On February 13, 2012, the Belgian financial regulator, the Financial Services and Markets Authority (FSMA) has amended the rules governing short selling of shares issued by certain financial institutions listed on Euronext Brussels and in related derivatives. Significant net short positions in Belgian financials are now no longer prohibited but are subject to a reporting obligation.
According to the FSMA, the new short selling rules are inspired by the Regulation of the European Parliament and of the Council of the European Union on short selling and certain aspects of credit default swaps that will enter into force on 1 November 2012 and enable a gradual transition from a temporary to a permanent system of rules on short selling.
The Belgian short selling measures now consist of the following rules:
The exemptions to the short selling restrictions provided for in the list of questions and answers published by the FSMA remain in force. For further information: please consult the website of the FSMA.
- Prohibition of transactions in shares issued by certain financial institutions (Dexia SA, Ageas NV/SA, KBC Groep NV, and KBC Ancora CVA) without appropriate coverage;
- Disclosure of net short positions representing an economic interest in excess of 0.25 per cent of the capital of one of the financial institutions to the FSMA and the market. As long as the net short position exceeds the 0.25 per cent threshold, any changes of 0.01 per cent or higher must be disclosed to the market and reported to the FSMA. If the net short position falls below 0.25 per cent, a final disclosure and reporting is required. "Net short position" means a short position on one of the relevant issuers that is not or not entirely compensated by a long position on the same issuer. Investors must take into account all financial instruments relating to an issuer that give rise to an exposure, whether direct or indirect, in the equity share capital of the relevant issuer; and
- A requirement for qualified intermediaries to take reasonable measures to ascertain that their clients have appropriate coverage for their proposed transactions.