ESMA agreed with European regulators to renew short selling prohibitions because of the COVID-19 crisis

The European Securities and Markets Authority (ESMA) has given its thumbs up for Austrian, Belgian, French, Spanish and Greek regulators’ decision to continue to limit short selling because of the coronavirus.

The restrictions will also affect similar transactions. The emergency measures were first put in place in March by the Finanzmarktaufsicht (FMA) of Austria, the Financial Securities and Markets Authority (FSMA) of Belgium, the Autorité des Marchés Financiers (AMF) of France, the Hellenic Capital Market Commission (HCMC) of Greece and the Comisión Nacional del Mercado de Valores (CNMV) of Spain.

The enforced limitations on trading were supposed to expire in April but will now be in place until May 18, 2020.

Yet, ESMA noted that the measures may be lifted before the deadline if the risks of a loss of market confidence are reduced or may be further extended after the deadline considering market conditions.

“ESMA considers that the proposed measures are justified by current adverse events or developments which constitute a serious threat to market confidence and financial stability, and that they are appropriate and proportionate to address the existing threat to market confidence in those five markets,” ESMA said in a statement.

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