Emergency short selling ban lifted by European markets regulator
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Emergency short selling ban lifted by European markets regulator
The decision means investors will now be able to place short bets on all shares in Austria, Belgium, France, Greece, Italy and Spain without restriction.
The temporary short selling ban issued across several European countries to help deal with the market volatility caused by Covid-19 has been halted.
In a statement published 18 May, the European Securities and Markets Authority announced the “non-renewal and termination” of the emergency restrictions it put in place in March in Austria, Belgium, France, Greece, Italy and Spain. Last month, it had said an extension past this date might be necessary; but has now decided against it.
The restrictions in Italy had already been extended to 18 June, however the Italian regulator Consob announced it would lift the ban a month early.
The decision means investors will now be able to place short bets on all shares in these markets without restriction. During normal market conditions, betting on share price falls is accepted as a legitimate practice by regulators, however during severe corrections and widespread turbulence, authorities have the power to restrict it.
Their announcement comes after a group of European hedge fund and trading lobbying groups called for the removal of the ban, on 16 May, to improve market efficiency and prevent further damage to investor portfolios as a result of the pandemic.
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