Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EU) No 236/2012 of 14 March 2012 of the European Parliament and of the Council on short selling and certain aspect of credit default swaps and in particular Articles 9(6), 11(4), 12(2), 13(5) and 16(4) thereof,

After consulting the European Data Protection Supervisor,

1. (1)

   For the purposes of this Regulation the following definition applies:

2. (a)

   ‘IP completion day’ has the meaning given in section 39 of the European Union (Withdrawal Agreement) Act 2020.

This Regulation lays down implementing technical standards specifying the following:

1. (a)

   the means by which information on net short positions may be disclosed to the public by natural or legal persons pursuant to Article 9(6) of Regulation (EU) No 236/2012;

2. (b)

   the types of agreements, arrangements and measures that adequately ensure that the shares are available for settlement and the types of agreements or arrangements that adequately ensure that the sovereign debt is available for settlement pursuant to Article 12(2) and 13(5) of Regulation (EU) No 236/2012;

3. (c)

   the date and period for principal trading venue calculations, and the effectiveness of the relevant list pursuant to 16(4) of Regulation (EU) No 236/2012.

Information on net short positions in shares shall be disclosed to the public by posting it on the central website operated or supervised by the FCA pursuant to Article 9(4) of Regulation (EU) No 236/2012. The information shall be disclosed to the public through means which:

1. (a)

   publish it in the format specified in Annex I in such a way as to allow the public consulting the website to access one or more tables offering all the relevant information on positions per share issuer;

2. (b)

   allow users to identify and filter on whether the net short positions in a share issuer at the time of accessing the website has reached or exceeded the relevant publication threshold;

3. (c)

   provide for historical data on the published net short positions in a share issuer;

4. (d)

   include, whenever technically possible, downloadable files with the published and historical net short positions in a machine-readable format, meaning that the files are sufficiently structured for software applications to identify reliably individual statements of fact and their internal structure;

5. (e)

   show for one day, together with the information specified in point (b), the net short positions that are published because they have fallen below the publication threshold of 0,5 % of the issued share capital, before removing and transferring the information to a historical data section.

1. (1)

   An agreement to borrow or other enforceable claim referred to in Article 12(1)(b) and Article 13(1)(b) of Regulation (EU) No 236/2012 shall be made by means of the following types of agreement, contract or claim which are legally binding for the duration of the short sale:

   1. (a)

      futures and swaps: futures and swap contracts leading to a physical settlement of the relevant shares or sovereign debt and covering at least the number of shares or amount of sovereign debt proposed to be sold short by the natural or legal person, entered into prior to or at the same time as the short sale and specifying a delivery or expiration date that ensures settlement of the short sale can be effected when due;

   2. (b)

      options: options contracts leading to a physical settlement of the relevant shares or sovereign debt and covering at least the number of shares or amount of sovereign debt proposed to be sold short by the natural or legal person, entered into prior to or at the same time as the short sale and specifying an expiration date that ensures settlement of the short sale can be effected when due;

   3. (c)

      repurchase agreements: repurchase agreements covering at least the number of shares or amount of sovereign debt proposed to be sold short by the natural or legal person, entered into prior to or at the same time as the short sale and specifying a repurchase date that ensures settlement of the short sale can be effected when due;

   4. (d)

      standing agreements or rolling facilities: an agreement or facility which is entered into prior to or at the same time as the short sale, of a predefined amount of specifically identified shares or sovereign debt, which for the duration of the short sale, covers at least the number of shares or amount of sovereign debt proposed to be sold short by the natural or legal person and specifies a delivery or execution date that ensures settlement of the short sale can be effected when due;

   5. (e)

      agreements relating to subscription rights: agreements relating to subscription rights where the natural or legal person is in possession of rights to subscribe for new shares of the same issuer and of the same class and covering at least the number of shares proposed to be sold short provided that the natural or legal person is entitled to receive the shares on or before settlement of the short sale;

   6. (f)

      other claims or agreements leading to delivery of the shares or sovereign debt: agreements or claims which cover at least the number of shares or amount of sovereign debt proposed to be sold short by the natural or legal person, entered into prior to or at the same time as the short sale, and specifying a delivery or an execution date that ensures settlement can be effected when due.

