Germany, Italy and Netherland are preparing to ban short selling on specific companies

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by JealousEntrepreneur

Just a FYI if you are or going to short european stocks before brexit.

Germany, whose Frankfurt stock market is one of Europe’s largest, is the most significant of a group of countries to consider such a temporary ban on short-selling of shares, including Italy and the Netherlands.

Although no emergency measures have yet been triggered, the preparations underscore the continent’s heightened state of alert, with negotiations to secure Britain’s orderly departure from the European Union hanging in the balance.

In the event of a slide in markets, authorities in Frankfurt, Amsterdam and Rome could curb the form of trading known as short-selling, officials in those countries told Reuters, in order to stem any exaggeration of price swings.

Many bankers, however, fear that failure to clinch agreement this week could rattle markets far sooner.

Germany’s markets regulator BaFin would probably identify a basket of companies particularly vulnerable to the economic fallout of Brexit for a temporary short-selling ban, a second person with knowledge of the matter said.

Germany has done so before. During the financial crash last decade, BaFin singled out a number of banks and other companies to stop short-selling in those stocks.

A decision to enact a ban would be taken at short notice, depending on market developments, the person said.




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