Regulatory Alerts2011-08-13
Agreement of 11 August 2011 of the National Securities Market Commission regarding short positions on Spanish financial sector shares
The Spanish National Securities Market Commission (CNMV) issued a temporary prohibition on establishing or increasing net short positions in shares of designated Spanish financial institutions. This measure, effective immediately for fifteen days, aims to ensure financial stability amid extreme market volatility and aligns with similar actions by other European supervisors. The ban covers all operations resulting in short exposure, including spot and derivative trades, with specific exemptions for market makers, and carries severe penalties for non-compliance.
OFFICIAL STATE BULLETIN No. 194 Saturday, 13 August 2011 Sec. III. Page 92242
III. OTHER REGULATIONS NATIONAL SECURITIES MARKET COMMISSION 13845 Agreement of 11 August 2011 of the National Securities Market Commission regarding short positions on Spanish financial sector shares.
The situation of extreme volatility affecting European securities markets, particularly the quotations of financial institution shares, is clearly impacting market stability and may disrupt their orderly functioning. Under these conditions, it is necessary to review securities market operations to ensure the maintenance of financial stability.
Taking the above into account and the similar measures being promoted by other European supervisors within the ESMA framework, the President of the National Securities Market Commission (CNMV), by virtue of the delegation of powers granted by agreement of the CNMV Council dated 6 July 2011 (BOE of 18 July), has adopted the following agreement:
"To prohibit, on a precautionary basis with immediate effect and on a temporary basis, under Article 85.2 j) of Law 24/1988 of 28 July on Securities Markets (LMV), the carrying out by any natural or legal person of operations on securities or financial instruments that involve the establishment or increase of short positions on Spanish financial sector shares.
The prohibition will remain in force for a period of fifteen days from the date of adoption of this agreement, and may be extended if deemed necessary.
The precautionary prohibition affects any operation on shares or indices, including spot transactions, derivatives on organized markets, or OTC derivatives, that involves creating a net short position or increasing an existing one, even if done intraday. A short position shall be understood as that which results in a positive economic exposure to a fall in the share price.
The precautionary prohibition excludes operations carried out by entities performing market-making functions. Such entities shall be understood as financial institutions or investment firms that, in response to client orders or as a result of quoting bid and ask prices continuously in their capacity as members of official secondary markets or Multilateral Trading Facilities, temporarily incur short positions, especially intraday.
The shares or participatory units to which this agreement applies are, as of the current date:
Cívica Banca, S.A. Banco Bilbao Vizcaya Argentaria, S.A. Banco de Sabadell, S.A. Banco de Valencia, S.A. Banco Español de Crédito, S.A. Banco Pastor, S.A. Banco Popular Español, S.A. Banco Santander, S.A. Bankia, S.A. Bankinter, S.A. Caixabank, S.A. Caja de Ahorros del Mediterráneo. Grupo Catalana de Occidente, S.A.
cve: BOE-A-2011-13845
OFFICIAL STATE BULLETIN No. 194 Saturday, 13 August 2011 Sec. III. Page 92243
Mapfre, S.A. Bolsas y Mercados Españoles, S.A. Renta 4 Servicios de Inversión, S.A.
It is recalled that Article 99 z) quinquies of the LMV classifies the failure to comply with the precautionary measures provided for, among others, in letter j) of Article 85.2 of the Law as a very serious infringement."
Madrid, 11 August 2011.–The President of the National Securities Market Commission, Julio Segura Sánchez. cve: BOE-A-2011-13845 http://www.boe.es OFFICIAL STATE BULLETIN D. L.: M-1/1958 - ISSN: 0212-033X