ESMA · ESMA_QA_1938 Answer Published

Covering a short sale with an agreement entered into by another legal entity of the same group

Regulation
Short Selling Regulation (SSR) Regulation (EU) No 236/2012
Topic
Uncovered short sales
Submitted
2012-09-13
Answered
2012-09-13

Question

Can a legal person within a group enter into an uncovered short sale provided that another legal entity within the same group has fulfilled one of the conditions set out in Article 12(1) of the Regulation with regards to the same instrument?

Answer

[ESMA70-145-408 SSR Q&A, Q&A 10.1] No, short sales cannot be covered with an agreement, pursuant to Article 12(1) of SSR, entered into by another legal entity within the same group. The same entity carrying out the short sale has indeed to cover it with an agreement pursuant to Article 12(1) of SSR, including a locate agreement concluded with another legal entity within the group.

This Q&A is published by European Securities and Markets Authority and is non-binding. It does not constitute legal advice. Updated weekly from official ESA sources.

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