ESMA has published a consultation paper on its draft guidelines in relation to the exemption for market making activities and primary dealer operations under the Regulation on short selling and certain aspects of Credit Default Swaps (the “Regulation”).  Certain market making activities (as defined under Article 2.1 of the Regulation) enjoy exemptions (under Article 17 of the Regulation) from net short position transparency requirements and the restrictions on uncovered short sales.  ESMA is consulting on the scope and definition of market making activities and how the exemption of such activities should be applied in practice.

ESMA’s consultation includes questions on:

• the definition and scope of the exemption for market making activities;
• determination of the competent authority that should be notified;
• the general principles applicable to persons intending to make use of the exemption; and
• the qualifying criteria of eligibility for the exemption.

ESMA invites responses to its consultation paper by October 5.