Agreement of 23 July 2012 of the National Securities Market Commission on the precautionary prohibition of transactions establishing or increasing net short positions on Spanish shares

OFFICIAL BULLETIN OF THE STATE
No. 177 Wednesday 25 July 2012 Sec. III. Page 53532
III. OTHER PROVISIONS
NATIONAL SECURITIES MARKET COMMISSION
9976 Agreement of 23 July 2012 of the National Securities Market Commission on the precautionary prohibition of carrying out transactions on securities and financial instruments that involve establishing or increasing net short positions on Spanish shares.
The situation of extreme volatility affecting European securities markets could disrupt their orderly functioning and affect the normal conduct of financial activity. 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 taken by the Italian supervisor, the National Securities Market Commission agrees:
To precautionarily prohibit, with immediate effect and on a temporary basis, under Article 85.2(j) of Law 24/1988 of 28 July on Securities Markets (LMV), any natural or legal person from carrying out transactions on securities or financial instruments that involve establishing or increasing net short positions on shares admitted to trading on a Spanish official secondary market for which the National Securities Market Commission is considered the competent authority for the purposes of Article 9 of Commission Regulation (EC) No 1287/2006. The prohibition will remain in effect for a period of three months from the moment of its publication today until the close of trading on 23 October inclusive, and may be extended or lifted if deemed necessary. The precautionary prohibition applies to any transaction on shares or indices, including cash transactions, derivatives on organized markets, or OTC derivatives, that involves creating a net short position or increasing a preexisting one, even intraday. A net short position shall be understood as one that results in a positive economic exposure to a decline in the share price. The precautionary prohibition excludes transactions 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 continuously quoting bid and ask prices in their capacity as members of official secondary markets or multilateral trading systems, temporarily incur, especially intraday, net short positions. It is recalled that Article 99.z)quinquies of the LMV classifies 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, 23 July 2012.–The President of the National Securities Market Commission, Julio Segura Sánchez. cve: BOE-A-2012-9976 http://www.boe.es OFFICIAL BULLETIN OF THE STATE D. L.: M-1/1958 - ISSN: 0212-033X