Spain, Italy, Belgium and France issue short-selling bans

On the 03/17/20 at 7:33AM


Adrien Paredes-Vanheule

Spanish financial watchdog CNMV prohibited all short-selling practices for a month effective 17 March 2020.

Spanish and Italian financial watchdogs have renewed bans on short-selling practices on their respective equity markets. Hence, in Spain, CNMV has forbidden market players to build new net short positions in all Spanish shares or to increase existing ones for one month, effective today, 17 March 2020. This ban can be renewed for three-months periods if necessary. In addition to Spanish stocks, the ban also applies to index-linked products, spots, derivatives as well as over-the-counter transactions.

CNMV said the current extreme volatility of European markets due to the Covid-19 outbreak's impact and the risk of distortion in shares' valuations prompted it to implement this one-month ban of short sales. Among other groups, Marshall Wace, Bridgewater Associates, Citadel Europe and AQR Capital Management have currently open short positions on certain Spanish stocks. As at 17 March 2020, Ence Energia y Celulosa was the most shorted company (4.38% of accumulated net short positions), followed by Indra Sistemas (2.82%) and Sacyr (2.08%). Some of the groups have been approached by Asset News for a comment.

In Italy, financial market authority Consob has prohibited short sales on 20 stocks for the trading session of 17 March. The list includes: Azimut, Unicredit, Fiat Chrysler, Mediobanca, Banca Generali, Banca Mediolanum, Ubi Banca, Leonardo, Autogrill, Exor, Telecom Italia, Fiera Milano, SanLorenzo, Dovalue, Cerved Group, OVS, Maire Tecnimont, Marr, Banca Monte Paschi Siena as well as ASTM.

Within this group, Maire Tecnimont was the most shorted stock as of 17 March 2020 with accumulated net short positions of 4.91%, including 1.57% initiated last week by two alternative investment managers. OVS cumulated the second highest amount of short sales at 4.41%. Ubi Banca was third on the list (2.27% of short net positions). Short sellers on the Italian market include Citadel, Bridgewater, Marshall Wace, Winton, Point72, WorldQuant among others.

Consob is thinking of banning short sales for a period of 90 days according to local newspaper Il Sole 24 Ore.

France added to the list on 17 March by pronouncing a short sales' ban on 92 stocks for today's trading session. These 92 listed companies suffered a significant drop in valuation, said local regulator AMF. Belgian peer FSMA has also decided the prohibition of short selling in all shares on Euronext Brussels for the entire trading day of 17 March 2020.

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