Brussels, 20/04/2009 (Agence Europe) - The European Commission has lunched a public consultation exercise that will run until Wednesday 10 June 2009 on the review of EU Directive 2003/6/EC (expected in the autumn) on insider dealing and market manipulation. It is asking stakeholders whether the EU should introduce rules to cover short selling to force short sellers to register their holdings with the authorities. Should the competent authorities be allowed to take emergency measures, like a temporary ban on short selling, up to certain limits set at EU level? Short selling is a speculative technique used by traders that led to a collapse in share prices to extremely low levels at the lowest point of the financial crisis. Short selling involves investors, typically hedge funds, borrowing shares that they then sell in the hope of buying them back later when their price has fallen. It was temporarily banned by the regulatory authorities in some countries recently. The Commission recognizes that the emergence of different rules in different mss makes it difficult to ensure the financial markets are integrated and the different rules may lead to extra costs.
The European Commission is asking stakeholders whether EU legislation should be simplified. It argues that the formal obligation on listed companies to compile lists of individuals who have access to confidential information is a severe administrative burden. The current €5,000 threshold above which suspect deals must be notified to the national authorities may be increased, as has been suggested by the ESME group of EU experts (see EUROPE 9784). The Commission believes that extending the scope of Directive 2003/6/EC to cover the multilateral trading systems (MTF) as defined in the MiFID Directive (2004/39/EC) should be examined, and recommends clarifying the criteria whereby the publication of confidential information can be delayed in order to shore up the financial viability of a vulnerable business. (M.B. trans fl)