BERLIN (MNI) – Germany’s upper house of parliament, the Bundesrat
representing the 16 states, likely won’t vote before the summer recess
on the federal government’s bill to ban uncovered short-selling, a
senior official from a state government belonging to the political camp
of Chancellor Angela Merkel said Thursday.
“The deadlines don’t allow it to vote on the bill by July 9,” the
last Bundesrat session before the summer recess, the source said.
Federal Finance Minister Wolfgang Schaeuble said Wednesday he hoped
to convince parliament to agree to speed up the deliberation process in
order to get the bill approved before the summer break.
“We haven’t had such a request yet,” the state official said.
The government bill on banning uncovered short sales requires the
approval of both houses of parliament. Merkel’s CDU/CSU-FDP coalition
wields a majority in the lower house of parliament, the Bundestag, but
recently lost its majority in the Bundesrat. However, the upper house
could only delay the bill but not block it indefinitely.
The bill would ban naked short-selling on all shares of German
businesses listed on German exchanges. Moreover, uncovered short-selling
would be prohibited on all bonds issued by Eurozone federal, regional or
The bill also stipulates the prohibition of credit default swaps on
government bonds of Eurozone states if there is no demonstrable hedging
The Finance Ministry would be authorized to grant exemptions to
these bans in order to prevent, for example, damage to the benchmark
role of German bonds.
The Finance Ministry, along with the financial watchdog agency
BaFin and the Bundesbank, would be empowered to prohibit currency
derivatives on the euro which have no hedging purpose, as well as
derivatives that emulate short-selling of German shares and Eurozone
The bill also introduces a two-stage system of transparency for
more significant 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.
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