BERLIN (MNI) – Germany’s Bundesrat, the upper house of parliament
which represents the 16 states, Friday passed a bill to permanently ban
uncovered short selling of certain assets.
The lower house, the Bundestag, already approved the bill last
week. It can now become law once it is signed by the German President.
The bill bans naked short selling on all shares of German
businesses listed on German stock exchanges. Moreover, uncovered short
selling is to be prohibited on all bonds issued by Eurozone federal,
regional or local governments. Intraday short-selling transactions will
be exempt from the ban.
The bill also prohibits credit default swaps on government bonds of
Eurozone states if there is no hedging purpose detectable.
The Finance Ministry would be authorized to grant exemptions to
these bans to prevent, for example, compromising the benchmark role of
German bonds.
Furthermore, the financial watchdog Bafin, together with the
Bundesbank, is to be empowered to ban, for up to one year, currency
derivatives on the euro which have no hedging purpose, as well as
derivatives which emulate short selling of German shares and bonds of
Eurozone governments.
The bill also introduces a two-stage system of transparency for net
short selling positions on German shares. In the first stage, the Bafin
is to be informed. In the second, short selling positions are to be made
public.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
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