The markets are volatile due to the coronavirus. The Austrian Financial Market Authority (FMA) has banned some short-selling to prevent the situation from getting even worse.
FMA explained that all shares admitted to trade on the Regulated Market of the Vienna Stock Exchange (Wiener Börse) and that fall under the competence of the FMA as supervisory authority are affected by this ban.
However, transactions where there is a market making function are excluded from the ban as well as certain transactions in financial instruments that are based on an index or a basket of securities, which track an index.
“Speculative short selling may lead to significant risks in the currently exceptionally volatile global and Austrian market environment,” said Eduard Müller and Helmut Ettl, executive directors at the FMA in a statement. “In the difficult situation caused by the economic impact of the COVID-19 virus pandemic, the stability of the financial markets and maintaining the confidence of investors in the orderly functioning of the markets must have absolute priority. This national measure is therefore both inevitable and appropriate.”
The regulator noted that ideally, it would’ve preferred to see a EU-wide ban prohibiting sales like this, but that an agreement like that could not be reached by the member states.
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