New rules requiring reporting of short sales

New rules requiring reporting of short sales, Distrust of TrumpOslo Børs.Photographer: Stein Henningsen

The Ministry of Finance is working on new legislation that will require investors who short sell shares on a large scale to  report this.
The objective of getting reports on these positions is better transparency in the market. According to Dagens Næringsliv the new rules will take effect at the beginning of 2017.
–  Investors will be required to report to supervisory authorities of positions that exceed 0.2 percent of the value of an individual company’s share capital. If the short position exceeds 0.5 percent, the authorities will disclose this to the market,  Chief Financial Supervisory Authority section for securities regulators writes in an email to the newspaper.
In other words,  this means that the investors themselves have report to the authorities if they exceed the limits.  A complete register of shares that are lent out at any time will not be made. Today, the volume of short sales in a share is not publicly known in the Norwegian market.
Short selling means sell borrowed stock with the intention of buying them back when the rates have fallen.
In recent days, the share price of the rig company Seadrill skyrocketed, which has been explained by several investors who have gambled on the rates falling, needing to buy shares when the rates rose in order to prevent big losses.

 

Source: NTB scanpix / Norway Today

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