E.U. Net Short Position Threshold

E.U. Net Short Position Threshold

On 16 March 2020, ESMA issued decision on net short position holders.

  • ESMA issued a decision temporarily requiring holders of net short positions in shares, traded on EU regulated market, to notify NCA if the position reaches or exceeds 0.1%.

Lower 0.1% Notification

  • 0.1% is calculated based on issued share capital, after entry into force of the decision.
  • Lowering threshold is considered a precautionary action that, under the exceptional circumstances, is essential for authorities to monitor developments in equity markets.
  • Current circumstances constitute a serious threat to market confidence in EU, and the proposed measure is appropriate and proportionate to address the current threat.


  • Measure applies immediately, requiring net short position holders to notify NCAs of relevant positions as at the close of the trading session on Monday, 16 March 2020.
  • Obligations apply to any natural or legal person, irrespective of country of residence.
  • Do not apply to shares admitted to trading where the principal venue for the trading of the shares is located in a third country, or for market making or stabilization activities.
  • ESMA in coordination with NCAs, continues to monitor developments due to COVID-19.
  • Can take more stringent action for orderly functioning of markets, stability, investors.

NLD AFM Statement

  • NLD AFM noted that after consultation, the European stock exchange supervisors have decided to lower the threshold of the notification requirement of a short sell position.
  • European stock exchange supervisors, including AFM, have issued a joint statement.
  • In Europe, the regulation currently applies that net short selling positions of more than 0.2 percent must be reported; this has now been lowered to a 0.1 percent threshold.
  • Measure will take effect immediately for period of three months and can be extended.
  • AFM has a direct line with Euronext and other trading platforms, and with regulators.