Activities of Thomas HÄNDEL related to 2010/0251(COD)
Plenary speeches (1)
Short selling and certain aspects of credit default swaps (debate)
Amendments (32)
Amendment 144 #
Proposal for a regulation
Recital 4
Recital 4
(4) To set an end to the current fragmented situation in which some Member States have taken divergent measures and to restrict the possibility of divergent measures being taken by competent authorities it is important to address the potential risks arising from short selling and credit default swaps in a harmonised mannercoordinated manner. In that connection, it should still be possible for Member States to adopt stricter rules. The requirements to be imposed should address the identified risks without unduly detracting from the benefits that short selling provides to the quality and efficiency of markets, taking specific account of the problems that short selling causes in terms of market quality and efficiency. In particular, uncovered short selling and short selling in connection with commodities should be prohibited.
Amendment 186 #
Proposal for a regulation
Recital 16
Recital 16
(16) Uncovered short selling of shares and sovereign debt is sometimes viewed as increasing the potential risk of settlement failure and volatility. To reduce such risks it is appropriate to place proportionate restrictions on uncovered short selling. The detailed restrictions should take into account the different arrangements currently used for covered short selling. Uncovered short selling and, in general, short selling in connection with commodities should be prohibited, since transactions of this kind offer no benefits for the economy as a whole and create systemic risks which cannot be assessed or identified in advance and for which, should the short seller default, in future a central counterparty, but ultimately the taxpayer once again, will be liable. If risk hedging in connection with commodities is necessary, it can be carried out using other instruments, such as futures and options. It is also appropriate to include requirements on trading venues relating to buy-in procedures and fines for failed settlement of transactions in those instruments. The buy-in procedures and late settlement requirements should set basic standards relating to settlement discipline.
Amendment 196 #
Proposal for a regulation
Recital 19
Recital 19
(19) Market making activities play a crucial role in providing liquidity to the markets within the Union and. The role of market makers nis to guaranteed to take short positions to perform that role. Imposing requirements on such activities could severely inhibit their ability to provide liquidity and have a significant adverse impact on the efficiency of the Union markets. Furhe tradeability (market liquidity) of securities by continually fixing bid and ask prices. In a functioning market, a sale is possible only on the basis of the terms set by the market maker. In general, stock exchange rules require market makers only to indicate the minimum volume of shares or bonds to be bought. In addition, pre-determined maximum spreads must not be exceeded, although no fair, mathematically calculable value need be indicated. Instead the market maker can himself determine the pricing criteria. If ther market makers would not be expected to take significant short positions except for very brief periods. It is therefore appropriate to exempt natural or legal persons involved in such activities from requirements which may impair their ability to perform such a function and therefore adversely affect the Union market ceases his activities and does not take the shares back, the second market then also becomes illiquid, or, if the transaction is being effected via a central counterparty, a requirement arises for the latter to intervene. It is therefore appropriate that this Regulation should apply to natural or legal persons involved in such market making activities. In order to capture equivalent third country entities a procedure is necessary to assess the equivalence of the third country markets. The exemption should apply to the different types of market making activity but not to exempt proprietary trading. It is also appropriate to exempt certain primary market operations such as those relating to sovereign debt and stabilisation schemes as they are important activities that assist the efficient functioning of markets. Competent authorities should be notified of the use of exemptions and should have the power to prohibit a natural or legal person from using an exemption if they do not fulfil the relevant criteria in the exemption. Competent authorities should also be able to request information from the natural or legal person to monitor their use of the exemption.
Amendment 201 #
Proposal for a regulation
Recital 22
Recital 22
(22) In the case of a significant fall in the price of a financial instrument on a trading venue a competent authority should also have the ability to temporarily restrict short selling of the financial instrument on that venue in order to be able to rapidly intervene rapidly where appropriate and for a 24 hour period to prevent a disorderly price fall of the instrument concerned for a period commensurate with the seriousness of the disruption of the financial market.
Amendment 208 #
Proposal for a regulation
Recital 37
Recital 37
(37) Since some Member States have already put in place restrictions on short selling and since delegated acts and binding technical standards are provided for which should be adopted before the framework to be introduced can be us, the regulation covering the Union as a whole should come into force as soon as possible. This is necessary in the light of the persistently high degree of market instability and the problems in connection with sovereign credit defaully applied, it is necessary to provide for a sufficient period of timt swaps, so that the stability which the regulation is intended to bring about is a pressing need for the Union as a whole.
