EU considers crackdown on short-selling following GameStop saga
Ugo Bassi, director of Financial Markets in the European Commission’s DG FISMA (Financial services), said today the EU may consider tweaking disclosure rules for short selling to create more transparency.
During a meeting of the European Parliament’s committee on economic and monetary affairs, he said he could envisage the possibility of lowering the 0.5 per cent level required to disclose short positions.
Bassi also said that the EU may “impose disclosure not only towards the regulator but also publicly, not every day, but at least once a week or once every fortnight. The more we bring everything into the light, and in particular short-selling… that could possibly help.”
The increased attention towards short-selling follows the GameStop saga where equity markets were overrun by retail investors who led an online campaign, organised on Reddit, to punish investors who were shorting GameStop. The campaign eventually led GameStop’s stock to rise over 2,700 per cent.
European short positions are generally far lower in Europe than in the US and Steven Maijoor, the European Securities and Markets Authority chair, said at the same meeting that this “limits the risk of a GameStop-style short squeeze” in Europe.