[ M A R K E T
R E V I E W
and costly for reporting entities
and whether public disclosure of
net short positions in shares are
effective. It also posed the question
of whether the thresholds for dis-
closure—both public and private—
should be changed.
News to follow
The noises seem encouraging. Yet
whether ESMA will deliver what
the industry wants is another
matter. Certainly Robinson does
not believe that there will be any
change in the disclosure thresh-
olds.
“We don’t support the 0.5%
public disclosure threshold, though
recognise that politically it will
probably be hard to change,” says
Robinson. “Our primary target is
to make the regime more efficient,
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TheTrade
Autumn 2017
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S H O R T
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thus assisting the majority of firms
that use short selling for dynamic
risk management and hedging
purposes as well as those that take
fundamental directional positions.”
As for the loophole—ESMA says
it has no intention of looking at
short selling using special purpose
offshore structures.
The regulator has had its hand
strengthened by the continued
In June, Tom Farley, head of the
New York Stock Exchange, said
that short sellers should be forced
to reveal more of their activities
and called the practise of short
selling “icky and un-American.”
The consultation closed in Sep-
tember and the regulatory body
will deliver its final advice to the
EC by the end of the year. But, de-
spite the market’s noises it seems
“If you have to disclose a short position you
might find it harder to get boardroom access,”
CYRUS POCHA, SENIOR ASSOCIATE, FRESHFIELDS
critical voices around the world.
Despite the already stringent rules,
participants around the globe have
been asking for further tightening.
there will continue to be strictures
post-review which are unlikely to
lead to the kind of progress that
short sellers are hoping for.