Amendment 210 #
Proposal for a regulation
Article 1 – point 3
Article 1 – point 3
(3) debt instruments issued by a Member State or, the Union itself or a systemically relevant institution domiciled or established in the Union and derivatives set out in Annex I Section C points (4) to (10) of Directive 2004/39/EC that relate to such debt instruments issued by a Member State or the Union or to an obligation of a Member State or the Union.
Amendment 221 #
Proposal for a regulation
Article 2 – paragraph 1 – point p
Article 2 – paragraph 1 – point p
p) "short sale" in relation to a share or debt means any sale of the share or debt which the seller does not own at the time of entering into the agreement to sell including such a sale where at the time of entering into the agreement to sell the seller has borrowed or agreed to borrow the share or debt for delivery at settlementthe share or debt. Uncovered short sales shall be prohibited;
Amendment 228 #
Proposal for a regulation
Article 3 – paragraph 1 – introductory part
Article 3 – paragraph 1 – introductory part
1. For the purposes of this Regulation, a position resulting from either of the following shall be considered a short position relating to the issued share capital of a company or the issued sovereign debt of a Member State or the Union:
Amendment 231 #
Proposal for a regulation
Article 3 – paragraph 1 – point a
Article 3 – paragraph 1 – point a
a) a short sale of a share issued by the company or a debt instrument issued by the Member State or Union or a systemically relevant institution;
Amendment 238 #
Proposal for a regulation
Article 3 – paragraph 2 – introductory part
Article 3 – paragraph 2 – introductory part
2. For the purposes of this Regulation, a position resulting from either of the following shall be considered a long position relating to the issued share capital of a company or issued sovereign debt of a Member State or the Union:
Amendment 240 #
Proposal for a regulation
Article 3 – paragraph 2 – point a
Article 3 – paragraph 2 – point a
a) holdinga short sale of a share issued by the company or a debt instrument issued by the Member State or Union or a systemically relevant institution;
Amendment 244 #
Proposal for a regulation
Article 3 – paragraph 5
Article 3 – paragraph 5
5. For the purposes of this Regulation, the position remaining after deducting any long position that a natural or legal person holds in relation to the issued sovereign debt of a Member State or the Uniondebt from any short position that that natural or legal person holds in relation to the same debt shall be considered a net short position in relation to the issued sovereign debt of a Member State or the Uniondebt.
Amendment 246 #
Proposal for a regulation
Article 3 – paragraph 6
Article 3 – paragraph 6
6. The calculation under paragraphs 1 to 5 for sovereign debt shall be for each single Member State or for, for the Union or for a systemically relevant institution domiciled or established in the Union even if separate entities within the Member State or the Union issue sovereign debt on behalf of the Member State or Union.
Amendment 257 #
Proposal for a regulation
Article 4 – paragraph 1
Article 4 – paragraph 1
1. For the purposes of this Regulation, a natural or legal person shall be considered to have an uncovered position in a credit default swap relating to an obligation of a Member State or, the Union or a systemically relevant institution domiciled or established in the Union, to the extent that the credit default swap is not serving to hedge against the risk of default of the issuer where the natural or legal person has a long position in the sovereign debt of that issuer or any long position in the debt of an issuer for which the price of its debt has a high correlation with the price of the obligation of a Member State or the Union. The party under a credit default swap that is obliged to make the payment or pay the compensation in the event of a default or a credit event relating to the reference entity does not by reason of that obligation have an uncovered position for the purposes of this paragraph.
Amendment 300 #
Proposal for a regulation
Article 8 – paragraph 1 – point a
Article 8 – paragraph 1 – point a
a) a net short position relating to the issued sovereign debt of a Member State or of, of the Union or of a systemically relevant institution domiciled or established in the Union;
Amendment 303 #
Proposal for a regulation
Article 8 – paragraph 1 – point b
Article 8 – paragraph 1 – point b
b) an uncovered position in a credit default swap relating to an obligation of a Member State or, the Union or a systemically relevant institution resident or established in the Union.
