NEWS

In an interview with the Financial Times (“Europe Needs a Stronger Corporate Bond Market,” July 9), the head of France’s securities regulator said more constraints, rather than a ban, consistently imposed throughout the EU would address naked short selling problems.

“Banning short-selling is politically on the table but technically it is not possible and inefficient if it is not handled at a European level. We also need to regulate the use of credit default swaps to ensure it does not have a disproportionate impact on the market,” said Jean-Pierre Jouyet, chairman of the Autorité des Marchés Financiers.

“Rather than a ban, Mr Jouyet argued for rules to constrain short-selling, which usually involves selling borrowed stock in the hope of buying it back later at a lower price and pocketing the difference. He favoured requiring short sellers to have access to the shares they planned to use to cover their bets, mandatory settlement of short sales within three days and strict enforcement of defaults,” the Financial Times reported.