Introduction to Short Selling Regulations

Regulation (EU) No 236/2012 of the European Parliament and the Council of 14 March 2012 on short selling and certain aspects of credit default swaps (“the Short Selling Regulations”) came into operation on 1 November 2012.

The Short Selling Regulations impose certain notification and disclosure obligations on legal or natural persons who hold

  • Net short positions in shares or
  • Net short positions in sovereign debt or
  • Uncovered positions in sovereign credit default swaps.

Please note ESMA’s decision of 16 March 2020 to temporarily require the holders of net short positions in shares traded on a European Union regulated market to notify the relevant national competent authority if the position reaches or exceeds 0.1% of the issued share capital of the company concerned. The measure is effective immediately. Full details of the measure, including exemptions, are set out in the announcement published by ESMA.

The purpose of the Short Selling Regulations is to

  • Increase transparency of short positions held by investors in certain EU securities
  • Reduce settlement and other risks associated with short selling
  • Create a harmonised framework for coordinated action at the European level.

Within the Central Bank, the Securities and Markets Supervision Division (SMSD) is responsible for administering the functions of the competent authority arising from the Short Selling Regulations. Any queries in relation to the Short Selling Regulations should be addressed to: shortselling@centralbank.ie.

Position holders must register with the Central Bank prior to submitting their first notification required under Articles 5-8 of the Short Selling Regulations. Information on the registration process can be found here.

Information in relation to the application of the Short Selling Regulations is also available here.