Europe: derivatives, credit default swaps and short selling - legislative proposals published

The European Commission today published a proposal for a Regulation on OTC derivatives, central counterparties and trade repositories: see here (pdf). Further details are available in the Commission's press release and in the background information available here.

The Commission has also published a proposal for a Regulation on short selling and credit default swaps, one of the purposes of which is to increase transparency: see here (pdf). Further details are available in the Commission's press release and in the background information available here.

With regard to naked short selling, the Commission is proposing, subject to certain exemptions, that to enter a short sale, an investor must have borrowed the instruments concerned, entered into an agreement to borrow them, or have an arrangement with a third party to locate and reserve them for lending so that they are delivered by the settlement date.