DECISION BY THE CNMV TO IMPOSE, EFFECTIVE IMMEDIATELY AND FOR A PERIOD
OF 3 MONTHS, RESTRICTIONS ON SHORT SELLING AND SIMILAR TRANSACTIONS
UNDER ARTICLE 85.2.J) OF THE SECURITIES MARKET ACT AND ARTICLE 20 OF
REGULATION (EU) 236/2012, DUE TO THE EXISTENCE OF EXCEPTIONAL
The Comisión Nacional del Mercado de Valores (CNMV) has evaluated the individual and
overall impact on the market of the measures restricting net short positions in Spanish
shares adopted in July 2012 and extended by the decision of 18 October, taking into account
the exceptional situation being experienced by the Spanish financial system.
Noteworthy in this respect, as announced on the occasion of that extension, is the ongoing
process of restructuring in the Spanish financial sector to cover the banking sector’s capital
needs. This process is being undertaken in the framework of the Memorandum of
Understanding (MoU) signed on 23 July by the European Commission, the Kingdom of Spain
and the Bank of Spain. The MoU made the provision of assistance conditional upon
fulfilment of a number of conditions, including an assessment of individual capital needs,
recapitalisation of the banks, and the segregation of impaired assets into an asset
This process of bank restructuring has not yet concluded, which creates a range of
uncertainties with respect to the Spanish financial system that may affect financial stability.
In this context, failure to ban short sales would heighten uncertainty through their likely
impact on the market. Completion of that process is considered to be absolutely necessary to
ensure the stability of the Spanish financial system and capital markets. Moreover, available
empirical evidence reveals that a number of events or circumstances that led to the adoption
of the July decision and its extension and which may threaten the integrity of the Spanish
financial markets are persisting.
Accordingly, the foregoing factors make it advisable to maintain the temporary restrictions
on transactions that create or increase net short positions in Spanish shares and to impose a
ban, in accordance with 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,
effective from this day.
Additionally, on this day, in accordance with article 27 of the aforementioned Regulation,
ESMA has issued its opinion on the measures adopted by the CNMV, in which it considers
the measure to be appropriate and proportional to address the threats persisting in Spain and
that its duration is justified.