The Council of the EU is taking steps to 'harmonise' short-selling regulations and areas of credit default swaps across all 27 member states. The European Securities and Markets Authority (ESMA) will submit draft technical standards by 31 March this year with the regulation applicable in all member states from 1 November. There will be significant changes in trading and securities lending regarding equities.
Interestingly the UK delegation abstained from the vote. The Council states their objective to "ensure the proper functioning of the internal market and to improve the conditions of its functioning, in particular with regard to the financial markets, and to ensure a high level of consumer and investor protection".
With the second bailout of Greece amidst on-going concerns over Eurozone peripheral debt, it would appear that the Council is seeking to head off any potentially destabilising trading. As the Council themselves: "At the height of the financial crisis in September 2008, competent authorities in several Member States and supervisory authorities in third countries such as the United States of America and Japan adopted emergency measures to restrict or ban short selling in some or all securities...The measures adopted by Member States were divergent as the Union lacks a specific common regulatory framework for dealing with short selling issues".
Published: 23 February, 2012