One of the biggest stories rocking the financial markets in 2015 was the culmination of the Greek financial crisis, which brought the country on its knees and on the verge of a Grexit from the Eurozone which would have pushed the monetary union into perilous and unchartered waters.
And although things may appear to have quiet down after Greece stroke a deal with its lenders and it seems to be fulfilling the pre-requisites and receiving its adjustment program loan installments to help it remain afloat, in reality the repercussions of the Greek drama are still evident.
In this framework and recognizing that “adverse developments which constitute a serious threat to market confidence in the Greek market still persist,” the European Securities and Markets Authority (ESMA) has decided to issue an official opinion by which it agrees to an extension of the emergency short selling prohibition by the Hellenic Capital Market Commission (HCMC) on the shares of certain credit institutions under the Short Selling Regulation.
The previous similar ban in place expired at 24:00:00 (CET) on Monday 21 December 2015 and ESMA announced that it believes that its extension until 24:00:00 (CET) on 11 January 2016, constitutes an appropriate and proportionate measure in order to address the threats to market confidence still present in Greece.
More specifically, the ban concerns the prohibition of short sales in any shares of Attica Bank S.A. (ISIN GRS001003011) admitted to trading on the Athens Exchange, irrespective of the venue where the transaction is executed. According to the ESMA announcement this temporary day would include sales of shares covered by subsequent intraday purchases, while it would apply to all depository receipts (ADRs, GDRs) and warrants representing shares of Attica Bank S.A. (ISIN GRS001003011) admitted to trading on the Athens Exchange. As for previous bans, an exemption for market making activities in the affected financial instruments would be foreseen.
Finally, ESMA also points out that the short selling measure applies to any natural or legal person, irrespective of their country of residence, but would be subject to the exemption for market making activities, provided that short selling transactions are conducted for hedging purposes.