News

Revised SEC Form ADV Posted

The Securities and Exchange Commission published the revised Form ADV.

The European Securities and Markets Authority today (November 16) published its final guidance for rules to implement the Alternative Investment Fund Managers Directive (AIFM). From ESMA’s press release summarizing the four broad areas AIFM addresses: 1. General provisions for managers, authorisation and operating conditions The first part (p.16-135) of the advice clarifies the operation of the thresholds th[...]

SEC to Vote on Hedge Fund, Other Private Fund Advisers’ Reporting

The Securities and Exchange Commission will meet Wednesday, October 26, to consider whether to adopt a rule requiring advisers to hedge funds and other private funds to report information for use by the Financial Stability Oversight Council in monitoring risk to the U.S. financial system. “Under the version of the rule proposed by the SEC on Jan. 26,” Bloomberg reports (SEC Head Doesn’t Foresee U.S. Short Selling Bans

Securities and Exchange Commission Chairman Mary Schapiro yesterday (October 20) said the regulator would not consider short- selling bans such as those under consideration in Europe. “I can’t envision the SEC doing another short-selling ban,” she said, according to a Bloomberg report (“SEC to Weigh Hedge Fund Rule on Systemic Risk Data Analysis”).

EU Close to Deal on Shortselling Restraints

EU policymakers are close to a deal that would ban naked credit default swaps for sovereign debt. Announcement expected next Tuesday. Some big hurdles must be jumped over to complete the whole package, including: the “generosity” of the exemptions; opt out by national regulators for short periods; and, the definition/process for determining “naked,” or uncovered, short selling. For equities, a permanent ban, too, would be placed on on naked, or uncovered, short selling and new d[...]

Fed Reserve NY Staff Report Questions SS Bans

A recently published study the staff at the Federal Reserve-New York ( “Market Declines: Is Banning Short Selling the Solution” ) finds that the bans on short selling filed to lift prices, as the regulators intended, and instead increased liquidity costs while imposing other adverse effects on market participants. “Our cross-sectional tests suggest that the decline in stock prices was not significantly driven or amplified by short selling.[...]

Instinet, Credit Suisse Studies: Shorting Bans Do Little to Help Europe’s Banks

Bloomberg reports (“Shorting Bans Do Little to Help Europe Banks, Instinet Says,” October 3, 2011) that “financial stocks subject to rules restricting short sales in France, Italy, Belgium and Spain have behaved about the same as banks in European countries with no such prohibitions, according to Instinet Inc.” “The study says prohibiting bearish bets did littl[...]

Dutch Finance Minister Doubts Short Selling Restrictions

In a September 5 letter to lawmakers, the Dutch Finance Minister questioned recent bans on short selling financial stocks by four European Union countries in late August, saying he was “not particularly worried” about recent market volatility, which he said the restrictions would not quell. Noting the “useful role” of short selling in the pricing and liquidity of shares, Minister Jan Kees de Jager cited the views of experts who doubt the ban’s effectiveness long-term, ESMA Publishes Consultation Papers on AIFM Directive

In late August, the European Securities and Markets Authority published its second “consultation paper” on the Alternative Investment Fund Managers Directive outlining proposals for rules on supervision and third-country entities (including access to EU-based markets and investors). Public comment is due by September 23. ESMA plans to deliver its final advice to the EU Commission by November 16. The second consultation paper [...]

EU Member-Countries Extend Short Selling Bans to September 30

Belgium, France, Greece, Italy, and Spain extended their bans on European bank stocks until the end of September. For details: Belgium http://www.fsma.be/en/OtherNews/Article/press/div/2011-08-25_shortselling.aspx France http://www.amf-france.org/documents/general/10122_1.pdf Greece http://www.hcmc.gr/photos/anakoinoseis/files/25.8.2011_Press_Statement_short%20selling.pdf Italy http://www.consob.it/mainen/press_release/comunicato_20110825.htm Spain http://www.cnmv.es/Portal[...]