Press Release: Short selling: Commission adopts technical standards

The European Commission has set out the detailed rules aimed at reducing the risk of settlement failures linked to naked short selling, as well as the means by which market participants should disclose significant short positions to the market.

The technical standards, adopted on 29 June 2012 by the Commission, are based on the work of the European Securities and Markets Authority (ESMA). They notably specify the details of the so-called "locate rule," which ensures that short sales do not result in a failure to deliver. The new rules also detail how ESMA is to determine the shares which are exempt from the Short Selling Regulation by virtue of their principal trading venue being outside the Union.

Together with the Short Selling Regulation that they implement, these regulations will create a more transparent, orderly and stable market by reducing the risks tied to short selling.

European Commission: MEMO/12/508: Short selling: technical standards – Frequently asked questions http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/12/508&format=HTML&aged=0&language=EN&guiLanguage=en

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