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Eurex Clearing
By means of the German Abusive Securities and Derivatives Trades Prevention Act from July 21, 2010, a ban on naked short sales in certain shares and government bonds was introduced (§ 30h of the German Securities Trading Act, WpHG). At the same time, credit institutions have been obliged to report facts which justify suspicion of a violation of this ban immediately to the German Federal Financial Supervisory Authority (BaFin) according to § 10 WpHG.
With respect to the ongoing monitoring of the ban on naked short sales by BaFin in accordance with § 4 para. 1 and para. 2 WpHG, BaFin notified Eurex Clearing AG (ECAG) in a letter from December 15, 2010 that according to BaFin’s legal conception a default in delivery in connection with orders in securities might justify the suspicion of a naked short sale pursuant to § 30h WpHG. Particularly in case of transactions in aforementioned securities which have not been settled after the contractual settlement day (SD) plus ten business days (SD+10), the necessity of reporting a suspicious transaction in accordance with § 10 para. 1 WpHG is given.
On the grounds of its notification from December 15, 2010 and with immediate effect, BaFin expects ECAG to report on a weekly basis such transactions in securities within the meaning of § 30h WpHG as suspicious.
Legal exemptions from the ban on naked short sales (§ 30h para. 2 WpHG) will not be considered for the reporting.