Short selling - CONSOB AND ITS ACTIVITIES
Due to the methodology of calculation of net short positions (“NSP”), it is possible that during a rights issue, especially if the operation is highly dilutive, or a POC, SEDA, SEF or similar operations, some “technical” net short positions (“NSP”) are reported to Consob and then published. These technical NSPs do not represent a material NSP because they are supported by long positions in financial instruments which refer to shares yet to be issued (e.g. subscription rights, some warrants or convertible bonds).
When reporting to Consob such “technical” NSPs, investors should indicate in the field “Comment” of the NSP that the position is backed by long positions in instruments which refer to shares yet to be issued.
More information on short selling
From the 1st of November, 2012, the Regulation (EU) no. 236/2012 of the European Parliament and of the Council on short selling and certain aspects of credit default swaps applies.
The Regulation requires holders of net short positions in shares or sovereign debt to notify the Relevant Authority of such positions when they reach, fall below or exceed certain thresholds, no later than 15.30 of the day following the trading day on which the relevant position is held.
For shares, the relevant threshold is set at 0.1% of the share capital of the company concerned and any following change of 0.1%.
The Regulation requires that net short positions in shares equal to 0.5% of the share capital or above have to be disclosed.
Moreover, the Regulation bans uncovered (also called naked) short selling on shares and sovereign bonds, i.e. short selling which is not backed by stock lending or similar measures.
According to the Regulation, competent Authorities may adopt emergency bans to short selling (even if backed by stock lending) or to net short positions, when some conditions are satisfied.
The Regulation introduces an exemption regime for market makers and primary dealers.
Through this section is possible to:
- consult data on net short positions in shares, updated and historical;
- consult the legal framework on short selling;
- register to Consob reporting system on net short positions in shares;
- for those registered, report net short positions in shares;
- consult the user manual of Consob reporting system;
- get information on the exemption for market maker activities in shares;
Any question can be sent to: firstname.lastname@example.org.