Short Selling Restrictions in the EU

Abstract:     
This paper reviews the EU Regulation on short selling and certain aspects of credit default swaps (Regulation (EU) No 236/2012) which will apply from 1 November 2012. The new rules introduce restrictive rules on traders’ short-selling of bonds and shares which are admitted to trading on EU markets and in terms of buying credit insurance relating to EU sovereign debt. The paper outlines the trading bans and limitations it will impose, together with the disclosure and reporting requirements underpinning the new regime. It also presents the reasons behind the Regulation, its objectives and potential impact on the market.

Number of Pages in PDF File: 6

Keywords: Short selling, credit default swaps, sovereign debt, European Commission, financial crisis, regulatory reform

JEL Classification: G28, G18

Accepted Paper Series