On 4 March 2010, the Federal Financial Supervisory Authority (BaFin) issued a General Decree under which market participants must notify BaFin of net short-selling positions in selected financial stocks of a threshold of 0.2 % or more and publish the same of a threshold of 0.5 % or more.The provision relates to all transactions which, in terms of the holderâ??s aggregate economic interest, result in a net short-selling position in shares of the following companies:
- AAREAL BANK AG
- ALLIANZ SE
- GENERALI DEUTSCHLAND HOLDING AG
- COMMERZBANK AG
- DEUTSCHE BANK AG
- DEUTSCHE BÃ?RSE AG
- DEUTSCHE POSTBANK AG
- HANNOVER RÃ?CKVERSICHERUNG AG
- MLP AG
- MÃ?NCHENER RÃ?CKVERSICHERUNGS-GESELLSCHAFT AG
As the reasons for this measure, BaFin stated the necessity of establishing a provision enabling the supervisory authority, on a significantly better information basis, to take targeted action as required, sufficiently in advance and swiftly, against short-selling transactions that pose risks to the orderly conduct of securities trading and the stability of the financial system.
The provision provides for a two-tier transparency system: first, net short-selling positions of 0.2 % or more of the shares in issue of the specified companies must be notified to BaFin. Further notifications are required when such positions reach, exceed or fall below a further 0.1 % in each case. In addition, a publication of the position in anonymised form on the homepage of BaFin takes place of 0.5 % or more.
In addition to covered and uncovered short-selling transactions in the shares concerned, the provision also applies to other positions of financial instruments traded on the stock exchange or over-the-counter which ultimately correspond to a short-selling position in shares (e.g. sale of futures, purchase of put options, contracts for difference, regardless of whether physical delivery or cash settlement takes place). Also subject to notification and publication are the respective holders of the positions. Exceptions apply to market makers to the extent the transaction is required for performance of their contractual obligations.
The General Decree, in respect of the net short-selling positions and the thresholds to be notified, is oriented on the proposals published on 2 March 2010 by the Committee of European Securities Regulators (CESR) for a pan-European transparency system for net short-selling positions in whose development BaFin was involved to a decisive extent.
Bonn/Frankfurt a.M.,04. March 2010
