Client Alert
| May 21, 2010
The German Federal Financial Supervisory Authority (BaFin) Prohibits Naked Short Selling of Certain Financial Instruments
In the context of recent developments in the global financial markets concerning the volatility of debt securities issued by Member States of the EU and the uncertainties of the stock market, the German Federal Financial Authority (BaFin) has issued three general decrees: (i) the prohibition of naked short selling transactions in certain shares, (ii) the prohibition of naked short selling transactions in debt securities issued by Member States of the EU whose legal currency is the Euro and (iii) the prohibition on contracting a credit derivative or entering into a transaction on the same, if such transaction does not result in a not only insignificant reduction of the protection buyer’s risk. All three general decrees have become effective at 19 May 2010, 00:00 CET.
This memorandum is intended only as a general discussion of these issues. It is not considered to be legal advice. We would be pleased to provide additional details or advice about specific situations. For additional information on this important topic, please feel free to call upon your Dewey & LeBoeuf relationship partner. No part of this publication may be reproduced, in whole or in part, in any form, without our prior written consent.
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