Many financial regulators around the world are struggling to keep things under control and the pan-EU regulator ESMA is no different. They are aiming to shore COVID19-affected markets by forcing hedge funds and anyone else trying to take advantage of the crisis to disclose more detail about short selling positions.
ESMA is halving the threshold for disclosures on Net Short Positions due to the massive stock market volatility that threatens the market confidence in the EU. ESMA also claims that practices like short selling only further exacerbate price swings and cause more losses.
According to the new rules, any short selling position that is 0.1% or more of a company’s outstanding shares now must be reported. In comparison, the threshold until now was 0.2%. These rules will apply to the UK as well, at least until the BREXIT period ends.
This is a good thing, I think. I just hope this crisis will end soon.