Regulatory Panic Spreads As Italy Orders Short Sellers To Disclose Positions

Tyler Durden's picture

The earlier news that Italy's regulator may forbid naked short selling in a desperate attempt to preempt the bond vigilantes from taking down the country's financial system (how shorting stocks prevent evil speculators from selling bonds is somewhat confusing) has been confirmed. But that's just the beginning. The latest twist is that the Consob has also requiring shorts to immediately disclose their short positions "in an effort to increase market transparency." Odd how shorts are never required to be exposed when the markets are surging (or how silver margins have yet to be reduced despite the near 40% price drop in the metal from recent peaks). It gets worse. From Bloomberg: "The European Securities and Markets Authority, which co- ordinates the work of national regulators in the 27-nation EU, should be given emergency powers to temporarily ban short selling or trades in CDS on sovereign debt in the EU, the Parliament said. The Italian regulator said short sellers must disclose their net positions when they reach 0.2 percent or more of a company’s capital and then make additional filings for each additional 0.1 percent."

Full Google translated announcement from the Consob is below (source).

Short sales: shoot from tomorrow the obligation to inform Consob bearish positions

Consob has approved a new regime of transparency regarding short selling.

From tomorrow, investors who hold important positions on bearish equities traded on Italian regulated markets are required to give notice to Consob.

With this, the Italian legislation is in line with that in force in major European countries, primarily Germany The measure strengthens the supervisory powers of Consob in the current market, characterized by a high level of volatility in the fortunes of quotations.

In particular, must be disclosed to Consob on its net short positions in equity securities of listed companies in Italy, when they exceed certain thresholds. The first obligation of communication triggered the achievement of a net short position greater than or equal to 0.2% of the capital of the issuer. Subsequently, the obligation is triggered for any variation equal to or greater than 0.1% of the capital.

The measure takes effect from tomorrow and will remain in force until September 9, 2011. The text of the resolution (number 17862) is available on the Consob website www.consob.it.

Pricing obligation to purchase the shares Socotherm (press release dated 1 June 2011)

Consob has set at 0.0683 euro per share consideration for the compulsory purchase, pursuant to art. 108, paragraph 2 of the FCA, the ordinary shares by Socotherm Fineglade Limited.

On the occasion of the capital increase resolved by the issuer's board of directors on June 25, 2010 Fineglade Limited has signed, at a price of 0.0683 euros, 732.45 million new ordinary shares of Socotherm, 95% of the share capital by which has achieved the obligation to purchase the remaining shares Socotherm.

The title The Group is indefinitely suspended from trading since August 4, 2009 in view of the uncertainties on the economic, financial and property of the company, at the time, was found in the situation envisaged by art. 2447 Civil Code (Reduction of share capital below the legal limit).

The pricing was carried out in accordance with the guidelines prior to Resolution No. 17 731 of 5 April 2011 and, in particular, with Article 50 of the Issuers Regulation. In line with previous determinations, such as additional parameter to those expressly mentioned by art. 50, paragraph 3, of the Issuers' Regulations - not usable in the case of the test - was used for the price of the subscription of the capital from which comes the tender offer exceed the threshold, as illustrated in the evaluation document. .

Resolution No. 17807 of 1 June 2011 to determine the amount of the obligation to purchase is published in conjunction with Annex assessment document, the site www.consob.it.