In this Final Report the European Securities and Markets Authority (ESMA) undertakes a systematic review of some of the short selling regulation (SSR) provisions and proposes targeted changes. During the COVID-19 crisis, Relevant Competent Authorities (RCAs) adopted a number of emergency measures, consisting both of short-term and long-term bans. Evidence from the crisis proved how widespread emergency situations might unfold very quickly requiring immediate responses.
In such instance, the measures adopted by RCAs were not only more numerous, but also differed in scope with respect to most emergency measures previously taken by RCAs under SSR. ESMA has analyzed the impact of such measures and, after gathering feedback from stakeholders, proposes in this Final Report targeted amendments to the SSR, which aim, among others, at facilitating the operation of the SSR in any future emergency circumstances.
Additionally, ESMA in light of the episodes of high volatility which took place in the US markets and elsewhere in respect of the so-called “meme stocks”, has considered the possibility of similar phenomena developing in European markets and has re-assessed in light of such occurrences the relevant SSR provisions. In this respect this Final Report proposes some targeted changes which aim at promoting supervision of locate arrangements and strengthen supervisory convergence.