Belgium, France, Italy, and Spain Impose Short Selling Bans August 12

Belgium, France, Italy, and Spain imposed bans on August 11, 2011 against short selling of financial stocks. Securities regulators for Austria, the Netherlands, and the United Kingdom said they have no plans for short selling curbs. Greece and Turkey imposed bans on August 8, 2011. A summary follows below based on information from the regulators and the Alternative Investment Management Association. Web links provide access to additional information. This information is provided for guidan[...]

Study Questions SEC Rule 201 Short Selling Constraints

University of Memphis professors P.K. Jain and T.H. McInish argue in their article in Regulation magazine (“Everything Old is New Again,” July 2011) that the Securities and Exchange Commission’s Rule 201 imposing trading restraints on short selling activity after a 10-percent stock price decline “will do little to avoid future crises.” Their “empirical evidence from recent stock price declines suggests the rule is unnecessary.” Fur[...]

ESMA Publishes Consultation Paper to Implement AIFMD (Level 2)

On July 13, 2011, the European Securities and Markets Authority (ESMA) published its public consultation paper on implementing measures (Level 2 provisions) of the Alternative Investment Fund Managers Directive (AIFMD). This paper covers three of the AIFMD’s four parts: general provisions for managers; authorization and operating conditions; governance of depositaries to AIFs; and, transparency requirements and leverage. Speci[...]

EU Parliament Clears Short Selling/CDS Proposal as Negotiations with the Council Continue

EU Parliament on Tuesday (July 5) approved legislation implementing regulations covering short selling and collaterized debt swaps (CDS). Negotiations are underway between Parliament, the Council, and the Commission to resolve differences among the three bodies. No final outcome seems likely before the fourth quarter. The new ru[...]

AIFM Directive’s Publication Sets in Motion Implementation Timetable

Publication of the Alternative Investment Fund Managers Directive (AIFMD) in the European Union’s Official Journal on July 1 sets in motion implementation deadlines for the EU-wide securities regulator and EU member-states. The deadline for transposing the AIFMD into national law is July 22, 2013; the deadline for authorization in accordance with AIFMD is July 22, 2014. As a framework (“Leve[...]

CPIC: New Round of Proposed Short Selling Constraints to Punish Investors

FINALCPICLETTER_062311 Washington, D.C., June 23, 2011 – Citing numerous studies showing that past U.S. and foreign constraints on short selling transactions harmed investors’ interests worldwide, the Coalition of Private Investment Companies today questioned whether another round of regulatory proposals is “designed to suppress” investment strategies proven repeatedly to be[...]

SEC Report Shows Fails to Deliver Declined after Rule Changes

An April 25, 2011 report by the Securities and Exchange Commission (Office of Markets Division of Risk, Strategy and Financial Innovation) shows that that fails to deliver decreased significantly after the elimination of the OMM exception and the implementation of the T+3 Close-out Rule…. [F]ails have declined by 65.7% across all securities and 85.1% for threshold stocks since the elimination of the options market make[...]

CPIC Encourages Flexibility in Initial SEC Reporting Requirements

In a CPICSECComment_033111 comment letter filed in response to a regulatory proposal by the Securities and Exchange Commission to increase reporting obligations for investment advisers and others (File No. S7-05-11), the Coalition of Private Investment Companies generally supported the regulator’s need for more detailed informat[...]

WSJ: Hedge Funds Show Optimism

Wall Street Journal reporters Amy Or and Alistair Barr report ( “Hedge-Fund Assets Reclaim Pre-Crisis Level, Aim Higher, March 9, 2011 ) that “hedge-fund assets appear to have not only returned to the level they were at in September 2008 at the height of the financial crisis, but they also are on pace to top out at a record level by year's end. “Two r[...]

Canada’s Regulation Plans Repeal of Short Selling Restrictions

Janet McFarland reports ( "Regulator plans to repeal short-selling restrictions," Globe and Mail, February 25) that Canada's market regulator plans to repeal restrictions that prohibit short selling in falling markets, but will not introduce the same limits recently adopted in the United States. "The Investment Industry Regulatory Organization of Canada (IIROC) ha[...]