Greece

New Temporary Short Selling Bans Introduced by Spain, Italy and Greece

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On July 23, Spain, Italy and Greece introduced new temporary bans in relation to short selling in response to the recent extreme volatility in the European financial markets.

The Comisiòn Nacional del Mercado de Valores (“CNMV”) has decided to ban short selling on Spanish regulated markets with immediate effect. The ban will apply for three months until October 23, although CNMV may choose to extend it for a further period.

The Commissione Nazionale per le Società e la Borsa (“CONSOB”) announced a ban on short selling in respect of shares of certain companies in the Italian banking and insurance sectors that will last from July 23 to July 27.

In addition, on July 24, Greece’s Hellenic Capital Market Commission (“HCMC”) announced an extension to the current short selling prohibition on the Athens Stock Exchange for an additional three months until October 31. Press Release.

For further details, please see updated version of the European Securities and Markets Authority (“ESMA”)’s table of members’ short selling measures. Updated Version.

Eurozone Crisis Continued – Second Greek Bailout package, etc.

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The Eurozone crisis continues to dominate the headlines with the IMF approving its €28 Billion contribution to a second bailout package for Greece on 15 March 2012. Click here to read the IMF Press Release.
As suggested in our December 2011 Client Briefing Eurozone Crisis: Will Europe Win the Battle? – Practical Advice to Address Your Redenomination Risks, we are now seeing a subtle shift in the position of market participants towards the consideration of the implications of either the exit of one or more of the member states or alternatively, albeit more unlikely, the complete collapse of the Euro. It is not surprising given the current news backdrop that a number of counterparties are considering their financial and legal redenomination risks, including a consideration of their LMA-based facility agreements and change of currency clauses and the knock-on effects of an amendment to such clauses within loan arrangements.