Italian Financial Services Authority, CONSOB, Extend Ban on Short Selling (12/02)

16 January 2012

Introduction

On 12^th August, 2011 the Commissione Nazionale per le Società e la Borsa (CONSOB), the Italian financial service regulator announced a ban on short selling of securities. Subsequently on 11^th November the authorities extended the ban till the 15^th January 2012 (by resolution no. 17992 of November 11, 2011). This has now been extended, once more, until 24^th February, 2012.

The Prohibition

The prohibition is still in force, to take net short positions or to increase existing net short positions.

Examples:

Downward positions;
Calculated as the difference between sale activities and purchase activities;
Considering all financial instruments;
Including derivatives; and
Financial instruments on indexes.

The ban applies to shares of the banking and insurance sectors.

Obligations

Obligation on firms that are still in force without deadline:

To report to CONSOB on relevant downward positions on shares listed in Italy which entered in force on July 10, 2011;
Prohibition of uncovered short sales, i.e. sales not supported by the availability of the shares at the moment of the order; and
The prohibition applies to all shares listed on Italian regulated markets, wherever traded (by CONSOB Resolution no. 17993 of November 11, 2011).

Further Action

The above mentioned extensions, of the restrictive measures on net short positions, has been adopted owing to the current climate of the financial markets. Please note that this information can be modified or revoked depending on the market conditions and in relations to other European authorities.

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