EC: Short selling

The EC has set out rules aimed at reducing the risk of settlement failures linked to naked short selling, as well as the means by which market participants should disclose significant short positions to the market. The technical standards adopted are based on ESMA’s work and specify the details of the "locate rule," which ensures that short sales do not result in a failure to deliver. The new rules also detail how ESMA is to determine the shares which are exempt from the Short Selling Regulation by virtue of their principal trading venue being outside the EU.