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.

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Caviar Emptor's picture

Stock and Bond trading will only be allowed if banksters can win. Any violaters will be shot on sight. Now, don't you wanna buy a little paper from us, little boy? 

tom a taxpayer's picture

Breaking News: At 3:40 PM EST, two C-135 Stratolifters departed Andrews Air Force for Rome, Italy. The giant aircraft are loaded with 1,000 TSA agents on emergency loan to the Italian government. The mission of the TSA agents is to perform full body searches of short sellers to insure full disclosure of short positions in Italian bonds and stocks.

cossack55's picture

they will be looking at shorts all right. 

SilverIsKing's picture

Perhaps this is the way to find out who will be rich when the market collapses so the politicians know whose dicks to suck.

Thomas's picture

It will be easy because they are already naked. BTW (and more seriously) the article does not seem to clearly distinguish short selling from naked short selling. Huge difference since the latter is already illegal.

hbjork1's picture

Right!  But it requires work by the regulators to put a hold on the large naked positions.  Illegal naked short selling of low priced issues was the game early in the last decade but it a change in command at the SEC was necessary before it was finally enforced.  It took about ayear before the naked issues the SEC [program was fully sucessful 

.  

aminorex's picture

Naked short selling is only illegal if you lack a market making desk.  Investment banks can naked short all day.  If the prop desk wants to short without capital, he can just ring his buddy and scratch another line on the monitor bezel.

 

Urban Redneck's picture

"Stock and Bond trading will only be allowed if banksters can win."

How are banksters not profiting by taking down Italy, and then profiting again in the future on the backs of the next taxpayer subsidized bailout?

Or does Mrs. Watanabe have a direct line to the institutional debt desks?

Top_Kill's picture

Disclosure...wouldn't it be nice if they implemented this at the CME for silver!

Caviar Emptor's picture

They won't because the banksters would lose (JPM). We can only have deals where they win by executive order. If you are not satisfied please proceed to the office of the Directorate of Secret Police

Cognitive Dissonance's picture

I love the smell of panic in the morning.

It sort of smells like soiled diapers Depends©.

cosmictrainwreck's picture

I think that's a TM, Cog, not a C.....all depends, I guess

Cognitive Dissonance's picture

Yup.

I just checked the pair I'm wearing and it's definitely a 'TM'.

My bad. :>)

SwingForce's picture

Oh, too bad. "The WORLD is My Toilet" -GWAR

Hephasteus's picture

There has to be a joke here. Does a pope shit in the bond market? Or something...

snowball777's picture

Now that's what I call being prepared for the new economy.

Sudden Debt's picture

It provides a talking subject during the morning coffee.

 

Mae Kadoodie's picture

Why even bother with these markets?

Racer's picture

Never blame the actual thing that is wrong, blame those who see it is wrong

FinalCollapse's picture

"Never blame the actual thing that is wrong, blame those who see it is wrong"

Sun Tzu,

after shitting his pants


carbonmutant's picture

Why would a culture of corruption disclose anything?

disabledvet's picture

absolutely. and those that comply would be fools would they not?

trampstamp's picture

What sore losers! So it's okay to tear a new asshole on investors that short a stock when there is a rally, but as soon as the bull investors sees a major loss in their positions  oh no.... you shorters have to let us know your shorting positions so we can overrun and rape you. What ass wipes! I'm not a perma-bear, I go both ways, but this time they have gone too far.

HungrySeagull's picture

I think the Powers that be are now in a state where they must be truly in a panic trying to contain the cesspool's stink and all from wafting across the fields of profits to the city where the starving bears think to run the river's salmon that is coming in for them after many a moon wait to profit.

jbc77's picture

I agree, the banking cartel at this point must be in utter panic mode. They know it's a matter of time, there just putting off as long as possible. It's surreal to watch this unfold.  They will do and say anything to keep the ponzi going. I just hope one day we get to watch them burn.

Popo's picture

The Titanic has already hit the iceberg. All these measures aimed at keeping order are futile. The boat is sinking. At some point, no matter what, the scramble for lifeboats will and must begin.

Got popcorn? The show is just starting. And like any burning theater scenario, those who panic last -- die.

PaperBear's picture

Of course you should market transparency. What's the alternative ? Someone has a balance sheet that has got 'goat poo' for assets and/or liabilities up the yazoo.

macholatte's picture

OK. So is this how it goes, how history rhymes?

>> short the euro, crises abates, short the dollar, next crises (Spain or Portugal?) short the euro, crises abates, short the dollar, next crises....

mynhair's picture

Sending an email to Conslob claiming 1% short in Assgen, just to dick with them.

Done.

(Used TCT's email address.)

cahadjis's picture

Mynhair, you've been coming up with the best ideas since your MW days...

I'm doing the same.

jbc77's picture

This stuff is unreal. Just change the rules when they don't suit you. I really hope in the end Europe blows sky high. I am going to enjoy very much watching these liars suffer defeat. I'm a patient man, I just hope in the end they get whats coming to them. How much longer can this go on? You wouldn't think bailing wire and chewing gum would hold this long.

HungrySeagull's picture

I used a shoelace once to bypass a system failure inside my Rig. It got me out of trouble just long enough to save the load and reach safe haven so repairs can be made.

gorillaonyourback's picture

bailing wire is pretty tough, bending it back end forth breaks it.  so this might be italy's first bend over, it might take 2 3 4 times bent over.  It takes longer for greece bailing wire cuz it has a unique affinity to being bent over and liking it.  Poor dumbass irelands gets bent over over and can't quite figure out which way the turd is goin.  Portugals bailing wire is now in a quality control testing lab being bent over tested for its integrity results due in the next few weeks

MacGruber's picture

If you sit by the river long enough, you will see the body of your enemy float by. -Japanese proverb

luigi's picture

Is a Chineese one: in this case you could as well be caught by a sudden flood wawe while sitting on the river's bank...

equity_momo's picture

Smells like the next collapse is approaching. Final kick of the can for Europe coming up.

Grease Mokey's picture

right so  lets beat on the shorts and and play the blame game when the markets makes make sense and do what they were designed to do go UP and DOWN,(but if they go down too much we need to start our witch hunt). This bring to mind that old foolish rule "mark to market" what a joke that was, glad we got rid of that......

Saxxon's picture

This is what the cocksucking politicians always do.  Is anyone really surprised?  They run the shorts up the flagpole.  Is it not obvious that, as a breed, they suck ass.

partimer1's picture

It's always the "surprise" that shocks everyone. At the height of crisis of 2008 when everyone was looking at LEH, it was the AIG that turned out to be or chosen to be the worst. If things turn out to be as planned, it is not crisis.