The EU Short Selling regulation
Produced in partnership with Orrick, Herrington & Sutcliffe (Europe) LLP
The EU Short Selling regulation

The following Financial Services guidance note Produced in partnership with Orrick, Herrington & Sutcliffe (Europe) LLP provides comprehensive and up to date legal information covering:

  • The EU Short Selling regulation
  • Background
  • Purpose of the Short Selling Regulation
  • Key provisions of the Short Selling Regulation
  • Exemptions to the Short Selling Regulation—Chapter IV (Articles 16 and 17)
  • Emergency powers for national regulators and ESMA—Chapter V (Articles 18–31)
  • EU Commission’s delegated acts
  • Summary of supplementary provisions
  • UK reaction to the Short Selling Regulation
  • Current status and implementation
  • more

This is part one of three linked Practice Notes; it is advisable to read all three Practice Notes to get a rounded picture of the short selling regime.


Following the collapse of Lehman Brothers on 15 September 2008, global financial markets went through a volatile few weeks in which governments in countries throughout the world intervened in their financial markets to implement various emergency measures aimed at stemming turbulent market conditions. One example was prohibiting short selling in financial markets in certain circumstances.

The former Committee of European Securities Regulators (CESR) (now the European Securities and Markets Authority (ESMA)) decided at a plenary meeting on 30 September 2008 to set up a dedicated task force to review the different EU Member States’ measures on short selling with a view to formulating pan-European standards.

In March 2010, CESR published its report to the EU institutions proposing a Pan-European Short Selling Disclosure Regime.

Regulation (EU) No. 236/2012 on short selling and certain aspects of credit default swaps came into force on 25 March 2012 (the Short Selling Regulation). The Short Selling Regulation sets out a harmonised framework with regard to the requirements and powers relating to short selling and credit default swaps (CDS) and ensures greater consistency between Member States in relation to their approach to formulating rules in relation to