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Short selling of securities means any sale of the share or debt instrument which the seller does not own at the time of entering into the agreement to sell, including such a sale where at the time of entering into the agreement to sell the seller has borrowed or agreed to borrow the share or debt instrument for delivery at settlement. Regulation (EU) No 236/2012 of the European Parliament and of the Council of 14 March 2012 on short selling and certain aspects of credit default swaps (hereinafter – the Regulation) lays down the disclosure requirements for net short positions. |
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For the purposes of the Regulation, a long position means a sale of securities already held, while a short position means a sale of borrowed securities with a view to buying them back at a lower price. A net short position occurs when the sum of all short positions minus the sum of all long positions produces a negative value.
The purpose of notification of net short positions is to provide competent authorities and the European Securities and Markets Authority (ESMA) with data on net short positions whose size may increase the risk of settlement failure and volatility.
Transparency requirements
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Two-tier disclosure requirements for significant net short positions in shares
A two-tier disclosure model is used for net short positions in shares (Articles 5 to 6 of the Regulation):
- when the threshold of 0.1% of the issuer’s issued share capital is reached (0.2, 0.3, 0.4, 0.5, 0.6, etc. percentage change either upwards or downwards), Lietuvos bankas must be notified of the position;
- when a higher threshold of 0.5% of the issuer’s issued share capital and any 0.1% above is reached, such a net short position must be disclosed to the public. Information on net short positions exceeding the threshold of 0.5% of the issuer’s issued share capital is disclosed on the website of Lietuvos bankas (see "Public disclosure of significant net short positions" below).
ESMA has prepared and published information explaining how to notify net short positions when the relevant threshold is crossed.
One-tier disclosure requirements for significant positions in sovereign debt
Significant net short positions in sovereign debt must be reported to Lietuvos bankas only. The requirement to disclose this information publicly does not apply. Notification thresholds calculated in accordance with the criteria laid down in Article 21 of Commission Delegated Regulation (EU) No 918/2012 of 5 July 2012 supplementing Regulation (EU) No 236/2012 of the European Parliament and of the Council on short selling and certain aspects of credit default swaps with regard to definitions, the calculation of net short positions, covered sovereign credit default swaps, notification thresholds, liquidity thresholds for suspending restrictions, significant falls in the value of financial instruments and adverse events are set for each sovereign debt issuer.
Public disclosure of significant net short positions
There are currently no significant net short positions.
| Position holder | Name of issuer | ISIN | Net short position (%) | Date position was created, changed or ceased to be held (dd/mm/yyyy) |
|---|---|---|---|---|
| - | - | - | - | - |
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Procedure for notification of net short positions
Information must be provided to Lietuvos bankas by completing form of notification of the net short position held.
For more information on the requirements for notification of net short positions, disclosure forms, questions and answers on the application of the Regulation, please refer to the Interactive Single Rulebook published by ESMA.
Liability for breaches of the provisions of the Regulation is laid down in the Republic of Lithuania Law on Markets in Securities.