Short-selling: an overview of European measures

Since midnight on Thursday 18 September, regulators throughout Europe have taken action in respect of the short-selling of shares in financial companies, as an interim measure to protect the fundamental integrity and quality of markets, and to guard against further instability in the financial sector. 

CESR, in its role as a network bringing together EU securities regulators, played an active role in co-ordinating the regulatory actions by its Members in relation to short selling practices. 

Herbert Smith LLP, in association with Gleiss Lutz and Stibbe, and with the assistance of Cuatrecasas and Gianni, Origoni,  Grippo & Partners, have prepared a schedule which summarises the position in Belgium, France, Germany, Italy, Ireland, Luxembourg, the Netherlands, Spain, Switzerland and the UK.

 

Regulators in the US, Canada, Australia, India, Taiwan, and Dubai have also taken action in response to the crisis. 

On a related point, tomorrow the European parliament is expected to vote in favour of proposals made in a report on Hedge funds and private equity  which advocates amongst other things greater transparency in relation to:

  • general investment strategy and fee policy

  • /debt exposure, risk-management system and portfolio valuation methods,

  • source and amount of funds raised, including internally

  • full transparency of high level executives and senior managers’ remuneration systems, including stock options

  • registration and identification of shareholders beyond a certain proportion

  • mandatory capital requirements for all financial institutions

  • disclosure of leverage/debt exposure, the source and the amount of funds raised

  • identification of larger shareholders for all investment products.

For more detailed advice in relation to the way in which these measures may affect your business in each of these jurisdictions, please contact the people listed in this briefing, or your usual Herbert Smith contact.



 
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The content of this article does not constitute legal advice and should not be relied on as such. Specific advice should be sought about your specific circumstances.

Herbert Smith LLP, Gleiss Lutz and Stibbe are three independent firms which have a formal alliance.

© Herbert Smith LLP 2008

 

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