Short Selling

Introduction

Regulation (EU) No 236/2012 of the European Parliament and of the Council of 14 March 2012 on short selling and certain aspects of credit default swaps (Short selling regulations) was issued on 14 March 2012, and applies in Republic of Croatia as of 1 July 2013.

The obligation to notify net short positions applies to all investors and market participants. A net short position in relation to the issued share capital of a company that has shares admitted to trading on a trading venue must be disclosed where the position reaches, exceeds or falls below the threshold of 0.2% of the company’s issued share capital. A new notification must be submitted for each 0.1% above the threshold.

The Croatian Financial Services Supervisory Agency will publish any notified net short position that reaches, exceeds or falls below the threshold of 0.5% of the relevant company’s issued share capital on its website. Public disclosure of significant net short positions in shares pursuant to Article 6 of the Short selling regulations can be found here.

A net short position relating to issued sovereign debt must also be notified to the Croatian Financial Services Supervisory Agency, where such a position reaches, exceeds or falls below the notification threshold. Concerning debt issued by the Croatian government, net short position notification thresholds can be found here. Short positions in sovereign debt will not be published.

Any queries in relation to the Short selling regulations should be addressed to: shortselling@hanfa.hr.

Notification

The position holder – legal person, prior to submission of its first notification, should submit a signed, scanned copy of the company registration certificate and contact information of reporting person (when different from the position holder) by email to shortselling@hanfa.hr. The position holder - natural person, prior to submission of its first notification, should submit a scanned copy of identification card or passport (first page) and contact information including contact information of reporting person (when different from the position holder) by email to shortselling@hanfa.hr.

Original documentation or certified copy of original documentation should follow by post to: Croatian Financial Services Supervisory Agency, Miramarska 24b, 10000 Zagreb, Republic of Croatia.

Notifications submitted to the Croatian Financial Services Supervisory Agency without a prior submitting requested documentation and information mentioned above will be rejected. Where a notification has been rejected, it is the responsibility of the position holder to resubmit the notification with all requested documentation and information in order to ensure compliance with its obligations under the Short Selling Regulations.

Notifications to the Croatian Financial Services Supervisory Agency in accordance with Articles 5, 7 and 8 of the Short Selling Regulations should be made using the appropriate forms:

  1. Notification - significant net short position in shares
  2. Notification - significant net short position in sovereign debt
  3. Notification - uncovered position in sovereign credit default swaps

The relevant time for calculation of the net short position is midnight at the end of the trading day on which the natural or legal person holds the relevant position. Short positions must be notified to the Croatian Financial Services Supervisory Agency not later than at 15.30 on the following trading day after the transaction day.

The Croatian Financial Services Supervisory Agency will publish notified short positions exceeding the threshold during the following trading day.

Where a notification form is rejected it is the responsibility of the position holder to submit an amended notification form to the Croatian Financial Services Supervisory Agency to ensure compliance with its obligations under the Short Selling Regulations.

Where a previously submitted notification form contains an error, a cancellation form should be submitted as soon as possible to the Croatian Financial Services Supervisory Agency to cancel the erroneous submission. Here you can find cancellation forms:

  1. Notification - cancelled significant net short position in shares
  2. Notification - cancelled significant net short position in sovereign debt
  3. Notification - cancelled uncovered position in sovereign credit default swaps

Notifications and cancellations of erroneous notifications are made by sending the notification forms to shortselling@hanfa.hr.

Notification forms should be sent to Croatian Financial Services Supervisory Agency in Excel and PDF format. Signed notification forms should follow by post to: Croatian Financial Services Supervisory Agency, Miramarska 24b, 10 000 Zagreb, Republic of Croatia.

Exemptions for market makers and primary dealers

Article 17 of the Short Selling Regulation stipulates an exemption for market makers and primary dealers from the restrictions applying to naked short selling and the transparency requirements regarding net short positions. The Croatian Financial Services Supervisory Agency complies with the Guidelines Exemption for market making activities and primary market operations under Regulation (EU) 236/2012 of the European Parliament and the Council on short selling and certain aspects of Credit Default Swaps. Anyone intending to make use of this exemption must submit a written notification to the Croatian Financial Services Supervisory Agency not less than 30 calendar days before they first intend to use the exemption.

Notifications are made by sending the notification forms to shortselling@hanfa.hr and by post to: Hanfa, Miramarska 24b, 10 000 Zagreb, Republic of Croatia.

Notification form:

  1. Notification form-market making
  2. Notification form-primary market operations