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SUMMARY OF:
Regulation (EU) No 236/2012 on short selling and certain aspects of credit
default swaps
KEY POINTS
The regulation:
Implementing and delegated acts
BACKGROUND
In times of financial instability, certain financial transactions such as short
selling and CDS bear the risk of aggravating any downward spiral in the prices
of shares, especially in financial institutions, threatening their viability and
creating risks to the whole financial system. Such instability in the financial
markets can spill over into the real economy.
For more information, see:
KEY TERMS
Short selling: a transaction in which a financial institution sells a financial
product it has borrowed, with the aim of buying it back later. The institution
hopes that in the meantime the price of the product will have fallen, so it has
to pay less than the price it obtained from the sale.
Credit default swaps (CDS): highly risky, unregulated derivatives.
Exceptional circumstances: in the context of this regulation:
there are adverse events or developments that constitute a serious
threat to financial stability or to market confidence in the EU country
concerned or in one or more other EU countries; and
the measure is necessary to address the threat and it will not have a
detrimental effect on the efficiency of financial markets, which is
disproportionate to its benefits.
MAIN DOCUMENT
Regulation (EU) No 236/2012 of the European Parliament and of the Council
of 14 March 2012 on short selling and certain aspects of credit default swaps
(OJ L 86, 24.3.2012, pp. 1-24)
Successive amendments to Regulation (EU) No 236/2012 have been
incorporated in the original text. This consolidated version is of documentary
value only.
RELATED DOCUMENTS
European Securities and Markets Authority Decision (EU) 2020/525 of 16
March 2020 to require natural or legal persons who have net short positions to
temporarily lower the notification thresholds of net short positions in relation to
the issued shares capital of companies whose shares are admitted to trading
on a regulated market above a certain threshold to notify the competent
authorties in accordance with point (a) of Article 28(1) of Regulation (EU) No
236/2012 of the European Parliament and of the Council (OJ L 116,
15.4.2020, pp. 5-13)
Regulation (EU) 2016/1033 of the European Parliament and of the Council of
23 June 2016 amending Regulation (EU) No 600/2014 on markets in financial
instruments, Regulation (EU) No 596/2014 on market abuse and Regulation
(EU) No 909/2014 on improving securities settlement in the European Union
and on central securities depositories (OJ L 175, 30.6.2016, pp. 1-7)
Commission Delegated Regulation (EU) No 918/2012 of 5 July 2012
supplementing Regulation (EU) No 236/2012 of the European Parliament and
of the Council on short selling and certain aspects of credit default swaps with
regard to definitions, the calculation of net short positions, covered sovereign
credit default swaps, notification thresholds, liquidity thresholds for
suspending restrictions, significant falls in the value of financial instruments
and adverse events (OJ L 274, 9.10.2012, pp. 1-15)
See consolidated version.
Commission Delegated Regulation (EU) No 919/2012 of 5 July 2012
supplementing Regulation (EU) No 236/2012 of the European Parliament and
of the Council on short selling and certain aspects of credit default swaps with
regard to regulatory technical standards for the method of calculation of the
fall in value for liquid shares and other financial instruments (OJ L 274,
9.10.2012, pp. 16-17)
Commission Implementing Regulation (EU) No 827/2012 of 29 June 2012
laying down implementing technical standards with regard to the means for
public disclosure of net position in shares, the format of the information to be
provided to the European Securities and Markets Authority in relation to net
short positions, the types of agreements, arrangements and measures to
adequately ensure that shares or sovereign debt instruments are available for
settlement and the dates and period for the determination of the principal
venue for a share according to Regulation (EU) No 236/2012 of the European
Parliament and of the Council on short selling and certain aspects of credit
default swaps (OJ L 251, 18.9.2012, pp. 11-18)
Commission Delegated Regulation (EU) No 826/2012 of 29 June 2012
supplementing Regulation (EU) No 236/2012 of the European Parliament and
of the Council with regard to regulatory technical standards on notification and
disclosure requirements with regard to net short positions, the details of the
information to be provided to the European Securities and Markets Authority
in relation to net short positions and the method for calculating turnover to
determine exempted shares (OJ L 251, 18.9.2012, pp. 1-10)