A number of European regulators have announced this Monday that they will be reversing their emergency short-selling measures which prohibited the creation or increase of net short positions on shares.

The three regulators in question are the Financial Services and Markets Authority (FSMA) of Belgium, the Financial Market Authority (FMA) of Austria and the Autorité des Marchés Financiers (AMF) of France, which have all decided to lift their restrictive short-selling measures.

In particular, the FSMA of Belgium said that as of the 19th of May 2020 the ban, which was imposed on the 18th of March 2020, will be suspended. The initial measure applied to any transaction which created, or related to, a financial instrument, and was extended on the 15th of April 2020.

Austria’s regulator, as Finance Magnates reported, also implemented similar emergency measures in March and extended them in April. However, in consultation with the European Securities and Markets Authority ( ESMA  ESMA European Securities and Markets Authority (ESMA) is an independent Authority of the European Union that is responsible for the safety, security, and stability of the European Unions’ financial system and is charged with protecting the public. The European supervisory authority for the securities sector, ESMA was established on 1 January 2011. The European Securities and Markets Authority is an independent EU authority based in Paris. It aims to contribute to the effectiveness and stability of the EU financial system by ensuring the integrity, transparency, efficiency, and orderly functioning of securities markets, as well as enhancing investor protection. ESMA fosters supervisory convergence among securities regulators and financial sectors through its work with other EU supervisory authorities. ESMA is independent; there is full accountability towards the European Parliament, where it appears before the Economic and Monetary Affairs Committee, at their request for formal hearings. What Functions Does ESMA Perform?The purpose of assessing risks to investors, markets, and financial stability is to spot emerging trends, threats, and vulnerabilities, and where possible opportunities in a timely fashion so that they can be responded to. ESMA uses its unique position to identify market developments that threaten financial stability, investor protection, or the orderly functioning of financial markets. ESMA’s risk assessments build on and complement risk assessments made by others. The purpose of compiling a single rulebook for European financial markets is to enhance the EU Single Market by creating a level playing field for investors and issuers across the EU. ESMA’s four activities are linked. Insights gained from risk assessment feed into the work on the single rulebook, supervisory convergence, and direct supervision, and vice versa. European Securities and Markets Authority (ESMA) is an independent Authority of the European Union that is responsible for the safety, security, and stability of the European Unions’ financial system and is charged with protecting the public. The European supervisory authority for the securities sector, ESMA was established on 1 January 2011. The European Securities and Markets Authority is an independent EU authority based in Paris. It aims to contribute to the effectiveness and stability of the EU financial system by ensuring the integrity, transparency, efficiency, and orderly functioning of securities markets, as well as enhancing investor protection. ESMA fosters supervisory convergence among securities regulators and financial sectors through its work with other EU supervisory authorities. ESMA is independent; there is full accountability towards the European Parliament, where it appears before the Economic and Monetary Affairs Committee, at their request for formal hearings. What Functions Does ESMA Perform?The purpose of assessing risks to investors, markets, and financial stability is to spot emerging trends, threats, and vulnerabilities, and where possible opportunities in a timely fashion so that they can be responded to. ESMA uses its unique position to identify market developments that threaten financial stability, investor protection, or the orderly functioning of financial markets. ESMA’s risk assessments build on and complement risk assessments made by others. The purpose of compiling a single rulebook for European financial markets is to enhance the EU Single Market by creating a level playing field for investors and issuers across the EU. ESMA’s four activities are linked. Insights gained from risk assessment feed into the work on the single rulebook, supervisory convergence, and direct supervision, and vice versa. Read this Term) the FMA will relax the restrictions imposed when the temporary restriction expires today, 18 May 2020 at 24:00, the regulator said.

Restrictions removed as COVID-19 panic subsides

Commenting on the measures, FMA’s Executive Directors, Helmut Ettl and Eduard Müller said in the statement: “The restrictions on short selling have paid an important contribution to absorb the irrational overreactions of the markets as well as to maintain investor confidence in the stability of the Austrian financial market. The ending of the restrictive measures marks a step towards returning to normality and is a positive signal for retail investors and professional investors.”

In its own statement, France’s AMF said that in consultation with ESMA and the Austrian, Belgian, Spanish, Greek and Italian national authorities all having taken similar measures, it decided not to renew the ban on net short positions, which expires this Monday.

ESMA also released its own statement today, alerting that multiple regulators have decided to not renew the restrictive measures, and highlighting that it contributed to today’s decision.