Amid heightened international market volatility, ESMA, the EU’s regulator, announced late on Thursday that France, Belgium, Spain and Italy have banned short selling in an attempt to curb rumours and halt the precipitous fall in value of troubled EU banks.
In Spain and France the ban will last 15 days and is only applicable to stocks in the financial sector. Financial institutions included BNP Paribas SA, Société Générale SA and Crédit Agricole SA in France, and Banco Santander and Bankia SA in Spain.
Belgium’s ban is restricted to four financials only and no concrete time duration was given. It was unclear which stocks would be affected and how long the ban would be in place for Italy.
The prohibition which begins on Friday was imposed by ESMA in an effort “to restrict the benefits that can be gained from disseminating rumours, false and misleading news,” the regulator said.
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