ESMA_QA_1909

Status: ✅ Answer Published

Link to ESMA Q&A tool: https://www.esma.europa.eu/publications-data/questions-answers/1909

---

Regulatory Context

Regulation : SSR

Level 1 Regulation: Short Selling Regulation (SSR) Regulation (EU) No 236/2012

Level 2 Regulation: No information available

Level 3 Regulation: No information available

Topic: Determination of net short position

Subject Matter: Share dividend distribution and lending agreements

---

Question

Submission Date: 13 September 2012

Should dividends in the form of shares that must be returned by a borrower to the lender (as a result of a lending agreement) be taken into account to calculate short positions?

---

ESMA Answer

Answer Date: 13-09-2012

[ESMA70-145-408 SSR Q&A, Q&A 6.4] No. Those shares which the lender is entitled to receive under the terms of a stock lending agreement as a result of a share dividend distribution and that must be reimbursed by the borrower shall not be included by the latter in calculating their net short position. The mere conclusion of a lending agreement does not confer in itself any financial advantage in the event of a decrease in price of the share borrowed.

---

This document was automatically extracted from the ESMA EMIR Q&A database.