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Communication Department News Release
Paris, 24 July 2009
Short selling: AMF extends exceptional measures on financial stocks until end January 2010 and
issues recommendations for a permanent regime in Europe
The AMF Board confirmed at its 23 July 2009 meeting that the measures introduced on 19 September
2008 to prohibit short selling of selected financial stocks would be extended until the end of January 2010.
The Board welcomes the proposals on short selling disclosure made by CESR1 on 8 July and will await the
outcome of this consultation before deciding what regime to adopt for France.
Further, in light of CESR's work on the issue of settlement, the AMF stresses the following points that it
considers vitally important:
- The seller should be strictly obliged to deliver securities sold on a regulated market or a multilateral
trading facility within the standard settlement cycle (T+3). If the seller fails to remedy a non-delivery
within six days of the trade date at most, its position should be bought in at the highest price recorded
since the trade. The AMF points out that several of the decisions handed down recently by its
Enforcement Committee have stressed that failure to deliver at T+3 is a serious breach of regulations.
- To be in a position to comply with its delivery obligation, a short seller should, prior to trading,
conclude an agreement in principle with a securities lender, enabling delivery at T+3.
In addition, the AMF urges IOSCO2 and CESR to carefully examine the following supplemental measures,
which it believes would enhance the regulatory regime for short selling:
- investors should be required to inform their intermediary whether the order they are placing is for a
short sale;
- intermediaries should pass this information on to the regulator so that it can disseminate aggregate
information to the market;
-short sellers should be prohibited from executing a trade at a price below the last traded price;
- the regulator should be permitted to ban short selling in exceptional circumstances, such as a steep
price fall that exceeds a predetermined threshold.
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Source: AMF Communication Department - Tel: +33 (0)1 5345 6029 or +33 (0)1 5345 6028
1 Committee of European Securities Regulators
2 International Organization of Securities Commissions