In response to the disclosure measures and short selling restrictions imposed on September 18th and 19th by the U.K. Financial Services Authority ("FSA" ) and the U.S. Securities and Exchange Commission, regulators around the world have either banned short selling, added restrictions on short selling or added disclosure requirements with respect to short positions in their home jurisdiction. By banning, restricting and disclosing short sales, regulators are seeking to maintain confidence in their own markets and complement the measures taken by U.K. and U.S. regulators. As a result, short sellers will face fewer alternative jurisdictions as the trading week opens. Furthermore, according to press reports, regulators in other countries, such as Austria and Portugal, are currently considering measures similar to those that have been passed by other regulators. Clients and others who may be affected by the requirements below are encouraged to seek advice from local counsel.

Australia 

Effective September 22, 2008, the Australian Securities and Investments Commission (“ASIC”) has banned short selling (naked and covered) for all listed stocks, subject to a limited exemption for authorized marketmakers. ASIC will reassess in 30 days from September 22, 2008 whether or not it will at that time, or at a later date, reopen covered short sales for non-financial stocks.

Click here to read the ASIC press release. 

Belgium

Effective September 22, 2008, the Commission Bancaire, Financière et des Assurances (“CBFA”) has banned short sales of financial stocks on Euronext Brussels. Every sales order for shares of financial stocks must be fully covered by the shares. In addition, any person or body that held a stake of more than .25% of a financial institution listed on Euronext Brussels must inform the CBFA and the market. Both the shortselling prohibition and the disclosure requirement are currently intended to be in effect for three months.

Click here to read the CBFA press release.

Canada (Ontario)

Effective September 19, 2008, the Ontario Securities Commission (“OSC”) issued a Temporary Order prohibiting short selling of securities of certain financial sector issuers that are listed on the Toronto Stock Exchange and interlisted in the United States. The Canadian Securities Administrators (“CSA”) stated that other jurisdictions within the CSA will be taking similar action in the coming days. The new OSC rule is currently intended to cease to have effect on October 3, 2008, unless extended by order of the OSC.

Click here to read the OSC press release.

Click here to read the CSA press release.

France

Effective September 22, 2008, the Autorité des Marchés Financiers (“AMF”) issued measures stating that market participants are required to deliver securities sold on the regulated market within three days. The AMF further stated that anyone in a net short position above .25% of the capital of a company must declare it to the AMF and the market the following day at the latest. It is our understanding that the AMF is prohibiting short selling on equities issued by credit institutions, investment companies and insurance companies that are listed on the French markets (Euronext, MATIF and MONEP) with certain exceptions for market makers and liquidity providers. [Note: We do not have a link for the shorting prohibition].

Click here to read the AMF press release.

Germany

Effective September 20, 2008, the Federal Financial Supervisory Authority (“BaFin”) has temporarily prohibited short sales of shares of various companies from the financial sector. Exempted from the ban are name-to-follow transactions by lead brokers and transactions of persons who have undertaken by contract to make binding buy and sell bids to the extent that such transactions are required for performance of their contractual obligations. Also exempted are short sales used to secure already existing positions. The ban is effective until December 31, 2008, but will be reviewed on an ongoing basis.

Click here to read the BaFin press release.

Ireland

Effective from midnight on September 18, 2008, the Financial Regulator has prohibited short selling of stocks on the Governor and Company of the Bank of Ireland, Allied Irish Banks Plc, Irish Life and Permanent Plc and Anglo Irish Bank Corporation Plc., subject to a market-maker exemption. The measures taken in Ireland are consistent with those introduced in the U.K. where Irish stocks are also listed. The prohibition applies to any new short positions, including increases in existing short positions. The ban does not prevent existing short positions on September 18, 2008 from being continued, nor does it prevent trading to reduce or close out the short position. Additionally, effective September 23, 2008 and each business day thereafter, anyone having an economic interest of .25% or more of the issued share capital to which the short sale ban would have applied if entered into after issuance of the new rule must make a disclosure on an RIS system by 3:30 PM on that day.

Click here to read the Financial Regulator press release.

Netherlands

According to a September 21, 2008, Dow Jones Newswire article, the Dutch Authority for the Financial Markets will shortly introduce a three month ban on short selling in financial shares.

Switzerland

The Swiss Federal Banking Commission (“SFBC”) reminded market participants on September 19, 2008 that Swiss law prohibits naked short selling. The SFBC also reminded banks that when selling securities for clients, they must make sure that they are able to deliver such securities on settlement date. The Swiss Stock Exchange extended the FSA's prohibition on creating net short positions to certain large Swiss financial companies.

Click here to read the SFBC press release.

Taiwan

Effective September 22, 2008, the Financial Supervisory Commission (“FSC”) has banned short selling of 150 stocks (members of the Taiwan 50 Index, Taiwan Mid-Cap 100 and Taiwan Technology Index) when they trade below the previous session’s closing levels. The ban is intended to be in effect until October 3, 2008, unless extended by the FSC. Note: The release is only available in Chinese at this time.