ESMA Lowers Reporting Threshold for Net Short Positions

The European Securities and Markets Authority (ESMA ESMA European Securities and Markets Authority (ESMA) is an independent Authority of the European Union that is responsible for the safety, security, and stability of the European Unions’ financial system and is charged with protecting the public. The European supervisory authority for the securities sector, ESMA was established on 1 January 2011. The European Securities and Markets Authority is an independent EU authority based in Paris. It aims to contribute to the effectiveness and stability of t European Securities and Markets Authority (ESMA) is an independent Authority of the European Union that is responsible for the safety, security, and stability of the European Unions’ financial system and is charged with protecting the public. The European supervisory authority for the securities sector, ESMA was established on 1 January 2011. The European Securities and Markets Authority is an independent EU authority based in Paris. It aims to contribute to the effectiveness and stability of t Read this Term) announced this Monday that is has issued a temporary decision in which it has lowered the reporting threshold for net short positions as a precautionary action regarding COVID-19.

In particular, the European regulator now requires holders of net short positions in shares traded on an EU regulated market to notify the relevant national competent authority (NCA) if the position reaches or exceeds 0.1 percent of the issued share capital after the entry into force of the decision.

“ESMA considers that lowering the reporting threshold is a precautionary action that, under the exceptional circumstances linked to the ongoing COVID-19 pandemic, is essential for authorities to monitor developments in markets,” the European watchdog said today.

ESMA: the current situation is a serious threat

“The measure can support more stringent action if required to ensure the orderly functioning of EU markets, financial stability and investor protection. ESMA considers that the current circumstances constitute a serious threat to market confidence in the EU, and that the proposed measure is appropriate and proportionate to address the current threat level to EU financial markets.”

The lowered threshold is effective immediately, and holders who meet the criteria must notify NCAs of their relevant positions at the close of today’s trading session. While the measures apply to any natural or legal person regardless of where they are living, the measures do not apply to shares admitted to trading on a regulated market where the principal venue for the trading of the shares is located in a third country.

Regulators try to stabilize financial market

ESMA’s measures follow on from the Australian Securities and Investments Commission (ASIC), also putting in place measures in response to Coronavirus Coronavirus The outbreak of Covid-19 or Coronavirus in early 2020 has since redefined the financial services industry. Brokers have been forced to quickly adapt to several changes, both positive and negative.This includes the FX industry, which saw surges in volumes across the retail and institutional space in Q1 2020. This trend can be explained by an outflow of volatility, coupled with countries taking major moves to stabilize their respective economies.In conjunction with uncertainty caused by the virus, The outbreak of Covid-19 or Coronavirus in early 2020 has since redefined the financial services industry. Brokers have been forced to quickly adapt to several changes, both positive and negative.This includes the FX industry, which saw surges in volumes across the retail and institutional space in Q1 2020. This trend can be explained by an outflow of volatility, coupled with countries taking major moves to stabilize their respective economies.In conjunction with uncertainty caused by the virus, Read this Term. As Finance Magnates reported earlier today, the Australian Securities and Investments Commission (ASIC) took steps to ensure that the country’s equity market remains resilient.

Specifically, ASIC has issued directions under the ASIC Market Integrity Rules to a number of large equity market participants. Specifically, they have been told to limit the number of trades executed each day until further notice.

Under the watchdog’s directions, firms need to reduce their number of executed trades by up to 25 percent from the levels executed on Friday. Therefore, high volume participants and their clients will need to actively manage their volumes.