ESMA · ESMA_QA_1942 Answer Published

Shares - Restriction on uncovered short sales in shares and instruments giving claims to as yet unissued shares (subscription rights, convertible bonds)

Name: Shares - Restriction on uncovered short sales in shares and instruments giving claims to as yet unissued shares (subscription rights, convertible bonds): ESMA Q&A — EU Financial Regulatory Q&A
Creator: European Securities and Markets Authority
License: https://creativecommons.org/licenses/by/4.0/

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

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Question

To what extent are instruments which give claims to as yet unissued shares (subscription rights, convertible bonds) affected by the restriction?

Answer

[ESMA70-145-408 SSR Q&A, Q&A 10.5] According to Article 12(1) of the Regulation, the provisions of the restriction on uncovered short sales of shares relate only to shares admitted to trading on a trading venue. That means that transactions in instruments such as subscription rights and convertible bonds e.g. performed as part of a capital increase do not fall within the scope of Article 12(1) of the Regulation.

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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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