BERLIN (MNI) – The German government’s bill on permanently banning
uncovered short selling of certain assets passed a key parliamentary
hurdle on Monday.
The financial committee of the Bundestag, the lower house of
parliament, approved the bill today, making it almost certain that the
Bundestag will pass it on Friday.
“We’re aiming to have the Bundesrat [the upper house representing
the 16 states] voting on the bill then on July 9,” said Leo Dautzenberg,
the parliamentary financial speaker of Chancellor Angela Merkel’s
CDU/CSU-FDP government coalition. The Bundesrat can only delay the bill,
but not block it indefinitely.
The bill foresees a ban of naked short selling on all shares of
German businesses listed on German exchanges. Moreover, uncovered short
selling is to be prohibited on all bonds issued by Eurozone federal,
regional or local governments.
The bill also stipulates the prohibition of credit default swaps on
government bonds of Eurozone states if there is no hedging purpose
detectable.
The Finance Ministry is to be authorized to grant, via a statutory
order, exemptions to these bans to prevent, for example, that the
benchmark role of German bonds suffers.
Furthermore, the financial watchdog Bafin, together with the
Bundesbank, is to be empowered to temporarily interdict, via statutory
order, currency derivatives on the euro which have no hedging purposes,
as well as derivatives which emulate short selling of German shares and
bonds of Eurozone governments.
However, the parliamentary financial committee scrapped the part of
the bill today, which would have authorized the Finance Ministry to
interdict these derivatives permanently via a statutory order.
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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