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: On 16 March 2020 ESMA issued a decision 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 reached or exceeded 0.1% of the issued share capital of the company concerned.  The measure was imposed initially for three months and was subsequently renewed.  The measure expires on 19 March 2021.   Therefore the last date to which the lower notification threshold of 0.1% applies will be to positions held as at 19 March 2021.  Full details of the measure are set out on ESMA's website.

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 Markets Supervision Division 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.