Bloomberg News

Italy Has No Plans to Extend Short-Sale Ban, Regulator Says

February 24, 2012

(Adds plans for small-company listings, changes in rules from fifth paragraph.)

Feb. 23 (Bloomberg) -- Italy won’t extend its ban on short selling of financial shares after it expires tomorrow, said Giuseppe Vegas, chairman of Italian market regulator Consob.

“We will let it expire quietly,” Vegas said at a meeting with reporters at the London Stock Exchange today. “We have no plans to extend it.” LSE owns Milan-based Borsa Italiana, operator of the Italian stock exchange.

France, Belgium, Spain and Italy moved to prohibit short selling of financial shares in August in an effort to stabilize markets after European banks including Societe Generale SA hit their lowest levels since the credit crisis of 2008. France, Belgium and Spain ended their bans last week.

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 trade is known as “naked” when sellers haven’t first taken steps to ensure that they can borrow the securities.

Italy is also changing the rules to allow smaller companies to opt out of some regulatory disclosures, seeking to encourage family-owned firms to list, Vegas said today. The rule changes will be ready by Easter. Consob is starting a public consultation on the changes, which include raising the threshold for shareholding disclosure to 5 percent from 2 percent, he said.

“It’s a cultural problem,” Vegas said. “Many entrepreneurs look at stock market regulation like it’s very heavy. The question is why London is functioning but Milan is not,” he added.

Vegas said he was in London meeting investors, studying LSE’s Alternative Investment Market for smaller companies and trying to see if the model can be replicated in Italy. A new segment on Borsa Italiana is a possibility, he said.

--Editor: Andrew Rummer

To contact the reporter on this story: Nandini Sukumar in London at nsukumar@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net


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