Temporary Regulations Concerning the Notifying of Short Positions

The short selling prohibition has been repealed, effective from 1 June 2009. Because vigilance remains of the essence, the AFM has implemented a new, temporary measure. Under this new measure, short positions in Dutch financial institutions must be reported to the AFM.

The reactions of market parties to the consultations held by the AFM in February 2009 underlined the importance of short selling to the trade and the proper functioning of the financial markets. Therefore, the AFM has decided that the prohibition should not last longer than necessary.

The FSA, the supervisory authority for the main capital market in Europe, has already abolished its ban on short selling. Temporary measures against short selling, less stringent than those in the Netherlands, still apply in other European countries. These measures will also end shortly. The AFM expects that more countries will shortly end their national measures.   

The current conditions on the financial markets demand vigilance. That is why the AFM still adheres to a notifying obligation concerning significant short positions. The majority of the respondents to the AFM consultation meeting supports this obligation to report short positions. The notifying obligation enables the AFM to keep an eye on short positions, and makes relationships between short positions and manipulative strategies transparent.   

To limit the administrative burden, short positions should only be reported to the AFM from 1 June if certain threshold values are reached, exceeded or undershot. The notifying obligation will be effective until 1 January 2010. Both the duration and the contents of the measure may be changed before expiry of the term. 

In addition, the AFM aims to improve the transparency of long-term short positions. The British supervisory authority FSA and the French supervisory authority AMF have already presented proposals for permanent measures that improve the transparency of short positions. Within the CESR framework the AFM will remain focused on achieving international convergence of future measures that improve the transparency of short selling.     

On the right-hand side you may download a PDF-file of the ‘Temporary Regulations Concerning the Notifying of Short Positions'.

The AFM has set out answers to frequently asked questions:
Frequently Asked Questions regarding the measure concerning short selling

The AFM promotes fairness and transparency within financial markets. We are the independent supervisory authority for the savings, lending, investment and insurance markets. The AFM promotes the conscientious provision of financial services to consumers and supervises the honest and efficient operation of the capital markets. Our aim is to improve consumers’ and the business sector’s confidence in the financial markets, both in the Netherlands and abroad. In performing this task the AFM contributes to the prosperity and economic reputation of the Netherlands.

The AFM is committed to promoting fair and transparent financial markets.

As an independent market conduct authority, we contribute to a sustainable financial system and prosperity in the Netherlands.

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