2. (2)

   The agreement, contract or claim shall be provided in a durable medium by the counterparty to the natural or legal person as evidence of the existence of the agreement to borrow or other enforceable claim.

1. (1)

   Paragraphs 2, 3 and 4 shall determine the arrangements and measures to be taken in relation to short sales of a share admitted to trading on a trading venue pursuant to Article 12(1)(c) of Regulation (EU) No 236/2012.

2. (2)

   Standard locate arrangements and measures shall mean arrangements, confirmations and measures that include each of the following elements:

   1. (a)

      for locate confirmations: a confirmation provided by the third party, prior to the short sale being entered into by a natural or legal person, that it considers that it can make the shares available for settlement in due time taking into account the amount of the possible sale and market conditions and which indicates the period for which the share is located;

   2. (b)

      for put on hold confirmations: a confirmation by the third party, provided prior to the short sale being entered into, that it has at least put on hold the requested number of shares for that person.

3. (3)

   Standard same day locate arrangements and measures shall mean arrangements, confirmations and measures that include each of the following elements:

   1. (a)

      for requests for confirmation: a request for confirmation from the natural or legal person to the third party which states that the short sale will be covered by purchases during the day on which the short sale takes place;

   2. (b)

      for locate confirmations: a confirmation provided by the third party prior to the short sale being entered into that it considers that it can make the shares available for settlement in due time taking into account the amount of the possible sale and market conditions, and which indicates the period for which the shares are located;

   3. (c)

      for easy to borrow or purchase confirmations: a confirmation by the third party, provided prior to the short sale being entered into, that the share is easy to borrow or purchase in the relevant quantity taking into account the market conditions and other information available to that third party on the supply of the shares or, in the absence of this confirmation by the third party, that it has at least put on hold the requested number of shares for the natural or legal person;

   4. (d)

      for monitoring: an undertaking by the natural or legal person to monitor the amount of the short sale not covered by purchases;

   5. (e)

      for instructions in the event of failure to cover: an undertaking from the natural or legal person that in the event that executed short sales are not covered by purchases in the same day, the natural or legal person will promptly send an instruction to the third party to procure the shares to cover the short sale to ensure settlement in due time.

4. (4)

   Easy to borrow or purchase arrangements and measures shall mean arrangements, confirmations and measures when the natural or legal person enters into a short sale of shares that meet the liquidity requirements established in Article 1 of Commission Delegated Regulation (EU) 2017/567 of 18 May 2016 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council with regard to definitions, transparency, portfolio compression and supervisory measures on product intervention and positions, or other shares that are included in the main national equity index as identified by the FCA and are the underlying financial instrument for a derivative contract admitted to trading on a trading venue, that include the following elements:

   1. (a)

      for locate confirmations: a confirmation provided by the third party prior to the short sale being entered into that it considers that it can make the shares available for settlement in due time taking into account the amount of the possible sale and market conditions and indicating the period for which the share is located;

   2. (b)

      for easy to borrow or purchase confirmations: a confirmation by the third party, provided prior to the short sale being entered into, that the share is easy to borrow or purchase in the relevant quantity taking into account the market conditions and other information available to that third party on the supply of the shares, or in the absence of this confirmation by the third party, that it has at least put on hold the requested number of shares for the natural or legal person; and

   3. (c)

      for instructions to cover: when executed short sales will not be covered by purchases or borrowing, a undertaking that a prompt instruction will be sent by the natural or legal person instructing the third party to procure the shares to cover the short sale to ensure settlement in due time.

5. (5)

   The arrangements, confirmations and instructions referred to in paragraphs 2, 3 and 4 shall be provided in a durable medium by the third party to the natural or legal person as evidence of the existence of the arrangements, confirmations and instructions.

1. (1)

   Paragraphs 2 to 5 shall determine the arrangements with third parties to be taken in relation to sovereign debt pursuant to Article 13(1)(c) of Regulation (EU) No 236/2012.

2. (2)

   Standard sovereign debt locate arrangement shall mean a confirmation from the third party, prior to the short sale being entered into, that it considers that it can make the sovereign debt available for settlement in due time, in the amount requested by the natural or legal person, taking into account market conditions and indicating the period for which the sovereign debt is located.

