Agreement of 15 February 2012 by the National Securities Market Commission lifting the precautionary prohibition on short positions in Spanish financial sector shares

OFFICIAL STATE BULLETIN No. 41 Friday, 17 February 2012 Sec. III. Page 14522

III. OTHER REGULATIONS NATIONAL SECURITIES MARKET COMMISSION 2393 Agreement of 15 February 2012, of the National Securities Market Commission, lifting the precautionary prohibition regarding short positions on Spanish financial sector shares.

On 11 August 2011 (BOE of 13 August), the National Securities Market Commission (hereinafter CNMV) agreed to precautionarily prohibit the execution of transactions on securities and financial instruments that would result in the establishment or increase of short positions on Spanish financial sector shares.

The prohibition was temporarily extended by the CNMV agreements of 25 August 2011 and 28 September 2011, as the situation of continued instability in European securities markets and, in particular, in financial values had not subsided.

According to the analysis carried out, the situation of extreme volatility, continued instability, and uncertainty in European securities markets and, in particular, in financial values, which justified the adoption of temporary restrictions on transactions that constituted or increased net short positions in the Spanish financial sector, has subsided during these last weeks. Contributing to this circumstance, among other factors, have been the advances made in the European Union to contain instability in public debt markets and strengthen fiscal discipline, the new long-term liquidity auctions by the European Central Bank, and, in Spain, the approval, by the Council of Ministers on 3 February, of Royal Decree-Law 2/2012 on the Sanitation of the Financial Sector.

Furthermore, the precautionary prohibition on executing transactions on securities or financial instruments that involve the establishment or increase of short positions in financial sector shares may be generating some adverse effects on activity, liquidity, and market depth; therefore, it is necessary to limit its period of validity as much as possible.

This analysis has been shared with European regulators who, in coordination with ESMA, introduced similar measures in August 2011 (France, Italy, and Belgium), leading to the conclusion that conditions exist to proceed with their lifting. Thus, the French authorities have decided not to extend the prohibition, which consequently has expired; the Belgian regulator has agreed to lift the prohibition, while the prohibition in Italy expires on 24 February.

Taking into account all the above, particularly the current conditions of European securities markets, where the situation of extreme volatility, continued instability, and uncertainty has been gradually subsiding, the Executive Committee of the CNMV, by virtue of the delegation of powers granted by Agreement of the Board dated 6 July 2011, has adopted the following Agreement:

"Lift, with effect from 16 February 2012, the precautionary prohibition on executing transactions on securities and financial instruments that involve the establishment or increase of short positions on Spanish financial sector shares, established in the CNMV Agreement of 11 August 2011 and temporarily extended by the CNMV agreements of 25 August 2011 and 28 September 2011, under Article 85.2 j of Law 24/1988, of 28 July, on the Securities Market (LMV)."

Madrid, 15 February 2012.–The President of the National Securities Market Commission, Julio Segura Sánchez.

cve: BOE-A-2012-2393 http://www.boe.es OFFICIAL STATE BULLETIN D. L.: M-1/1958 - ISSN: 0212-033X