On 21st February 2012, the Council of the European Union adopted a Regulation on short selling and certain aspects of credit default swaps. The adoption of this Regulation follows the agreement reached with the European Parliament in first reading on 18th October 2011 and subsequent approval by the Permanent Representatives Committee on 10th November 2011. This Regulation should be applicable as from 1st November 2012.

This regulation provide a common regulatory framework with regards to the requirements and powers relating to short selling and credit default swaps thus ensuring greater coordination and consistency between Member States. This harmonised set of rules aims at warranting the proper functioning of the internal market and improving the conditions of its functioning, in particular with regard to the financial markets as well as ensuring a high level of consumer and investor protection. The Regulation is available for download from the following link: [http://register.consilium.europa.eu/pdf/en/11/pe00/pe00068.en11.pdf ]

The Commission has also requested ESMA to develop technical standards concerning this Regulation and ESMA’s advice should be submitted to the Commission by 31st March 2012. In this regard, on 24th January 2012 ESMA issued a consultation paper entitled “Draft technical standards on the Regulation (EU) xx/2012 of the European Parliament and of the Council on short selling and certain aspects of credit default swaps”[ http://www.esma.europa.eu/system/files/2012- 30_0.pdf]. The consultation period ran till 13th February 2012. Subsequently on 13th February 2012, ESMA issued a second consultation paper entitled “ESMA's draft technical advice on possible Delegated Acts concerning the regulation on short selling and certain aspects of credit default swaps ((EC) No XX/2012) [http://www.esma.europa.eu/system/files/2012-98.pdf ]. This second consultation runs till 9th March 2012.