Amendment 333 #
Proposal for a regulation
Article 12 – paragraph 1 – introductory part
Article 12 – paragraph 1 – introductory part
1. A natural or legal person may only enter into a short sale of a share admitted to trading on a trading venue or a short sale of a sovereign debt instrument where one of the following conditions is fulfilled:
Amendment 340 #
Proposal for a regulation
Article 12 – paragraph 1 – point a
Article 12 – paragraph 1 – point a
a) the natural or legal person has borrowed the share or sovereign debt instrument;
Amendment 347 #
Proposal for a regulation
Article 12 – paragraph 1 – point b
Article 12 – paragraph 1 – point b
b) the natural or legal person has entered into an agreement to borrow the share or sovereign debt instrument;
Amendment 350 #
Proposal for a regulation
Article 12 – paragraph 1 – point c
Article 12 – paragraph 1 – point c
c) the natural or legal person has an arrangement with a third party under which that third party has confirmed that the share or sovereign debt instrument has been located and reserved for lending for the natural or legal person so that settlement can be effected when it is duetransaction does not constitute uncovered short selling.
Amendment 367 #
Proposal for a regulation
Article 12 – paragraph 2 a (new)
Article 12 – paragraph 2 a (new)
2a. Short selling of shares or bonds connected with commodities and credit default swaps shall be prohibited.
Amendment 369 #
Proposal for a regulation
Article 12 – paragraph 2 b (new)
Article 12 – paragraph 2 b (new)
2b. A share or debt instrument may be short sold only if the short sale is effected at the bid rate immediately after a fixing at which the share price has risen or remained unchanged.
Amendment 404 #
Proposal for a regulation
Article 14
Article 14
Amendment 410 #
Proposal for a regulation
Article 15 – paragraph 1 – introductory part
Article 15 – paragraph 1 – introductory part
1. Articles 5, 6, 7, 8 and 12 shall notalso apply to the activities of an investment firm or a third country entity or a local firm that is a member of a trading venue or of a market in a third country, whose legal and supervisory framework has been declared equivalent pursuant to paragraph 2, when it deals as principal in a financial instrument, whether traded on or outside a trading venue, in either or both of the following capacities:
Amendment 431 #
Proposal for a regulation
Article 15 – paragraph 3
Article 15 – paragraph 3
3. Articles 8 and 12 shall notalso apply to the activities of a natural or legal person when, acting as an authorised primary dealer pursuant to an agreement with an issuer of sovereign debt, it is dealing as principal in a financial instrument in relation to primary or secondary market operations relating to the sovereign debt.
Amendment 435 #
Proposal for a regulation
Article 15 – paragraph 4
Article 15 – paragraph 4
4. Articles 5, 6, 76 and 127 shall not apply to a natural or legal person when it enters into a short sale of a security or has a net short position in relation to the carrying out of a stabilisation under Chapter III of Commission Regulation (EC) No 2273/2003.
Amendment 437 #
Proposal for a regulation
Article 15 – paragraph 5
Article 15 – paragraph 5
5. The exemptions referred to in paragraphs 1 and 3 shall only apply where the natural or legal person concerned has first notified the competent authority of its home Member State, in writing that they intend to make use of the exemption. The notification shall be made not less than thirty calendar days before the natural or legal person intends to use the exemption.
Amendment 440 #
Proposal for a regulation
Article 15 – paragraph 9
Article 15 – paragraph 9
9. The competent authority of the home Member State may request information, in writing, from a natural or legal person operating under the exemptions set out inprovisions of paragraph 1, 3 or 4 about short positions held or activities conducted under the exemption. The natural or legal person shall provide the information not later than four calendar days after the request is made at the latest.
Amendment 462 #
Proposal for a regulation
Article 18 – paragraph 1
Article 18 – paragraph 1
Amendment 474 #
Proposal for a regulation
Article 19 – paragraph 2
Article 19 – paragraph 2
2. The measure shall apply only for a period not exceeding the end of the trading day following the trading day on whiccommensurate with the fall in price occurs.
Amendment 487 #
Proposal for a regulation
Article 20 – paragraph 2
Article 20 – paragraph 2
Any such measure may be renewed for a further periods not exceeding three months at a time commensurate with the seriousness of the market disruption.
Amendment 494 #
Proposal for a regulation
Article 24 – paragraph 1 – subparagraph 1 – point c
Article 24 – paragraph 1 – subparagraph 1 – point c
c) limit natural or legal persons from entering into credit default swap transactions relating to an obligation of a Member State or, the Union or a systemically relevant institution domiciled or established in the Union or limit the value of uncovered credit default swap positions that a natural or legal person may enter into relating to an obligation of a Member State or, the Union or a systemically relevant institution domiciled or established in the Union;