Regulatory Alerts2020-03-19
ESMA Opinion on FSMA Emergency Measure under the Short Selling Regulation
The European Securities and Markets Authority (ESMA) issued an opinion on 19 March 2020 approving the Belgian Financial Securities and Markets Authority's (FSMA) emergency ban on establishing or increasing net short positions on Belgian equities. ESMA determined that the measure was necessary, appropriate, and proportionate to address serious threats to market confidence and financial stability caused by the COVID-19 pandemic and resulting market volatility. The opinion confirms that the one-month prohibition, which excludes market making and certain index-related instruments, effectively mitigates the risk of self-reinforcing downward price spirals in the Belgian financial market.
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