BELGIUM: Financial regulator prohibits Belgium short selling

Friday August 12 2011

The Financial Services and Markets Authority (FSMA) has announced that it has modified rules governing Belgium short selling of financial shares. Royal Decree of 23 September 2008, which introduced a prohibition on uncovered transactions (“naked shorting”) and an obligation to publish, among other places on the FSMA`s website, any net economic short position in excess of 0.25% of the share capital of a financial institution to which these measures apply (Ageas, Dexia, KBC Group and KBC Ancora), has been amended as from 12 August 2011 to extend the notion of “uncovered transactions” so that coverage with borrowed shares can no longer be considered full coverage. As a result, “covered shorting” is now also prohibited.

Therefore, from 12 August onward, it is prohibited to take a net economic short position by any means whatsoever, or to extend such a position in the shares of a financial institution referenced above.

Existing net economic short positions do not fall within the scope of this ban, but they may not be increased. The existing disclosure obligations remain in force.

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