NEWS

The Securities and Exchange Commission published the revised Form ADV.

The European Securities and Markets Authority today (November 16) published its final guidance for rules to implement the Alternative Investment Fund Managers Directive (AIFM).
From ESMA’s press release summarizing the four broad areas AIFM addresses:

1. General provisions for managers, authorisation and operating conditions
The first part (p.16-135) of the advice clarifies the operation [...]

Following the Securities and Exchange Commission’s approval today of rules imposing reporting requirements on private investment companies, in compliance with Dodd-Frank, and thereby enhancing regulators’ ability to monitor systemic risks, the Coalition of Private Investment Companies issued the following statement:
“In testimony on Capitol Hill and in comment letters to the Securities and Exchange Commission, the [...]

The Securities and Exchange Commission will meet Wednesday, October 26, to consider whether to adopt a rule requiring advisers to hedge funds and other private funds to report information for use by the Financial Stability Oversight Council in monitoring risk to the U.S. financial system.
“Under the version of the [...]

EU policymakers are close to a deal that would ban naked credit default swaps for sovereign debt. Announcement expected next Tuesday, October 25.
Some big hurdles must be jumped over to complete the whole package, including: the “generosity” of the exemptions; opt out by national regulators for short periods; and, the definition/process for determining [...]

A recently published study the staff at the Federal Reserve-New York ( “Market Declines: Is Banning Short Selling the Solution” ) finds that the bans on short selling filed to lift prices, as the regulators intended, and instead increased liquidity costs while imposing other adverse effects on market participants.
“Our cross-sectional tests suggest that the [...]

Bloomberg reports (“Shorting Bans Do Little to Help Europe Banks, Instinet Says,” October 3, 2011) that “financial stocks subject to rules restricting short sales in France, Italy, Belgium and Spain have behaved about the same as banks in European countries with no such prohibitions, according to Instinet Inc.”
“The study says prohibiting bearish bets did [...]

In a September 5 letter to lawmakers, the Dutch Finance Minister questioned recent bans on short selling financial stocks by four European Union countries in late August, saying he was “not particularly worried” about recent market volatility, which he said the restrictions would not quell.
Noting the “useful role” of short selling in the pricing and [...]

In late August, the European Securities and Markets Authority published its second “consultation paper” on the Alternative Investment Fund Managers Directive outlining proposals for rules on supervision and third-country entities (including access to EU-based markets and investors). Public comment is due by September 23. ESMA plans to deliver its final advice to the [...]

Belgium, France, Greece, Italy, and Spain extended their bans on European bank stocks until the end of September.
For details:
Belgium
http://www.fsma.be/en/OtherNews/Article/press/div/2011-08-25_shortselling.aspx
France
http://www.amf-france.org/documents/general/10122_1.pdf
Greece
http://www.hcmc.gr/photos/anakoinoseis/files/25.8.2011_Press_Statement_short%20selling.pdf
Italy
http://www.consob.it/mainen/press_release/comunicato_20110825.htm
Spain
http://www.cnmv.es/Portal/AlDia/Comunicaciones.aspx?lang=es
The Financial Times (“European Shorting Ban Extended,” August 25) reported that, “Dealing in the banned stocks has since dropped 62 percent from its pre-ban spike, according to Bloomberg data. This has however left trading at just three-quarters [...]