ESMA Guidelines and Recommendations

ESMA issues negative opinion on extending Greek short selling ban

ESMA Guidelines and Recommendations

Date: 23 February 2016

On 11 January 2016, the European Securities and Markets Authority (ESMA) issued a negative opinion on a proposed extension of the emergency short selling prohibition, regarding Attica Bank S.A. (ISIN GRS001003011), proposed by the Hellenic Capital Market Commission (HCMC).

The HCMC had proposed extending the current prohibition on short sales in any shares of Attica Bank admitted to trading on the Athens Exchange, irrespective of the venue where the transaction is executed, which expires at 24:00:00 (CET), the 11 January 2016.

The temporary prohibition included sales of shares covered by subsequent intraday purchases and applied to all depository receipts (ADRs, GDRs) and warrants representing shares of Attica Bank admitted to trading on the Athens Exchange. The short selling measure applies to any natural or legal person, irrespective of their country of residence, but would be subject to the exemption for market making activities, provided that short selling transactions are conducted for hedging purposes.

ESMA considers that adverse developments that had constituted a serious threat to market confidence in the Greek market have eased and therefore the proposed prolongation of the ban would not be appropriate or proportionate.

If the HCMC decides to renew the emergency short selling prohibition contrary to ESMA’s opinion, the HCMC would have to publish their reasons for doing so within 24 hours.