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Aug 18, 2011

Eurex

Important Information on Short Selling Ban

Last week a number of national supervisory authorities in Europe released short selling bans which differ from one another both in content and scope of application. These bans also deviate, in some parts substantially, from existing German regulations. Since July 2010, a ban for uncovered short selling has been in place in Germany that applies to stocks and debt securities of European governments and to uncovered CDS on government bonds issued in the euro zone. As a matter of principle, products traded at Eurex are only subject to German law.

However, it is possible that trades conducted at Eurex are affected by rulings of foreign regulators. We therefore recommend that each Trading Member reviews and assesses the released short selling bans independent of the German legal situation. Currently there is a high level of uncertainty regarding the short selling ban’s specific scope of application.

The Management Boards of the Eurex Exchanges are thoroughly examining the precise application of the short selling bans and are discussing these with the respective regulators. In the meanwhile, we refer to the trades exempted from short selling bans in the national regulators’ publications. As an example, please refer to the following question and answer list published by the French regulator:
http://www.amf-france.org/documents/general/10111_1.pdf

Market Status

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Please find further information about incident handling in the Emergency Playbook published on the Eurex webpage under Support --> Emergencies and safeguards. Detailed information about incident communication, market re-opening procedures and best practices for order and trade reconciliation can be found in the chapters 4.2, 4.3 and 4.5, respectively. Concrete information for the respective incident will be published during the incident via newsboard message. 

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