sovereign debt to ensure a reasonable expectation that settlement of the sovereign debt can be effected when due; (5) the types of third parties, including investment firms and central counterparties, and the requirements they must meet to be eligible to enter into arrangements with short sellers to ensure settlement; (6) the format for the periodic information on net short positions and (7) the technical rules for ESMA to determine whether the principal trading venue of a share is inside or outside the EU.
On 29 June the Commission adopted a delegated regulation on Regulatory Technical Standards, based on draft regulatory technical standards submitted by ESMA. This regulation sets out the detail of the information on short positions that must be notified to competent authorities and disclosed to the public. It also specifies what information competent authorities must report on a quarterly basis to ESMA, and the method of calculation of turnover for ESMA to determine the principal trading venue of shares.
On 5 July the Commission adopted a delegated act which specifies the cases in which sovereign CDS are considered covered, and therefore not banned in accordance with the short selling regulation. The delegated act also sets out technical rules on: (1) how to calculate the significant short positions that must be disclosed to regulators or the market; (2) how short positions are calculated and reported by fund managers managing several funds, or different entities within a group; (3) the levels at which short positions in sovereign debt must be notified to regulators; (4) the thresholds for different financial instruments, ranging from illiquid shares to financial derivatives, which can trigger a short term suspension of short selling by regulators; (5) the decline in liquidity which triggers the possibility for Member States to suspend restrictions on uncovered short sales of sovereign debt; and (6) the criteria to be taken into account when determining what constitutes an adverse development or event.
On 5 July the Commission also adopted a delegated regulation on Regulatory Technical Standards, based on draft regulatory technical standards submitted by ESMA. This sets out the technical details of how to calculate the significant fall in value which can trigger a short term suspension of short selling in certain financial instruments.