Mon, Feb 20, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

AIMA issues statement on CESR short selling plans - reporting regime greatly preferable to bans, but some changes to proposal still needed

Tuesday, March 02, 2010
Opalesque Industry Updates - “The Alternative Investment Management Association, the global hedge fund industry association, believes that short-selling is a wholly legitimate market practice, is not abusive and helps capital markets function more effectively. We welcome the recognition by the Committee of European Securities Regulators (CESR) that ‘legitimate short selling plays an important role in financial markets. It contributes to efficient price discovery, increases market liquidity, facilitates hedging and other risk management activities and can possibly help mitigate market bubbles’. We also agree with CESR that consistent rules for short-selling throughout the European Union are desirable.

“CESR’s proposed reporting regime is greatly preferable to the bans that were imposed (and then lifted) on short selling. However we think it could be improved in several respects. We note that CESR says that ‘public individual position disclosure should be a central plank of the regime’ but we believe that any reporting of short positions to the market should be in aggregate form only. Aggregate reporting would provide useful information for regulators about short interest in individual stocks but this has not been proposed by CESR. We believe that disclosure of individual positions should be made privately to the regulator and kept confidential in order to prevent potentially serious market distortions for no obvious benefit.

“CESR has set the threshold for reporting requirements too low at 0.2% of the issued share capital of the relevant stock for disclosures to regulators and 0.5% for disclosures to the market. This increases the likelihood that the information gathered will be overly burdensome on hedge fund managers and could swamp regulators with unnecessary information.

“We would also note the recent report from the international management consultancy Oliver Wyman commissioned by the MFA that concluded that the UK rules requiring public disclosure of short positions came at the expense of wider spreads and poorer liquidity in those stocks affected.”Source

kb

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. With $54bn in assets, Philippines is ready for hedge funds, alternative investment products[more]

    Komfie Manalo, Opalesque Asia: With the country's outstanding fund management industry at $54bn and growing, the Philippine market and its investors are ready to invest in "more sophisticated" asset management products, like hedge funds and alternative investments, said Deanno J. Basas, presi

  2. SoftBank to buy Fortress Investment for $3.3bn[more]

    From Reuters.com: Japan's SoftBank Group Corp on Wednesday said it has agreed to buy Fortress Investment Group LLC for about $3.3 billion, looking to add investment expertise as it prepares to launch the world's largest private equity fund. The all-cash deal is SoftBank's first major investmen

  3. ...And Finally - Truth in advertising[more]

    From Newsoftheweird.com: Girl Scout Charlotte McCourt, 11, of South Orange, New Jersey, saw her sales zoom recently when she posted "brutally honest" reviews of the Scouts' cookies she was selling -- giving none of them a "10" and labeling some with dour descriptions. She was hoping to sell

  4. Europe - Brexit - Updated legal guide, Euro exchange rates set to tumble as hedge fund's super computer predicts Marine Le Pen will be next French president, Swiss fund market hits all-time high[more]

    Brexit - Updated legal guide From Herbertsmithfreehills.com: When we began analysing in depth the possibility of Britain exiting the EU (Brexit), 18 months prior to the June 2016 referendum, the business consensus was very much that Brexit was a remote prospect that either would never hap

  5. People - Gramercy appoints Bradshaw McKee as managing director of Capital Solutions, Trump taps Cerberus's Feinberg to lead intelligence review[more]

    Gramercy appoints Bradshaw McKee as managing director of Capital Solutions Gramercy Funds Management LLC, a $5.8 billion dedicated emerging markets investment manager, today announced the appointment of Bradshaw McKee to the position of Managing Director, Capital Solutions and Distressed