• HUN CB announced an amendment to EU reg on short selling positions reporting is in force.
• Investing companies and natural persons must report all net short positions that reach or exceed 0.1% of issued shares of listed company involved in the investment.
• Follows ESMA January 2022 statement on reporting short selling positions.

Overview

• In September 2021 EC adopted reduction in reporting threshold of art 5 EU SSR reg short-term positions (underlying price reductions of underlying financial instrument), credit default swaps from 0.2% to 0.1%; new notification threshold in effect on 31 January 2022
• Last reporting threshold under previous system was last applied on 28 January 2022 and the related reports must be submitted to HUN CB by 3.30pm on the next trading day.
• From 31 January 2022, position holder must notify outstanding net short position equal to or over 0.1% and any further 0.1% (first decimal place) change is subject to reporting.

Key Reporting

• HUN CB must be notified by 3.30pm on 1 February 2022, if parties concerned did not have a net short position of 0.2% or more at 28 January end, their net position hits/exceeds 0.1%.
• Or if they had net short position of 0.2% or more at 28 January end, a net short position below either 0.2% or 0.1% threshold at end of 31 January, goes or its 1st decimal place changes up or down; HUN CB also refers to ESMA statement on the matter.
• Note will help determine whether net short positions need to be reported when new regulation enters into force via illustrative example of reportable net short positions.
• Notification threshold applies to both natural and legal persons; HUN CB to monitor and, if needed, investigate short transactions resulting in abnormal market conditions.

Effectiveness

• Reporting duties start on 1 February 2022 per EU SSR reg effective on 31 January 2022.