On September 17, the European Securities and Markets Authority (ESMA) published a consultation paper on guidance on the market maker and primary dealer exemptions under Article 17 of the EU Short Selling Regulation (EU236/2012).

The consultation paper contains draft guidelines on market making activities as defined under the Short Selling Regulation, and on a common approach to the application of exemptions which will apply to market makers and primary dealers in relation to net short position transparency requirements and the restrictions on uncovered short sales. The guidelines address the criteria to be met in applying for an exemption, and the conditions to be used in assessing exemption applications. The aim is to achieve consistency of market practices, convergence of supervisory practices and a common approach among national competent authorities to the application of these exemptions.

Comments are requested by October 5. ESMA expects to adopt the final version of the guidelines in November 2012.

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