The European Securities and Markets Authority (ESMA) has published Questions and Answers: Implementation of the Regulation on Short Selling (Q&A) which addresses questions arising with respect to the implementation of the EU Regulation on short selling and certain aspects of credit default swaps (the Short Selling Regulation).

ESMA stated that the purpose of publishing the Q&A is the promotion of common supervisory approaches and practices amongst the EU’s national regulators on the requirements of the Short Selling Regulation when it enters into force on November 1, 2012. ESMA expects to revise and update the Q&A before November 1 as ESMA responds to further questions.

ESMA indicated that the Q&A is intended to provide clarity on the requirements of the new regime by providing responses to questions asked by market participants, national regulators, and others in relation to the application of the Short Selling Regulation. Specifically it addresses issues related to:

  • territorial scope;
  • transparency requirements;
  • calculation of net short positions;
  • uncovered short sales; and
  • the applicable enforcement regime.

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