The CNMV, Spain´s stock market regulator, did not rule out yesterday the possibility of re-engaging a ban on short-selling Spanish stocks. "The CNMV is ready to consider, if the situation calls for it, a new ban. But it would do so only under the supervision of the European Securities and Markets Authorithy (ESMA), because if outside of its scope, the ban wouldn?t make any sense," said CNMV president Julio Segura in front of the Economic Comission for Competition, a special group of Spain´s congress. Yesterday the CNMV presented its annual report in front of this group.
The possibility of reinstating the ban comes three months after the CNMV, together with authorities from France, Belgium and Italy, lifted the previous ban on short positions that it had held in place from August 2011 until February 2012. Julio Segura said that during this period "the measure contributed to reducing credit risk indicators and share price volatility for implicated firms." But it also generated adverse effects such as reducing liquidity and deal volume that had a negative impact on how the markets functioned.
Short-selling has a significant impact on the stock prices in Spain. Falling prices have forced some companies to ask the CNMV to publish the names of those who offer and buy short positions for Spanish stocks. The CNMV vice president Fernando Restoy to declare that "this it would be reasonable to require publish the names of people who take short positions greater than 0.5% of any given company?s capitalization level."
Bankia´s Role
Bankia´s IPO and its subsequent plunging share price are other points that attracted a lot of attention. Julio Segura defended the CNMV´s role in the Bankia IPO last year and maintained that its decisions contributed to mitigating investor losses.
