Bloomberg News

France, Belgium Lift Short-Selling Ban on Financial Stocks

February 15, 2012

(Updates with Belgian regulator in second paragraph.)

Feb. 13 (Bloomberg) -- France and Belgium ended bans on the short-selling of financial stocks, the countries’ financial markets regulators said today.

The French curbs, barring short sales on companies including France’s biggest banks BNP Paribas SA, Societe Generale SA and Credit Agricole SA, expired Feb. 11 and haven’t been renewed, France’s Autorite des Marches Financiers said in a statement on its website without giving further reasons for the decision.

“The lower volatility of the markets” made the ban no longer necessary, Belgium’s Financial Services and Markets Authority said in its statement.

France, Belgium, Spain and Italy moved to ban short selling in August in an effort to stabilize markets after European banks including Societe Generale hit their lowest levels since the credit crisis of 2008.

The European Securities and Markets Authority, which coordinates markets policy in the region, “has been informed” of the French and Belgian actions, ESMA Spokesman Reemt Seibel said in a telephone interview today.

Both France and Belgium have bans on so-called naked short- selling that remain in force.

April Group, CIC, CNP Assurances SA, Euler Hermes SA, Natixis SA, and Scor SE were also covered by the French ban. The AMF reiterated that it requires disclosure of short positions under rules adopted last February. France also restricted short sales in 2008 after the collapse of Lehman Brothers Holdings Inc.

Short-sellers sell borrowed shares with plans to buy them back later at a lower price, a practice politicians and some investors blame for roiling markets. The practice is known as “naked” when sellers haven’t first taken steps to ensure that they can borrow the securities.

--With assistance from Jim Brunsden in Brussels. Editors: Peter Chapman, Christopher Scinta

To contact the reporter on this story: Heather Smith in Paris at hsmith26@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net


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