3. (3)

   Time limited confirmation arrangement shall mean an arrangement where the natural or legal person states to the third party that the short sale will be covered by purchases during the same day of the short sale and the third party confirms, prior to the short sale being entered into, that it has a reasonable expectation that the sovereign debt can be purchased in the relevant quantity taking into account the market conditions and other information available to that third party on the supply of the sovereign debt instruments on the day of entering into the short sale.

4. (4)

   Unconditional repo confirmation shall mean a confirmation where the third party confirms, prior to the short sale being entered into, that it has a reasonable expectation that settlement can be effected when due as a result of its participation in a structural based arrangement, organised or operated by a central bank, a debt management office or a securities settlement system that provides unconditional access to the sovereign debt in question for a size consistent with the size of the short sale.

5. (5)

   Easy to purchase sovereign debt confirmation shall mean a confirmation by the third party, provided prior to the short sale being entered into, that it has a reasonable expectation that settlement can be effected when due on the basis that the sovereign debt in question is easy to borrow or purchase in the relevant quantity taking into account the market conditions and any other information available to that third party on the supply of the sovereign debt.

6. (6)

   The arrangements, confirmations and instructions referred to in paragraphs 2 to 5 shall be provided in a durable medium by the third party to the natural or legal person as evidence of the existence of the arrangements, confirmations and instructions.

1. (1)

   Where an arrangement referred to in Articles 6 and 7 is made with a third party, the third party shall be one of the following types:

   1. (a)

      in the case of an investment firm: an investment firm which meets the requirements set out in paragraph 2;

   2. (b)

      in the case of a central counterparty: a central counterparty which clears the relevant shares or sovereign debt;

   3. (c)

      in the case of a securities settlement system: a securities settlement system as defined under the Financial Markets and Insolvency (Settlement Finality) Regulations 1999 which settles payments in respect of the relevant shares or sovereign debt;

   4. (d)

      in the case of a central bank: a central bank that accepts the relevant shares or sovereign debt as collateral or conducts open market or repo transactions in relation to the relevant shares or sovereign debt;

   5. (e)

      in the case of a national debt management entity: the national debt management entity of the relevant sovereign debt issuer;

   6. (f)

      any other person who is subject to authorisation or registration requirements in accordance with the Financial Services and Markets Act 2000 and meets the requirements set out in paragraph 2;

   7. (g)

      a person established in a third country who is authorised or registered, and is subject to supervision by an authority in that third country and who meets the requirements set out in paragraph 2, provided that the third country authority is a party to an appropriate cooperation arrangement concerning exchange of information with the FCA.

2. (2)

   For the purposes of points (a), (f) and (g) of paragraph 1, the third party shall meet the following requirements:

   1. (a)

      participate in the management of borrowing or purchasing of relevant shares or sovereign debt;

   2. (b)

      provide evidence of such participation;

   3. (c)

      be able, on request, to provide evidence of its ability to deliver or process the delivery of shares or sovereign debt on the dates it commits to do so to its counterparties including statistical evidence.

1. (1)

   The FCA shall make any calculations determining the principal trading venue for a share by IP completion day in respect of the two-year period preceding that date.

2. (2)

   Subsequent calculations shall be made every two years thereafter in respect of the subsequent two year period.

3. (3)

   Where the share concerned was not admitted to trading during the whole two-year period on the trading venue in the UK and the third country trading venue, the period for calculation shall be the period during which the share was admitted to trading on both venues concurrently.

The list of shares for which the principal trading venue is located outside the UK shall be effective as of 1 April following its publication by the FCA, except that the first list published by the FCA shall be effective from IP completion day.

1. (1)

   The FCA, in determining whether the principal trading venue for a share is located outside the UK following one of the circumstances set out in paragraph 2 shall ensure that any calculations determining the principal trading venue are made as soon as possible after the relevant circumstances arise and in respect of the two year period preceding the date of calculation.

2. (2)

   The provisions of paragraph 1 apply when:

   1. (a)

      the shares of a company are removed from trading on a permanent basis on the principal venue located outside the UK;

   2. (b)

      the shares of a company are removed from trading on a permanent basis on a trading venue in the UK;

   3. (c)

      the shares of a company that was previously admitted to trading in a trading venue outside the UK are admitted to trading on a trading venue in the UK.

This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union.

It shall apply from 1 November 2012, except for Articles 9, 10 and 11 which shall apply from the date referred to in the first paragraph.