ESMA_QA_1946
Status: ✅ Answer Published
Link to ESMA Q&A tool: https://www.esma.europa.eu/publications-data/questions-answers/1946
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: Uncovered short sales
Subject Matter: Sovereign debt - Market operators considered as third parties with whom arrangements can be made
Question
Submission Date: 13 September 2012
A market operator who manages a regulated market for sovereign debt can be considered a third party in accordance with Article 8(1)(f) of ITS?
ESMA Answer
Answer Date: 13-09-2012
[ESMA70-145-408 SSR Q&A, Q&A 10.9] Yes, a market operator can be considered a third party according to Article 8(1)(f) of ITS if:
it “is subject to the authorization or registration requirements in accordance with Union law” (Article 8(1)(f)); it “participates in the management of borrowing or purchasing of […] the sovereign debt” (Article 8(2)(a)), for example by managing a repo platform (for borrowing the debt) or a cash platform (for purchasing the sovereign securities); it is able to “provide evidence of such participation” and, “on request, to provide evidence of its ability to deliver or process the delivery of […] sovereign debt on the dates it commits to do so to its counterparties including statistical evidence” (Article 8(2)(b)-(c)) (e.g. with official statistics of market activity)
Such a third party can provide an “Easy to purchase sovereign debt confirmation” according to Article 7(5) of the ITS (pursuant Article 13(1)(c) of the Regulation), confirming that the sovereign debt is liquid on the platform so that there is a reasonable expectation that the securities can be borrowed or purchased in due time to ensure the settlement of the short sale.
This document was automatically extracted from the ESMA EMIR Q&A database.