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Decision of the European Securities and Markets Authority: smaller short positions than before must be reported to national supervisors


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On 16 March 2020, the European Securities and Markets Authority (ESMA) decided to lower the reporting threshold for net short positions from 0.2% to 0.1% on a temporary basis. The ESMA decision will enter into force immediately upon its publication on the ESMA website. The decision will apply for three months from its date of entry into force. The decision has no impact on the publication threshold for net short position (0.5%).

Based on the ESMA decision, a legal or natural person holding a net short position in a share traded on a regulated market must report to the relevant national competent authority detailed information on such a position if the position reaches or exceeds 0.1% of the issued share capital.

A net short position means the difference of securities held and shares sold by a natural or legal person. A short position may also arise out of a derivative contract or index basket.

The lowering of the reporting threshold does not apply to

  • shares traded in a multilateral trading facility
  • market making
  • stabilisation as referred to in Article 5 of the Market Abuse Regulation
  • shares traded on a regulated market, whose primary marketplace is located in a third country

ESMA considers that, due to the recent exceptional developments in financial markets linked to the COVID-19 pandemic, it is essential for national authorities and ESMA to have more comprehensive information on net short positions taken. The purpose of lowering the reporting threshold is to improve the opportunities of the national authorities and ESMA to assess the situation and react if the functioning of the markets, financial stability and investor protection require more stringent action.

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Regulator Information

Abbreviation: FIN-FSA
Jurisdiction: Finland

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