In a press release dated 17 October 2012, the AMF draws the attention of the investors to the entry into force on 1st November 2012 of the European Regulation n°236/2012 regarding short selling and the abrogation of the instructions n°2010-08 et 2011-03 accordingly.

The text strengthens and harmonises the rules that applies to short positions in shares and in sovereign debt.

Since 2011, France had transparency rules on short positions in shares that were traded on a French regulated market or an on organised multilateral trading facility. The new European rules do not substantially modify the rules set out by the AMF. However, what is new is the extension of these transparency obligations to short positions in all shares admitted to trading on European markets and as well as in the sovereign debt issued by member States of the European Union.

Moreover, the regulation regulates the speculative devices linked to short selling. So, the locate requirements for short-sold securities are bolstered in order to prevent delivery failures. The buy-in procedures for clearing houses are harmonised and the timeframe is shortened.

Finally, the purchase of sovereign CDS (Credit Default Swaps) which allow buyers to cover themselves against the risk of the issuer defaulting is prohibited unless the purpose is to hedge a correlated exposure.

The AMF also publishes a document which provides details about the implementation of these main measures and among others the methods for calculating short positions and for transmitting them to the competent authorities. As a conclusion, a Q&A drafted by the ESMA and available on its Website is referred to.